Account holders at Directed IRA can invest their IRA into bitcoin and other cryptocurrencies using a Crypto IRA.
A Crypto IRA is an account (roth or traditional) that is set up at Directed IRA for the purpose of buying and selling cryptocurrency. Your IRAs and 401(k)s can invest in Bitcoin, XRP, Solana, and a host of other cryptocurrencies—unlocking tax-deferred or tax-free growth opportunities within your crypto portfolio.
To invest in crypto with an IRA, individuals must set up a new IRA specifically for crypto trading. Crypto IRAs are not a unique “type” of IRA; however, crypto accounts require a different system, compliance process, and procedures and must be separate from other accounts held at Directed IRA. Each Crypto IRA requires a Gemini Trading Account to be set up under the new IRA (we’ll set that up for you). Directed IRA’s relationship with Gemini allows account holders to self-direct into any cryptocurrency currently offered on the Gemini Exchange.
Download our Beginner’s Guide: Buying Crypto in Your IRA
Crypto IRA or Crypto IRA/LLC?
| Crypto IRA (Gemini) | Crypto IRA/LLC | |
|---|---|---|
| Where the crypto is held | A Gemini trading account owned by your IRA | An exchange account or wallet owned by your IRA’s LLC |
| What you can buy | Any crypto on the Gemini Exchange | Crypto on other exchanges and wallets |
| Private keys | Held at Gemini | Your LLC can hold its own keys |
| Setup | Online application; we set up the Gemini account for you | LLC formed by an attorney, plus an LLC bank account and exchange account |
| Directed IRA fees | $50 setup, $295 a year, 0.50% per trade | Standard account fees ($495 a year) plus LLC formation and state fees |
| Common for | Buying, holding and trading major coins | Investors who want their own keys, other exchanges, staking or mining |
Cryptocurrency has demonstrated significant appreciation over the years, making it an increasingly popular choice for investors self-directing their IRA. Crypto is a digital form of money that is considered property and can be transferred between private parties and is not owned or controlled by a bank or government entity.
IRAs can invest and own crypto as an asset. The only assets that an IRA cannot own are ones specifically restricted by law. One type of restricted asset for IRAs is anything that is deemed a collectible pursuant to IRC 408. For the purposes of crypto, the IRS has interpreted that to mean NFTs that only hold collectible value (no utility value). As a result, NFTs that are collectible in nature are restricted as an asset and cannot be owned by your IRA. But, all other crypto assets can be owned by your IRA.
Open a Crypto IRA at Directed IRA
• Fill out and e-sign a Crypto Account Agreement and provide a copy of your government-issued ID (such as a driver’s license or passport).
• If you already have an account with Gemini (personal or other account) you will need to use a different email address at Gemini for your new Crypto IRA.
Fund Your Account
• Transfer or rollover existing retirement account funds or make a new contribution.
• Schedule a call with our funding team if you need help.
• Your application will also authorize the initial investment amount from your Directed IRA account to fund your Gemini trading account so that as funds arrive in your Directed IRA account they will then be invested over and funded into your Gemini trading account as USD ready to trade.
Directed IRA sets up a Gemini Trading Account
• Once your application is reviewed, Directed IRA sets up a Gemini trading account for your IRA.
Gemini Login
• You will receive an email from Gemini with login and onboarding instructions to access and use your new Gemini Crypto Trading Account. Gemini is the trading account and wallet we will fund from your Crypto IRA and where you will trade Crypto.
Start Investing
• Trade and store your cryptocurrency using your IRA owned Gemini account.
See the full step-by-step guide to buying crypto in your IRA
Crypto trades in a Crypto IRA are subject to a 0.50% Trade Processing Fee. This trade fee is inclusive of Gemini and Directed Trust Company trade fees. For a $10,000 trade, the trade fee would be $50. Please note that Gemini may modify its account fee schedules at any time. You can use any available trade interface on Gemini’s Exchange.
What about Storage Fees? No. There are no additional storage fees to store your crypto on the Gemini exchange.
