Can You Hold Cryptocurrency in a Roth IRA?

Holding crypto in a Roth IRA has tax benefits, but it's not a widely available option.
Kurt Woock
By Kurt Woock 
Edited by Claire Tsosie

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Owning cryptocurrency directly in your Roth IRA is possible, but to do it, you’ll need to open an account with a niche platform that offers it as an option.

The advantage of investing in a Roth IRA instead of a standard brokerage is the tax savings: You won’t pay capital gains taxes on the sale of any investments that increase in value. Given the upside associated with high-risk investments, the savings could be significant, though the risk of loss is also high.

Although major Roth IRA account providers, also called custodians, typically don’t offer direct investing in cryptocurrency, they often have alternative crypto-related investments including coin trusts, futures and stocks with crypto exposure.


  • Potential to make big gains and not pay taxes on them.

  • Could be a way to increase your portfolio’s diversification.


  • Returns aren’t guaranteed, and high-risk investments aren’t appropriate for everyone’s retirement timeline or goals.

  • Direct ownership probably requires working with a small, relatively new custodian.

  • Fees can take a bite out of your holdings. Expect at least 1% to 2% for every purchase and sale for crypto IRAs; by contrast, most major custodians don’t charge trading fees.

  • If you work with a financial planner, they might not be equipped to advise on crypto.

Cryptocurrencies and Roth IRAs

First, a few basics about Roth IRAs and what the IRS allows:

  • A Roth IRA is a retirement account in which you can add after-tax dollars and make investments with those contributions. You are not taxed on any investment gains your investments might have. If you take withdrawals before retirement age, you’ll be penalized.

  • The Internal Revenue Service issues rules that govern how these types of accounts work, including what types of investments you can make within them. You can’t, for example, hold artwork or a coin collection. Holding virtual currencies in these accounts is allowed, however.

  • New contributions to your account must be made in cash; you can’t transfer cryptocurrency you already own into a Roth IRA.

  • The IRS does not review, approve or endorse investments. The Commodity Futures Trading Commission, which regulates U.S. derivative markets, has warned investors “to be cautious of sales pitches touting ‘IRS approved’ or ‘IRA approved’ virtual currency retirement accounts.”

Owning cryptocurrency directly: What you should know

Major platforms don't offer this option

It’s important to distinguish between what’s allowed in Roth IRAs and what various custodians offer.

Just because IRS rules allow cryptocurrency to be held in a Roth IRA doesn’t mean that custodians must offer the option to their customers. Many popular custodians, including Vanguard, Charles Schwab and TD Ameritrade, don’t.

However, there are custodians that do allow you to hold crypto in a Roth IRA, including Bitcoin IRA, Bit IRA and iTrustCapital. These firms focus almost exclusively on cryptocurrency investing; you won’t have a list of stocks, mutual funds, ETFs or other investment types available to you as you would with a traditional financial firm.

Transaction fees apply

Fees when buying crypto can be high, and in some cases they're not transparent, compared to traditional investment firms. You might also see additional fees, like startup fees, that are uncommon with traditional IRA custodians.

It’s common for crypto platforms to charge 1% to 2% on each transaction. What does that look like? If you bought $1,000 in crypto and later sold it for $2,000, you would be charged $30 to $60.

Most major custodians don't charge transaction fees. Investment funds, such as mutual funds or exchange-traded funds, have expense ratios, but it’s common to find low-cost options. For example, if you bought $1,000 of an index fund that had an expense ratio of 0.02%, and the value increased by $100 each year for 10 years, you would pay a total of $29 in fees for the entire decade.

You might need a separate IRA for traditional investments

You might consider cryptocurrency to be one component of a diversified portfolio, alongside traditional investments. But crypto IRAs typically don’t allow you to hold traditional investments. So how can you hold both?

One option would be to open Roth IRAs at two or more custodians. The IRS sets limits on the amount of new money you can add each year to the Roth IRA accounts you own, but there isn’t a limit to the number of accounts you can have. For example, you could set up a Roth IRA for traditional investments and add $1,000. You could then open a second Roth IRA with another company — one that accommodates cryptocurrency — and add $500.

If you already have a Roth IRA account, another option would be to roll over a portion to a new account dedicated to crypto.

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Alternatives to owning crypto directly

If you’re willing to be flexible, you can gain financial exposure to cryptocurrency without owning cryptocurrency directly. Many established custodians, like Charles Schwab and Fidelity, offer crypto-related investment products.


Publicly traded companies create much of the physical and digital infrastructure used in the crypto world. Coinbase, for example, is a popular crypto trading platform and also a publicly traded company. Payment companies like Block (parent company of the Square brand) and PayPal are building crypto lines of business. Chip manufacturer Nvidia is closely associated with crypto miners. If you don’t like picking individual stocks, ETFs like iShare’s Blockchain and Tech ETF bundle many crypto-adjacent companies into one investment product.


The closest you can come to owning cryptocurrency in a Roth IRA with a traditional custodian is through a crypto trust. Crypto trusts are crypto-holding legal entities that you can invest in. Like other publicly traded securities, they have ticker symbols and shares that can be purchased.

Trusts make owning crypto easily accessible through conventional means, but it also results in a product that doesn’t always track volatile prices with the fidelity that investors might want. Nevertheless, it’s a relatively easy way to track the movement of a specific cryptocurrency without actually buying it.


Crypto futures are another product created to mimic the price of select cryptocurrencies. Unlike crypto trusts, these products do not hold any cryptocurrencies. Instead, managers trade futures — time-limited contacts that give the right to buy or sell a product at a certain price — to attempt to capture the price of a cryptocurrency or group of cryptocurrencies.

The costs associated with futures trading and the inherent uncertainty in futures trading mean the price might lag the actual price of the underlying coin. You can trade futures directly, which is complex, or you can buy an ETF that uses this strategy.

» What do crypto taxes cost? Find your bracket

Neither the author nor editor held positions in the aforementioned investments at the time of publication.

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