Investing in cryptocurrencies such as Bitcoin, Litecoin, Ethereum and others is possible in a self-directed IRA. Profits earned in a self-directed cryptocurrency IRA are paid directly to the IRA without any taxable obligation other than those applied in retirement. A self-directed IRA allows you to invest in Bitcoin, as well as other alternative investments such as gold. You can use a traditional IRA (pre-tax funds) or a Roth IRA (tax-free withdrawals) to invest in the best rated Gold IRA companies. Some investors buy Bitcoin to keep them in the same way and for the same reasons as gold or other precious metals, which are also allowed investments within a self-directed IRA.
Recently, custodians and other companies designed to help investors include Bitcoin in their IRAs have become increasingly popular. Because cryptocurrencies are property, an IRA can purchase cryptocurrency by purchase without violating rules that prohibit IRAs from storing collectibles or coins.