Directed IRA’s relationship with Gemini allows account holders to self-direct into any cryptocurrency currently offered on the Gemini Exchange. Crypto IRAs can invest in Bitcoin, Ether, Tether, XRP, Solana, and more.
Yes. An IRA can own Bitcoin and other cryptocurrencies. The IRS treats crypto as property, and the tax code only rules out a few assets for IRAs, such as collectibles and life insurance. Most IRA providers just don’t offer crypto. At Directed IRA, you open a Crypto IRA, fund it, and your IRA buys Bitcoin through its own Gemini trading account. See the step-by-step guide.
Yes, and Roth IRAs are the most popular choice for crypto. Trades inside a Roth IRA aren’t taxed, and qualified withdrawals (after age 59½ and at least five years after your first Roth contribution) are tax-free, so a Roth can keep all of its crypto gains. A Crypto IRA can also be a Traditional IRA, SEP IRA, HSA, Coverdell ESA, Inherited IRA or Solo 401(k). How a Crypto Roth IRA works.
No. IRA contributions have to be made in cash, and selling crypto you own to your IRA would be a prohibited transaction. You can sell your crypto personally (which may be taxable) and contribute cash up to the annual limit, or fund your Crypto IRA by transferring cash from another IRA or rolling over a former employer’s 401(k).
Breaking these rules can disqualify the whole IRA and make it taxable.
It can, but it’s more involved than buying and holding, and the taxes are different. Most investors who stake or mine use an IRA/LLC. Mining income is business income, so the IRA owes unrelated business income tax (UBIT) at trust tax rates that reach 37%, and files Form 990-T. Staking through a third-party platform generally doesn’t create UBIT, while running your own validator nodes can. Talk with a tax advisor before you start. More on staking and mining.
No. To invest in crypto with an IRA, account holders must set up a new IRA specifically for crypto trading. Crypto IRAs are not a unique “type” of IRA; however, crypto accounts require a different system, compliance process, and procedures. Each Crypto IRA requires a Gemini Trading Account to be set up under the new IRA (we’ll handle that for you).
No. But, you can easily transfer cash from your Crypto IRA to any other Self-Directed IRA held at Directed IRA.
Crypto trades in a Crypto IRA are subject to a 0.50% Trade Processing Fee. This trade fee is inclusive of Gemini and Directed Trust Company trade fees. For a $10,000 trade, the trade fee would be $50. Please note that Gemini may modify its account fee schedules at any time.
The IRS issued IRS Notice 2014-21 addressing the taxation of Bitcoin and cryptocurrency and stated that Bitcoin and other forms of virtual currency are considered property. The sale of property by an IRA is generally treated as capital gain, so the buying and selling of cryptocurrency for investment purposes would not trigger Unrelated Business Income Tax (UBIT) or other adverse tax consequences that can occasionally arise in an IRA.
You can learn more about Gemini’s controls, audits, and protections here. There is no FDIC insurance and no guarantees. Crypto is an investment subject to loss of the entire principal amount.
No. At this time you cannot have access to your own keys. If this is something you want then you’ll need to use the IRA/LLC structure instead and that structure is more costly and you’ll need an attorney to advise you. We have educational content and videos outlining that structure and can refer you to experienced attorneys in that area.
Once you’ve funded your Crypto IRA and those funds have cleared at Directed, Directed will send your funds to your Gemini account where you’ll have full control and responsibility to make trades. The standard processing time is 3 business days after your Crypto IRA has been funded.
No. If this is something you want then you’ll need to use the IRA/LLC structure instead.
You can use any available trade interface on Gemini’s Exchange. Such as: ActiveTrader, TradingView, Gemini Mobile app, or the Basic Gemini Web Trade Interface.
Crypto IRA/LLCs are an option for those who want to hold their crypto private keys, buy alternative crypto not available on the Gemini Exchange, or who want to use other wallets or trade other types of crypto. Learn more.
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Mat Sorensen, Attorney, CEO, and Founder of Directed IRA, wrote the #1 book on self-directed IRAs – selling over 60,000 copies nationwide. The Self Directed IRA Handbook is a comprehensive guide written for both investors and advisors alike. Download your free copy today!
