Cryptocurrency | The Entrust Group

cryptocurrency

Investing in cryptocurrency with a self-directed IRA can be part of a tax-advantaged strategy to grow your retirement portfolio.

Cryptocurrency, or “crypto” as it is commonly called, is a virtual currency designed to provide an alternative to centralized currency. Cryptocurrencies are created with cryptography and kept on a digital public ledger that verifies transactions on a blockchain.

The most well-known crypto coin is Bitcoin, but others including Ethereum, Ripple XRP, Cardano, Litecoin and many more are also traded in high volumes.

The market for crypto is well known for its volatility. Although this digital asset has seen incredible growth over the last several years, it is also susceptible to fluctuations. Because crypto is a relatively new asset that operates outside of current banking structures, the regulatory demands are a constant source of discussion and potentially subject to changes.

Cryptocurrency Purchasing Strategies

When it comes to investing in cryptocurrency with your SDIRA, you have two options:

Invest in Cryptocurrency Fund

If you're interested in cryptocurrency but prefer not to hold it directly, consider investing in a digital currency fund or other crypto-based assets. These investment products operate similarly to mutual funds, allowing you to invest in companies involved in cryptocurrency services or holding coins.

By investing in these funds, you gain indirect exposure to cryptocurrency without the need for managing wallets or keys. However, it's important to note that your SDIRA will incur any associated fees, and there may be restrictions on accessing or selling your shares in the fund.

The process to invest in a crypto fund with an SDIRA at Entrust is the same as investing in private equity. Initiate a purchase in the Entrust Client Portal for any crypto fund you would like to invest in by completing an Alternative Asset Investments Request. Once Entrust processes the request, we will send the funds to the crypto investment fund you have selected.

You can begin investing in crypto with self-directed IRA by following this process:

START

STEP 1

Open a self-directed IRA

Start by opening your SDIRA.

STEP 2

Fund your account

Fund your account via a transfer, rollover, or cash contribution.

STEP 3

Log in to the Entrust Client Portal to submit a new alternative asset investment request.

STEP 4

Your SDIRA now holds crypto-based assets.

FINISH

Invest in Cryptocurrency Through an LLC

Another option for cryptocurrency investment with an SDIRA is through an LLC. This structure offers benefits like potential liability protection and checkbook control over your retirement funds. However, you will need to factor in the costs of establishing and maintaining the LLC.

With an LLC, your SDIRA can hold a private wallet or opt for a wallet on any exchange platform. You can learn how to establish an LLC or our LLC page. Once you have set up your SDIRA and an LLC, you can use the fund in the LLC's checking account to begin investing in cryptocurrency.

You can begin investing in crypto through an LLC by following this process:

START

STEP 1

Open a Self-Directed IRA

Start by opening your SDIRA.

STEP 2

Fund your account

Fund your account via a transfer, rollover, or cash contribution.

STEP 3

Set up an LLC

STEP 4

Apply for an EIN

Prepare your operating agreement and apply for an EIN so you can open a checking account.

STEP 5

Submit an investment request

Submit an investment request in order to fund the LLC's checking account, and upload your operating agreement to the Entrust Client Portal.

STEP 6

Entrust will issue a check or send a wire or ACH in the name of your SDIRA

STEP 7

Private wallet or on an exchange

Your SDIRA can now purchase cryptocurrency through the LLC with a private wallet or an exchange.

FINISH

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