You Can Use Your Retirement Account to Invest in Cryptocurrency

Cryptocurrency is just one of many alternative assets you can hold in your Self-Directed IRA (SDIRA).

Digital currencies can be bought and sold on exchanges, similar to traditional currencies, with the same potential for gains and losses. As is the case with any new asset class you might add to your allocation plan, adding cryptocurrency to your portfolio mitigates risk, provides a hedge against inflation, and improves your chances for higher returns.

How to Invest in Cryptocurrency With a SDIRA

If you haven’t invested in cryptocurrency yet, but are intrigued at the prospect of using a Self-Directed IRA to do so, here’s what the process looks like at Entrust:

Method #1: Investing in private digital currency funds

1. Use this link to open a Self-Directed IRA with Entrust (it takes less than 10 minutes).
2. Fund your account via a transfer, rollover, or cash contribution.
3. Submit the subscription/purchase agreement provided by the investment sponsor and a Buy Direction Letter for Private Placement via paper or the Entrust Client Portal.

Method #2: Buying digital currency (direct holdings)

1. Use this link to open a Self-Directed IRA with Entrust.
2. Fund your account via a transfer, rollover, or cash contribution.
3. Set-up an LLC.
4. Submit the operating agreement and a Buy Direction Letter for Private Placement via
5. paper or the Entrust Client Portal (the LLC is considered an asset in your SDIRA).
6. Your LLC is ready to purchase cryptocurrency.

Investing in public or private funds may be attractive to some, but many are prone to substantial fees and restrictions that limit your access and ability to sell. However, it does allow you to bypass some of the hassle of establishing an IRA LLC.

By setting up an IRA LLC with checkbook control, your access and control of the wallet you’ll establish to hold your cryptocurrency keys (the data necessary for your crypto’s transmission) is absolute. You will also be able to avoid the significant transaction fees that some providers charge on exchanges. You control the sale and purchasing process of your exchanges and don’t need to allow third parties (like your administrator) access to your keys. 

Curious to learn more about cryptocurrency and the virtual currency market? Watch our webinar featuring Michael Sonnenshein, Managing Director of Grayscale Investments.

This article came from: https://www.theentrustgroup.com