If you want to open a bitcoin IRA, then it is vital that you find a good custodian that has your best interests at heart and that will protect your investments.There are not that many bitcoin and ethereum IRA companies out there yet, so you will be happy to know that researching them will not take too long. That does not mean, however, that you should rush through this as your retirement money is at stake. In fact, there are 3 key things you should look for before you open a bitcoin IRA.
3 Characteristics to Find Before You Open a Bitcoin IRA
- The first thing to look for is ratings. You need to find a firm that has plenty of positive reviews and testimonials from existing clients. Hence, checked rustling, the BCA Business Consumer Alliance, and the BBB Better Business Bureau. At the same time, you should check other reputable websites such as YP, the Complaint Board, and Yelp. This will tell you what kind of customer service is offered to you and what the overall quality of these firms is.
- Next you need to look at the safety of the overall process. The biggest risk of investing in Bitcoin, ethereum, or any other kind of digital and therefore intangible asset is that it could be hacked. Hence, you need to look into what kind of malware and hacking prevention is offered by the company. For instance, they may print your private key and store it on an offline machine, known as a cold wallet. They should also use multisig as a feature as well as other types of asset protection options.
- Last but not least, you should look into how easy and efficient it is to set up an account. Unfortunately, there are custodians out there that will take months before an account is open and ready for business and a purchase can be made. Cryptocurrencies move incredibly quickly so you do not have time to wait for an account to be set up as this would quite literally cost you hundreds of dollars.
If you focus on the above three things, you should be able to find a good custodian for your digital IRA. At the same time, you do have to also remain realistic about the risks involved with investing in cryptocurrencies. Yes, they are moving fast, but it is anybody’s guess whether they are moving up or down. This is also why, although it is called a digital or cryptocurrency IRA, you should not have 100% cryptocurrencies in there. A good portfolio is a diverse portfolio and you should make sure that you add plenty of other asset classes there as well.
One final thing to remember is that a digital IRA is a self-directed IRA. This means that you will be the one making all the relevant investment decisions and your custodian is literally solely there to hold your account. If you find a custodian that is also willing to provide you with advice, then you really have found the best one out there.