This guide enlists the best crypto Roth IRA in 2023.

These crypto Roth IRAs allow you to include Bitcoin and other cryptocurrencies in your Roth retirement savings account.

Cryptocurrencies, including Bitcoin, have undoubtedly gained popularity and are now a significant part of mainstream finance and investment. 

Many investors have successfully made fortunes through these digital assets, making it worthwhile to consider including cryptocurrencies in our retirement planning. 

Therefore, I have put together a comprehensive guide of the top crypto Roth IRAs for 2023 to help you make informed decisions about investing in cryptocurrencies for your retirement.

Listen. Cryptocurrencies are risky propositions. We need to carefully examine all the aspects including the legality of crypto in Roth IRAs, pros and cons of crypto in Roth IRAs and then finally proceed to list down the best crypto Roth IRA in 2023.

Best crypto Roth IRA in 2023

The table below enlists the best crypto Roth IRA in 2023.

Can you hold cryptocurrencies in your Roth IRA?

The answer is a resounding YES.

The IRS allows us to include cryptocurrencies in Roth IRAs.

However, not every Roth IRA provider or custodian offers the inclusion of cryptocurrencies in your Roth investments.

While popular custodians like Vanguard, TD Ameritrade and Charles Schwab do not allow cryptocurrencies in Roth, other custodians like Bitcoin IRA, BitIRA and iTrustCapital do allow cryptocurrencies in your Roth.

Pros and Cons: Best crypto Roth IRA

Deciding whether or not to invest in crypto within your Roth IRA should be a careful decision based on several factors. 

These factors may include your risk tolerance, age (as younger investors may have more time to wait for profits), your understanding of the investment process, and considerations related to crypto taxation.

It is certainly not advisable for someone who is about to retire soon as he or she could face the brunt of the price volatility of Bitcoin or other cryptocurrencies he has invested into.

The IRS considers Bitcoin and other cryptocurrencies in the IRA as a property. A property which you can purchase and add to your IRA.

Let us check the pros and cons of including cryptocurrencies in your Roth IRA.

Pros:

1. Diversification: Incorporating cryptocurrencies into your Roth IRA can be an effective way to diversify your investment portfolio. The consensus among industry experts is that cryptocurrencies are here to stay. The key is to allocate a portion of your portfolio to utility cryptocurrencies, which possess practical applications such as in DeFi, rather than purely speculative assets, and to hold onto them for an extended period. It is crucial to conduct thorough research before investing in cryptocurrencies.

2. Tax advantage: One of the most significant advantages of a crypto IRA is its tax benefits.
   
   For tax purposes, IRS treats cryptocurrencies as property, and capital gains taxes are levied on them when you sell cryptocurrencies for a profit in a normal scenario.
   
   However, investing in cryptocurrencies via your IRA account may offset the Capital Gains Tax.
   
   When you buy them via the Roth option (Roth crypto IRA) and hold them up to 59.5 years of age, no Capital Gains taxes are levied on withdrawal.
   
   Furthermore, traditional crypto IRAs, offer deductions in your annual taxable income. Also, taxes are only levied when you withdraw them after 59.5 years of age. At this stage, you probably will be in a lower income tax bracket and hence will be able to save more on taxes.

3. High potential returns: If we do our proper research and invest for the long term, cryptocurrencies offer high potential returns.
   
   In the past few years, we have seen major rallies in prices for cryptocurrencies.
   
   Bitcoin itself witnessed a whopping increase from a mere $0.09 when it started to its ATH of around $68,000 in just a matter of 10 years.
   
   But volatility is also something that we need to be aware of.
   
   Generally, cryptocurrencies that have real-world applications are bound to give heart-throbbing growth to your investments. Although volatility along the way is also almost certain.

Cons: 

1. High transaction costs: Including cryptocurrencies like Bitcoin and Ether in your Roth IRA incurs costs such as one-time set-up fees, recurring maintenance fees, and trading charges (usually 1% to 2%).
   
   The costs are often not clearly stated on the platforms, which can be surprising later on. In addition, there may be hidden fees that are not commonly seen in traditional Roth IRAs.

2. High volatility: Cryptocurrencies are mostly driven by speculation and do not have a real value attached to them, causing them to lose their value significantly over time.
   
   Cryptocurrencies are still in their nascent stages compared to other securities such as stocks and bonds.
   
   Despite all the media hype, they are owned by a small faction of investors. Thus, even a small fraction of investors buying or selling can significantly impact cryptocurrency prices.
   
   Furthermore, other factors such as regulations and news can also contribute to cryptocurrency volatility.

3. Custodian requirement: Holding Bitcoin and other cryptocurrencies is not prohibited by the IRS, but not all Roth IRA providers offer to hold cryptocurrencies.
   
   If a Roth IRA provider allows cryptocurrency holdings, the next step is to find a custodian that can securely keep them. You would need to work with a custodian that will safely hold your Bitcoins and other cryptocurrencies.
   
4. Direct transfer not possible: You cannot transfer or roll over Bitcoins you already own to your Roth IRA.”

FAQs

Conclusion

We need to be cautious. Bitcoin and cryptocurrencies are risky propositions. They are highly volatile and yet are not fully regulated. 

We have seen a sharp downturn in the prices of cryptocurrencies recently which has made people skeptical of their worthiness.

My portfolio in cryptocurrencies went down by almost 60% in the last few months.

But hold on. I have not panic-sold my Bitcoin and ADA. I am holding them and am pretty hopeful of them making decent profits in the coming years.

So you see, if you ask me, the point is to first invest only in the major cryptocurrencies like Bitcoin, ADA, Solana, Ether, etc. (which have some utility attached to them, ex: Ether, ADA, and Solana are used in DeFi applications), and second invest for a long time.

That way you are bound to make huge profits in cryptocurrencies and in fact any other financial assets. 

But these are entirely my views. Please do proper research before investing in cryptocurrencies.