Most of us live in the risk it for the biscuit mantra but investing for the long term is usually the wiser option. I mean we need to think about tomorrow, and not just live for today. Which brings us to crypto roth IRA’s. Yes, this is actually a thing right now due to the fact that cryptocurrencies have provided such great returns these last few years.
What Is a Crypto Roth IRA?
For those that don’t exactly understand what a roth ira is let’s first delve into it. And basically, an IRA is an account used to save for retirement. A Roth IRA is a special type of tax-advantaged individual retirement account to which you can contribute after-tax dollars. The primary benefit of a Roth IRA is that your contributions and the earnings on those contributions can grow tax-free and be withdrawn tax-free after the age 59½ assuming the account has been open for at least five years. In other words, you pay taxes on money going into your Roth IRA, and then all future withdrawals are tax-free.
Once you begin to add funds to your Roth IRA, a variety of investment options exist within it, including mutual funds, stocks, bonds, exchange-traded funds, certificates of deposit, money market funds, and now even cryptocurrency. Since we are strictly talking about crypto for this type of investment there are three solid companies which will allow you to open a Crypto Roth IRA starting with Bitcoin IRA.
1. Bitcoin IRA
Bitcoin IRA was launched in 2016 to enable investors to hold cryptocurrency in their IRA and 401 k accounts. They offer both traditional and Roth IRA accounts, as well as self-directed 401(k) accounts. The company already has more than 500,000 users and claims to be the largest crypto retirement platform in the industry. The initial investment ask is a bit high at $3000, but if your smart about this then it won’t matter because you’re in it for the long term.
Another cool thing about them is they offer over 60 plus cryptocurrencies, and they keep your digital assets safe by storing 100% of your investments offline. Digital assets are placed in a segregated cold storage account at BitGo Trust, which is a U.S.-based qualified custodian. You’ll also get the benefit of 256-bit encrypted SSL certification trading, as well as a digital wallet with industry-leading standards of multi-sig (P2SH) for security and HD (BIP32) for financial privacy.
2. iTrustCapital
Second, is iTrustCapital. Founded in 2018, iTrustCapital is an SDIRA platform that lets you invest in IRAs with alternative assets like cryptocurrencies, silver, and gold. The platform offers multiple IRA types — including traditional, Roth, SEP, and SIMPLE IRAs — and it allows for crypto staking rewards of up to 9.5%.
They currently offer over 30 plus cryptocurrencies to invest in, and the only downside is that they only insure funds you hold in USD. Its FDIC insurance doesn’t apply to cryptocurrencies or precious metals. However, the account minimum to get started here is a little less at $1000.
3. Alto CryptoIRA
Last is Alto CryptoIRA. Alto CryptoIRA uses Coinbase, a leading exchange, as its trading partner. This means you don’t have to open an LLC or jump through complex regulatory hoops like you do with some crypto IRA companies. Rather, fund your Alto CryptoIRA account and access 24/7 crypto trading through Alto’s dashboard. The partnership with Coinbase is also why you will have access to so many different cryptos of over 150 plus.
The fee’s on here also very low, and you can get started with a minimum of $1000 here as well. The good news is your funds are also completely insured upon signing up and making your first deposit.
Benefits To Crypto IRA’s
Okay, now that you know a little about Crypto Roth IRA’s let’s recap on the three biggest benefits starting with taxation.
- Taxation
With a crypto IRA, you defer tax payments until you withdraw the funds at retirement and can actually get immediate tax benefits on contributions. For Roth and traditional IRAs, contributions are not tax-deductible. With crypto tax-loss harvesting, either with crypto tax software or not, you can reduce taxes further by selling the assets at a loss.
With a Bitcoin or cryptocurrency IRA, transferring value from crypto to dollars creates a non-taxable transaction and you won’t have to report capital gains on these transactions by the end of the tax year. You also do not track all transactions for reporting purposes. The money also accumulates for years tax-free even though the tax percentage rate will be higher for a Bitcoin IRA when withdrawing the funds. With a Roth IRA, you pay no income tax.
- Diversification
Second, you will get more diversification pertaining assets to diversify to. You are also more flexible to sell to transfer value from one asset to another as liked.
- Decentralization
And, lastly decentralization This means a minimal central point control on operations than happens in a traditional financial market as well as minimal or no third-party interference. The technology allows a market for investors and players without manipulation.
Top 3 Long Term Cryptos
1. Enjin Coin
Of course, we are going to wrap things up with three of our favorite long term cryptos to lock up for the next ten years starting with Enjin Coin. Enjin is a software that gives developers the ability to create and manage virtual goods on the Ethereum blockchain. The idea is that by using blockchain technology to manage in-game items across many different properties, Enjin can help reduce the high fees and fraud that have plagued the transfer of virtual in-game goods and collectables. Toward that goal, Enjin has released software development kits (SDKs) allowing users to both create digital assets on Ethereum and integrate them into games and apps.
Each minted asset is customizable to fit the desired platform and recorded in a smart contract, giving the items the advantages of cryptocurrency, namely speed, cost and security. Central to managing the digital assets on its platform is ENJ, Enjin’s cryptocurrency, and each in-game item created on Enjin is assigned a value in ENJ. Bottom line the price on this coin is very undervalued and could skyrocket at any given moment.
2. Sushiswap
Next, we have Sushiswap. SushiSwap is a software running on Ethereum that seeks to incentivize a network of users to operate a platform where users can buy and sell crypto assets. Similar to platforms like Uniswap and Balancer, SushiSwap uses a collection of liquidity pools to achieve this goal. Users first lock up assets into smart contracts, and traders then buy and sell cryptocurrencies from those pools, swapping out one token for another. One of a growing number of decentralized finance (DeFi) platforms, SushiSwap allows users to trade cryptocurrencies without the need for a central operator administrator. This means that decisions relating to the SushiSwap software are made by holders of its native cryptocurrency, SUSHI. Anyone holding a balance of the asset can propose changes to how it operates and can vote on submitted proposals by other users.
3. Polkadot
Finally, we have Polkadot. Polkadot is a software that seeks to incentivize a global network of computers to operate a blockchain on top of which users can launch and operate their own blockchains. In this way, Polkadot is one of a number of competing blockchains aiming to grow an ecosystem of cryptocurrencies, other notable examples of which include Ethereum and Cosmos. However, Polkadot, launched more recently, is among the newest, and it introduces a number of novel technical features toward its ambitious goal. To begin, Polkadot is designed to operate two types of blockchains. A main network, called a relay chain, where transactions are permanent, and user-created networks, called parachains.
Parachains can be customized for any number of uses and feed into the main blockchain, so that parachain transactions benefit from the same security of the main chain. With this design, the Polkadot team contends transactions can be kept secure and accurate using only the computing resources required to run the main chain. Users, though, gain the added benefit of being able to customize many parachains for many different uses. The Polkadot team believes this design will let its users perform transactions more privately and efficiently, creating blockchains that don’t disclose user data to the public network or that otherwise process a greater number of transactions. To date, Polkadot has raised roughly $200 million from investors across two sales of its DOT cryptocurrency, making it one of the most well-funded blockchain projects in history.
