Bitcoin IRA Fees: Top Things to Watch Out For

IRAs are a big deal when it comes to planning for retirement, with millions of Americans relying on them. In recent years, investing in cryptocurrencies, particularly Bitcoin, has skyrocketed in popularity.

In this article, we uncover all the enigmatic fees of BitcoinIRA, including custodial, management, and account maintenance fees, along with onboarding, funding, transfers, trading, transaction, and security fees.

By the end of the article, you’ll know precisely how BitcoinIRA fees break down. But, if you short on time, you can jump to any section in the 'Overview' list.

Let’s get started!

• Quick Facts About BitcoinIRA

• BitcoinIRA Hidden Fees

• BitcoinIRA Promoting Unknown Cryptocurrencies and Lawsuits

• BitcoinIRA vs. Swan IRA Fees Example

• Let’s Wrap Up

Not all BitcoinIRA providers are created equal, however. BitcoinIRA has received flak for its sneaky fees, concealed in fine print and complex jargon. If you sign up for BitcoinIRA, you may get charged up to 8% for trades and IRA contributions.

BitcoinIRA is a platform that enables individuals to invest in Bitcoin and other cryptocurrencies using their IRAs. 

• Founded in 2016

• Customer Rating on TrustPilot: 2.7 out of 5 stars as of November 17, 2023.

• Headquartered in Sherman Oaks, California

• Assets: $2 billion of assets in custody

What People Like About It:

1. Ability to invest in various alternative cryptocurrencies all from one IRA account

2. Been in business since 2016

What People Dislike About It: 

1. Hidden fees

2. The volatility and risk of various cryptocurrencies promoted

3. Regulatory uncertainty surrounding cryptocurrencies promoted

4. Limited investment options to Bitcoin and cryptocurrencies only vs. traditional IRAs

5. Market adoption and liquidity: Despite the growing popularity of cryptocurrencies, they are still relatively new and not widely accepted as mainstream investments 

In the following section, we will meticulously dissect the fees within the realm of Bitcoin IRA, totaling an astonishing 8%, covering everything from account setup to trades and transactions, equipping you with the knowledge needed for informed decision-making.

BitcoinIRA annually charges a custodial fee of 1.00% for the custody of clients' portfolios.

These fees are typically calculated as a percentage of the total value of the assets held in the IRA. Investors should carefully consider these fees, as they can accumulate over time and significantly impact the overall returns and review the fee structure to understand how it may impact their long-term returns. More on this below…

BitcoinIRA allows users to convert their existing IRAs into cryptocurrency IRAs. BitcoinIRA has a one-time service fee that it charges up front, ranging from 0.99% to 4.99%. These fees are substantial, and among the highest of any BitcoinIRA provider.

In contrast, Swan Bitcoin charges 0% to onboard and transfer funds. 

BitcoinIRA charges a 2% transaction fee which is incurred when executing transactions within the BitcoinIRA platform. This includes buying or selling Bitcoin or other cryptocurrencies, transferring funds, or conducting other transactions related to managing the IRA account.

It’s important for investors to be aware of these transaction fees as they can impact the overall cost and potential returns of their cryptocurrency investments within the Bitcoin IRA. Carefully reviewing and understanding the transaction fee structure can help individuals make informed decisions and effectively manage their retirement savings in cryptocurrencies.

BitcoinIRA charges a 0.8% security fee for safeguarding and protecting the digital assets held within the BitcoinIRA platform.

These fees cover the costs of implementing robust security measures, employing encryption technologies, maintaining secure storage facilities, and ensuring the overall safety and integrity of the cryptocurrencies held on behalf of investors.

The security fee helps provide peace of mind to investors by mitigating the risks of hacking, theft, or unauthorized access to their digital assets within the BitcoinIRA platform. Understanding and acknowledging the security fee is essential for investors to assess the level of protection provided and the associated costs of securing their cryptocurrency-based retirement investments.

When it comes to fees, BitcoinIRA leaves much to be desired in terms of transparency. They make it difficult for investors to get a clear picture of their fee structure, forcing them to reach out to representatives for more information. 

This approach can be bothersome since many other Bitcoin IRA providers like Swan Bitcoin readily provide comprehensive fee information online. Here is how the two compare: 

Despite branding itself as a BitcoinIRA company, BitcoinIRA promotes +60 cryptocurrencies and alternative assets within its crypto IRA platform. This raises concerns about their commitment to Bitcoin and calls into question their integrity and focus on the flagship cryptocurrency.

Adding to the scrutiny, the Securities and Exchange Commission (SEC) has filed lawsuits against major cryptocurrency exchanges such as Binance and Coinbase.

In these legal actions, the SEC has explicitly identified around 67 alternative cryptocurrencies that it considers unregistered securities. Interestingly, many of these tokens are included in Bitcoin IRA’s product offerings.

This alignment of the SEC’s concerns with BitcoinIRA’s portfolio raises further questions about the company’s compliance with regulatory requirements and the potential risks investors face. It highlights the importance for individuals to carefully assess the legal status and regulatory compliance of the cryptocurrencies available within the BitcoinIRA platform before making investment decisions. 

Understanding the SEC’s actions and their impact on the cryptocurrency landscape can help investors navigate the evolving regulatory environment and make informed choices regarding their retirement investments.

While a 5.99% fee might not seem like much to the casual investor, the difference is extraordinary over a decade and multi-decade periods. 

BitcoinIRA: 5.99% per deposit fee
Swan Bitcoin IRA: No deposit fee

If I deposit $6,000 annually into BitcoinIRA’s product, instead of Swan Bitcoin, what is the % difference over twenty years from deposit fees alone?

Fee per deposit = $6,000 × 5.99% = $359.40 
Number of deposits over 20 years = 20 deposits (assuming one deposit per year)
Total fees paid for BitcoinIRA = $59.90 / deposit × 20 deposits = $7,188

No deposit fee, so the total fee paid for Swan Bitcoin is $0.
Total fees for Swan Bitcoin) / Total fees for BitcoinIRA) × 100
Percentage difference = ($7,188 — $0) / $7,188) × 100

Percentage Difference: ≈100%
Dollar Difference: $7,188

At today’s BTC price, $7,188 = 19,165,956 satoshi’s = 0.19 BTC

In a nutshell, Bitcoin IRA’s fee structure is a cause for concern, primarily due to its startling lack of transparency and exorbitant fees that can reach as high as 8%. 

This combination of hidden costs and sky-high fees can significantly impact an investor’s returns and hinder their ability to achieve their financial goals. It’s imperative for individuals to carefully evaluate and compare fee structures among different IRA providers to ensure they are making informed decisions and maximizing the potential of their investments.

In contrast, we at Swan Bitcoin prioritize transparency, offering clear and comprehensive fee breakdowns upfront. By choosing a provider that values transparency and provides a clear understanding of costs, investors can make more informed decisions and have greater confidence in their Bitcoin IRA investments.