BitcoinIRA Review 2024: What to Look Out For!

Investing in Bitcoin through a tax-advantaged individual retirement account (IRA) is a smart move to capitalize on Bitcoin’s long-term potential.

BitcoinIRA is a leading self-directed platform that lets you trade more than 60 cryptocurrencies within your retirement account; however, it isn’t a one-size-fits-all solution to your retirement savings.

In this BitcoinIRA review, we’ll explore its features, fees, pros and cons, risks, and other crucial factors to consider and compare it to the Swan’s Bitcoin IRA.

Pros of BitcoinIRA:

• Wide Range of Options: Offers over 60 cryptocurrencies, providing diverse investment choices.

• Versatile Account Types: It supports various IRA types, including traditional, Roth, SEP, and even a Saver IRA, catering to different retirement planning needs.

• High Customer Satisfaction: Solid ratings on Trustpilot and mobile app stores indicate good user satisfaction overall.

Cons of BitcoinIRA:

• High Fees: Charges a 2% trading fee, a 5.99% initial setup fee, and a 0.08% monthly maintenance fee, higher than many competitors.

• Legal Concerns: Faces potential risks from ongoing SEC scrutiny regarding the cryptocurrencies it offers, similar to other platforms.

Fees:

• Initial Setup Fee: 5.99%.

• Trading Fee: 2% on transactions.

• Monthly Fee: 0.08% with a $100 minimum. More on Fees

Customer Insights from Trustpilot:

• Rating: 4.3/5 from 27 reviews Trustpilot

• Feedback: There are generally positive reviews praising the variety of crypto options and user-friendly platform, though some mention high fees as a downside.

Unique Solutions Offered by BitcoinIRA:

• Besides offering traditional crypto IRAs, BitcoinIRA has introduced a Saver IRA for those seeking regular, smaller contributions to their retirement savings with cryptocurrency.

Recent Developments:

• The platform is under the same regulatory scrutiny affecting much of the crypto industry, with recent SEC actions highlighting the risks associated with including certain altcoins in their offerings. SEC Lawsuit Information

What are some of BitcoinIRA’s pros and cons?

Over 170,000 users have joined the platform, making it one of the biggest crypto retirement platforms. BitcoinIRA is for investors who want to invest in more than Bitcoin.

BitcoinIRA is one such type of IRA that promotes and asks investors to diversify their investments into all sorts of risky fly-by-night altcoins.

If you’re a true believer in Bitcoin and its long-term potential, you will be irritated with BitcoinIRA. However, if you have a higher risk tolerance, okay paying much higher fees, and can navigate the complexities of self-managed retirement accounts, BitcoinIRA might be right for you!

Using a Bitcoin-only platform like Swan Bitcoin, as opposed to a broad crypto IRA platform like BitcoinIRA, offers an array of advantages. 

• Simplicity and Focus: Bitcoin-only platforms offer a simplified user experience and focus all their resources on Bitcoin-related services. If you only want to invest in Bitcoin, a streamlined platform without the complexity of managing multiple cryptocurrencies.

• Specialized Expertise: Bitcoin-only platforms like Swan Bitcoin deeply understands Bitcoin’s technology, market dynamics, and trends. These platforms offer more customized advice, research, and support specific to Bitcoin investing.

• Enhanced Security: They also prioritize and optimize security measures explicitly designed for Bitcoin. This may include robust encryption, multi-signature wallets, cold storage solutions, and other security practices to protect Bitcoin holdings.

• Access to Specific Bitcoin Features: You get unique features or services exclusive to Bitcoin. For example, access to Bitcoin lending, staking, or other specialized investment options is unavailable on broader platforms.

• Lower Fees: Bitcoin-only platforms may incur lower fees than broader platforms supporting multiple cryptocurrencies.

While all BitcoinIRA fees are very high compared to other providers, account minimums and the funding fee are both particularly egregious.

BitcoinIRA requires a $3,000 minimum account balance starting fee + charges a 5.99% funding fee and a 2% trading fee (plus a hefty spread). There’s also a 1% custody fee charged annually.

Swan Bitcoin IRA offers lower fees across the board, with no one-time or upfront fees, a 0.99% trading fee, and a 0.25% annual administration fee for balances over $100,000.

Example: If you transfer a $100k IRA balance to BitcoinIRA, you’ll be charged 7.99% on Day 1.

How?

A 5.99% funding fee to transfer USD to their custody. Another 2% trading fee to convert the remaining USD balance into Bitcoin. Worse still, every time you transfer new money to BitcoinIRA and purchase Bitcoin, they clip another 7.99%. Imagine this fee structure applying to your new contributions yearly until you retire.

Consider a 25-year-old. We’ll call them Mike. 

Mike plans to retire at 67 and allocates $100,000 toward Bitcoin in their IRA. He also make additional annual contributions of $6,500 toward Bitcoin. 

Let’s assume a 15% annual appreciation of Bitcoin in USD.

In this scenario, choosing Swan IRA over BitcoinIRA could mean a massive difference of >$900,000 in your Swan IRA vs. your BitcoinIRA ending balance!

• 25-year-old, single

• Planning to retire at 65 (40-year time horizon)

• IRA starting balance of $0

• $6,500 annual contribution

• Projected annual returns (BTC) = 10%

• Projected annual returns (60/40 portfolio) = 7%

• Projected BTC price by the time of retirement (2063) = $1.3M

Despite implementing the same investment strategy — buying and holding Bitcoin and accumulating it in a retirement account over the years.

