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There is growing interest in using digital assets like crypto as part of retirement planning. This comes as federal agencies have started to lay the groundwork for a more robust regulatory framework for crypto, and more financial institutions are folding cryptocurrencies into their offerings. Certain established cryptocurrencies like Bitcoin have also seen marked growth over years of turbulent highs and lows.
However, if you’re considering the idea of holding crypto in an IRA, there are some important factors you need to know. Crypto is a complex, highly volatile asset, and there are significant risks to holding crypto in an IRA. In addition, it’s still more loosely regulated than many other types of assets. Here’s what individuals need to be aware of when it comes to a crypto IRA.
Key Points
• Crypto IRAs give account holders exposure to digital assets like Bitcoin and Ethereum.
• Cryptocurrencies are high-risk, volatile, and speculative. They are generally not ideal for individuals with low-risk tolerance or those close to retirement age.
• Tax benefits of traditional IRAs include pre-tax contributions and tax-deferred growth, while tax benefits of Roth IRAs include tax-free growth and tax-free withdrawals in retirement.
• Crypto IRAs generally have higher fees than conventional IRAs.
• IRS annual contribution limits for IRAs in 2025 are $7,000, or $8,000 for those 50 and older; for 2026, they are $7,500 and $8,600, respectively.
What Is a Crypto IRA?
A crypto IRA is an individual retirement account in which individuals can hold digital assets such as Bitcoin, Ethereum, or other cryptocurrencies in the account. A crypto IRA is sometimes referred to as a Bitcoin IRA (Bitcoin is the largest cryptocurrency in terms of total market value).
As cryptocurrency has gained more recognition in the last few years, there has been some interest in holding crypto in a retirement account like an IRA. Approximately 10% of Americans with a retirement account say they hold crypto in their account, according to a July 2025 survey by NerdWallet and The Harris Poll. Younger retirement savers are especially likely to hold crypto: 18% of millennials and 14% of Gen Zers say they have crypto as a retirement holding.
There are different types of IRAs, including traditional IRAs and Roth IRAs, and it’s possible to hold crypto in either one. Each has particular withdrawal rules and tax implications (see more about this below).
But whatever type of IRA an individual may be interested in, it’s important to be aware that IRAs are designed to be long-term savings accounts for retirement. Crypto is highly volatile and risky — if it drops in price, there could be serious negative implications for an individual’s retirement fund. Risk and volatility are factors individuals considering a crypto IRA should carefully consider.
Tax Considerations for a Crypto IRA
A crypto IRA has specific tax implications, depending on the type of IRA it is. For example, with a traditional IRA, individuals make contributions to the account with pre-tax dollars, and any earnings — from crypto or other assets — grow tax-deferred in the account. The account holder pays taxes on qualified withdrawals taken in retirement, which is considered by the IRS to be aged 59 ½ or older.
With a Roth IRA, contributions are made with after-tax dollars. Any earnings, including earnings from crypto, grow tax-free in the account. Qualified withdrawals — for individuals who are at least age 59 ½ and have had the Roth IRA for at least five years — are tax-free in retirement.
Crypto IRAs are subject to the same contribution limits as other IRAs. For 2025, the IRA contribution limits are $7,000 for those under age 50 and $8,000 for those age 50 or older. For 2026, the limits are $7,500 for those under age 50 and $8,600 for those age 50 or older.[1]
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Potential Benefits of Holding Crypto in an IRA
While a crypto IRA poses some significant risks, it may also have potential advantages. Possible benefits of holding crypto might include:
• Access to an emerging asset class: Cryptocurrencies are still a relatively new asset class. Bitcoin, the first established cryptocurrency, launched in 2009, but it didn’t become popular until the Covid-19 pandemic more than a decade later. With a crypto IRA, individuals could get some exposure to this developing asset class.
• Tax advantages: As mentioned earlier, crypto may grow tax deferred in a traditional IRA, or tax-free in Roth IRA, just like any other asset held in the IRA. That said, individuals with a crypto IRA may want to consult with a tax professional about the specifics.
• Portfolio flexibility: Holding crypto within an IRA is a way for an individual to include another asset class beyond the more traditional types of assets, such as cash equivalents, stocks, or bonds, within their portfolio.
Risks and Limitations of a Crypto IRA
A crypto IRA has a number of risks, and individuals who are considering the idea of crypto for their retirement account should weigh the drawbacks very carefully. Risks include:
• Volatility: Cryptocurrencies are highly volatile. For example, there have been several periods when the price of Bitcoin plummeted more than 60% in value, including a 64% drop in 2022. By some estimates, Bitcoin can be up to 5 times more volatile than stocks and bonds.[2]
• High-risk asset: Crypto is a speculative asset and it can have a high degree of price volatility as noted above. Individuals who have a low tolerance for risk, or those who are close to retirement age when they will need their savings, may not be well suited to a crypto IRA.
