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Cryptocurrency Investments: Why They’re Becoming More Popular

Cryptocurrency investments are becoming increasingly popular as people look for new ways to diversify their retirement portfolios and increase their savings. Self-directed individual retirement accounts (IRAs) are a great way to invest in cryptocurrency while taking advantage of tax benefits. While investing in cryptocurrencies can be volatile, IRAs offer long-term potential and stability.

There are two main types of crypto Roth IRAs: those provided by traditional IRA providers, and those provided by crypto IRA providers.[0] Traditional IRAs allow you to invest in stocks, mutual funds, or exchange-traded funds (ETFs).[1] A Self-directed IRA is an investment account allowing for self-managed trading of precious metals, real estate, and cryptocurrency.

When it comes to taxes, cryptocurrencies are treated as property by the IRS, and cryptocurrency transactions are taxable.[0] When you sell, trade, or dispose of cryptocurrency in any way and recognize a gain, you must pay taxes on the profit.[2] On the other hand, if you incur a loss, you can deduct that on your taxes.[2] If one holds onto a cryptocurrency investment for more than a year and then sells it for more than what was paid for it, a long-term capital gain is realized.[3] Gains from these investments are subject to long-term capital gains tax rates, which may be as low as 0%.[3]

When it comes to investing in cryptocurrency through an IRA, you’ll need to enlist the help of a custodian.[0] You can open a self-directed IRA to invest in cryptocurrency, but keep in mind that these accounts tend to be more expensive than traditional IRAs.[4] Some of the notable crypto IRA providers include iTrustCapital, BitIRA, and Bitcoin IRA.[5]

Staking crypto is another way to earn rewards for holding cryptocurrencies and providing a built-in investor and user base to give the coin value. By staking your virtual currencies, you can receive money that is considered taxable income.[3]

Overall, investing in cryptocurrency through an IRA can be a great way to diversify your retirement portfolio and realize tax-advantaged gains. However, the extreme volatility of cryptocurrencies makes them a not-so-easy investment when talking about retirement, with the jury being out on whether including cryptocurrencies in a 401(k) retirement plan is sound financial planning or gambling with the future.[6] As such, it is important to do your research and understand the fees, tax implications, and risks associated with cryptocurrency investments before taking the plunge.

0. “Cryptocurrency IRAs: Advantages and Disadvantages”, 18 Jan. 2023,

1. “9 Different Ways to Legally Avoid Taxes on Cryptocurrency”, 18 Jan. 2023,

2. “How Is Cryptocurrency Taxed? (2022 and 2023 IRS Rules)”, 18 Jan. 2023,

3. “Your Crypto Tax Guide – TurboTax Tax Tips & Videos”, 18 Jan. 2023,

4. “Should You Invest in a Bitcoin IRA? – The Balance”, 18 Jan. 2023,

5. “The 6 best IRAs for trading bitcoin and other cryptocurrencies”, 18 Jan. 2023,

6. “Roth IRAs: The ideal long-term cryptocurrency investment?”, 18 Jan. 2023,

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