** The result will be massively different based on Mike’s IRA provider.

• With a 0% (BTC) allocation, Mike expects to have $824k by retirement

• With a 100% (BTC) allocation, Mike expects to have $3.2M by retirement 

• $2.3M more in his retirement account (3.8x more money) should these projections become true

Jack Bogle, the founder of index investing, once said:

“In investing, you get what you don’t pay for.”

This holds for Bitcoin saved in retirement accounts. Your future retiree self will thank you for paying close attention to the costs of having Bitcoin in a retirement account.

NOTE: This analysis was completed using tools from Swan Research, a new department at Swan Bitcoin focused on bringing deep research and analytics to Bitcoin. You can read our previous Swan Research piece explaining Why Bitcoin is the Ultimate Asset For Your IRA. 

If you’d like to explore the model and modify the inputs, you can see the details using Swan Research’s Portfolio Modeling Tool.

The Nakamoto Portfolio is a set of powerful portfolio construction and investment tools to help you explore Bitcoin’s effects on your financial life.

Swan Bitcoin IRA Highlights:

• Simplicity and Focus: Swan Bitcoin IRA champions a straightforward approach, prioritizing best practices and focusing solely on Bitcoin, which they believe aligns with their philosophy of doing what’s right for Bitcoin and its investors.

• Educational Resources: Swan provides high-quality information through various channels like Swan Media on YouTube, Signal Blog, and the “Welcome to Bitcoin: 101 Series”, which are aimed at enhancing investors' understanding of Bitcoin and the crypto industry.

• Compliance and Risk Management: Swan emphasizes minimizing risks associated with Bitcoin investing and custody. This includes handling regulatory or compliance developments proactively to safeguard investors' interests.

• Customer Support: Swan is known for its industry-leading customer support, with a dedicated team that is responsive and knowledgeable about Bitcoin, ready to assist with any queries investors might have. Contact Swan Support.

• Marketing Strategy: Unlike many crypto IRA providers, Swan does not promote multiple digital assets or engage in making price predictions. Their marketing is focused on educating about Bitcoin and discouraging speculative trading with retirement funds. Learn more.

BitcoinIRA Overview:

• Diverse Options: BitcoinIRA offers a broader range of cryptocurrencies, including over 60 altcoins. This might be appealing for those looking to diversify their crypto holdings within their IRA.

• Large Asset Management: Manages over $2 billion in crypto assets, indicating a significant scale of operations and a substantial customer base. Partnership with BitGo.

• Recent Developments: BitcoinIRA recently acquired Shrimpy.io, a tool that allows users to connect their exchanges and wallets to automate and streamline their crypto investing process, indicating a focus on enhancing user experience and investment capabilities.

Compliance and Regulatory Risks:

• Exposure to Altcoins: BitcoinIRA’s inclusion of numerous altcoins in its product offerings carries potential regulatory risks, particularly with the ongoing scrutiny by the SEC, which has taken legal actions against prominent crypto platforms and identified several altcoins as potentially unregistered securities. This exposure could pose risks to investors' assets if regulatory actions intensify. Learn about the SEC case.

• The key is to stop following around in crypto.

• Platform Viability: The regulatory challenges facing platforms that offer a wide range of altcoins may affect their ability to operate smoothly in the future. This includes potential forced liquidations or interruptions in service, impacting investors who have diversified into these altcoins.

• Simplicity: Swan Bitcoin IRA is best-practices driven, guided by an inherent principle: “Do what’s right for Bitcoin and Bitcoiners.” 

• High-Quality Information: Swan Studio’s, the Swan YouTube channel the Signal Blog and the Welcome to Bitcoin: 101 Series provide some of the best insight and content in the industry. 

• Compliant and Risk-Focused: Swan minimizes the potential risks of investing in Bitcoins and keeping them in custody, handling adverse regulatory or compliance developments concerning your IRA. 

Founded in March 2015, BitcoinIRA is owned by entrepreneurs Chris Kline, Johannes Haze, and Camilo Concha.

BitcoinIRA is a well-known trading platform that specializes in various crypto-based IRA services.

The platform offers a self-directed IRA, enabling investors to integrate digital assets into their retirement portfolios. 

Yes, you can open a new account with BitcoinIRA or rollover funds from an existing IRA or retirement account such as 401(k) and allocate those funds toward cryptocurrencies such as Bitcoin, Ethereum, Bitcoin Cash (BCH), or Litecoin. 

Swan Bitcoin IRA, iTrustCapital, Alto Crypto IRA, and Broad Financial.

There’s no maximum investment limit but there is a minimum initial investment of $3,000.

You are exempt from taxation as long as the money and assets stay within your account.

The primary risks include market volatility, regulatory and legal challenges, security and fraud risks, and tax implications. Before investing in BitcoinIRAs, speak to your financial advisor and carefully review the terms and conditions of any financial institution you wish to work with.

Bitcoin isn’t a typical investment. Given its many benefits and lucrative growth, more companies will start offering a BitcoinIRA or crypto IRA product sooner or later.

Before investing in a riskier option like BitcoinIRA, continue conducting additional research to ensure you protect your savings while exposing yourself to a long-term price appreciation in a secure asset like Bitcoin.

Mixing your retirement portfolio with the unregistered securities and altcoins BitcoinIRA platforms is extremely risky. Consider going Bitcoin-only when choosing an IRA provider. Also, understand the fees involved and how the costs will affect your long-term retirement goals.

Learn more about Swan IRA and how it can help you reach your retirement goals while maximizing your savings. Contact the team at ira@swanbitcoin.com for more info.