• Evolving regulations: While federal crypto regulations offering consumer protections have started to take root, they are in the relatively early stages of development. In addition, not all crypto IRA custodians (the financial institution that sets up the IRA) may follow the same level of safe security practices for crypto, which could lead to the assets not being handled properly.
• Fees: Crypto IRAs generally come with more fees than conventional IRAs. For example, some crypto IRA providers may charge individuals to set up a crypto IRA. In addition to set-up fees, other possible fees include annual maintenance fees, transaction fees, and fees for holding the assets, which are typically known as custody fees. Fees vary by provider, so individuals considering a crypto IRA should compare providers.
How to Get Started With a Crypto IRA
Opening a crypto IRA typically involves several steps.
1. Choose a crypto IRA custodian. Interested individuals should do some research to find providers that offer a crypto IRA. Some major brokerages now offer these accounts. Other crypto custodians include specialized firms that offer self-directed IRAs (SDIRAs) that are designed to hold cryptocurrencies. Individuals can look for a crypto custodian they feel comfortable with.
2. Understand fees and account requirements. While evaluating crypto IRA providers, inquire about any fees charged and other account requirements. Ask how crypto assets will be stored and what security measures the company has in place. Compare providers’ policies and fee structures.
3. Open the account. Once an individual has chosen a provider, they can open a crypto IRA account. They’ll typically need to provide their personal information, such as name and address, Social Security number, and bank account information.
4. Fund the account. Individuals can fund their crypto IRA with money directly from their bank account. Depending on the type of IRA it is, they can use pre-tax or after-tax dollars. They can then make crypto transactions within the account.
Decide if a Crypto IRA is Right for You
A crypto IRA may be of interest to some individuals seeking exposure to this emerging asset class, but there are also some significant drawbacks to these accounts. Crypto IRAs involve high risk, are extremely volatile, and have fewer protective regulations than many other assets. For those close to retirement age or individuals with a low tolerance for risk, a crypto may not make sense.
While a crypto IRA does have potential advantages, including certain tax benefits, it’s important to carefully weigh the pros and the cons of these accounts. Individuals should consider their risk tolerance, savings timeline, and financial goals before making a decision.
The Takeaway
Crypto IRAs are a type of retirement savings vehicle in which individuals can hold cryptocurrencies in the account. Crypto IRAs may have potential benefits for some individuals, but they also come with significant risks, including high volatility, evolving regulations, and possibly higher fees. It’s wise for individuals to do their research and investigate these accounts thoroughly to make sure a crypto IRA is right for them.
Soon, SoFi members will be able to buy, sell, and hold cryptocurrencies, such as Bitcoin, Ethereum, and more, and manage them all seamlessly alongside their other finances. This, however, is just the first of an expanding list of crypto services SoFi aims to provide, giving members more control and more ways to manage their money.
FAQs
Is it a good idea to put crypto in a retirement account?
Whether it’s a good idea to put crypto in a retirement account depends on an individual’s risk tolerance, retirement savings timeline, and financial goals. Cryptocurrencies are highly volatile and risky assets, and there is a potential for financial losses.
What is a self-directed IRA (SDIRA)?
A self-directed IRA (SDIRA) is an IRA that allows individuals exposure to a broader range of assets than conventional IRAs. These assets may include crypto. With a SDIRA, the account holder has full control and management over the assets in their account.
What are the tax advantages of a crypto IRA?
Tax advantages of a crypto IRA depend on the type of IRA it is. With a traditional IRA, contributions are made with pre-tax dollars, earnings grow in the account tax-deferred, and an individual pays taxes on withdrawals in retirement. With a Roth IRA, contributions are made with after-tax dollars, and earnings in the account grow tax-free. Withdrawals are tax-free in retirement.
Are the fees higher for a crypto IRA than a traditional one?
Crypto IRAs (sometimes referred to as Bitcoin IRAs) generally have higher fees than conventional IRAs. Fees vary by provider, and possible charges may include set-up fees, custody fees, annual maintenance fees, and transaction fees.
Can I add crypto to my existing 401(k) or Roth IRA?
Generally speaking, no. It’s difficult to add crypto to an existing 401(k) since the assets you can choose from depend on what your employer offers. With a Roth IRA, you would need to have an IRA custodian that offers crypto assets, such as a Bitcoin ETF. You could instead set up a self-directed IRA or a crypto IRA and add crypto to that account.
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