In today’s edition, DAIM’s Bryan Courchesne explains how bitcoin can be included in US individual retirement accounts, what to watch for, and the importance of working with a financial advisor.
Next, Eric Tomaszewski of Verde Capital Management shares tips on how to prepare for tax season on Ask and Expert.
– Sara Morton
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Bitcoin Could Be on the Verge of a Big Breakout: Is Your IRA Ready for the Opportunity?
Top researchers and big investors are setting price targets for bitcoin that project it to be potentially on the verge of a major bull run. Tom Lee says bitcoin will cost $250,000 this year, and Michael Saylor says bitcoin will hit $500,000 overnight.
Imagine having a substantial allocation of bitcoin in your retirement account before this bull run accelerates—a tax-advantaged allocation funded by an old Individual Retirement Account (IRA) that you may have forgotten about. The opportunity is right in front of you, but it’s essential to set it up the right way with a platform that offers comprehensive support and peace of mind.
Step 1: Direct your IRA yourself or work with an advisor
When investing in bitcoin through your IRA, security and compliance are paramount. A qualified custodian ensures that your retirement assets are managed according to IRS regulations, offering a layer of protection beyond simple wallet management. If you select a self-directed method, know that it will be up to you to handle the transfer and make investment decisions. If you go with an advisor, they will handle most of the transfer process for you, right down to portfolio management.
Self-direction means that you must monitor your investments, which are vulnerable to errors, fraud or mismanagement. An advisor has done due diligence on the service providers and regularly monitors the accounts for the best outcome.
Step 2: Set Up Your Tax-Advantaged Crypto IRA
Once you have chosen a platform or self-directed advisor, the next step is to register, which involves executing and approving an agreement with the client. While the process is similar for both options, working with an advisor offers key advantages. An advisor can help you design a portfolio tailored to your risk profile, guide you in determining appropriate position sizes relative to your other investments, and help you implement a long-term investment plan that aligns with your financial goals. In contrast, self-directed platforms don’t provide personalized guidance, don’t care what you buy, and are often incentivized to encourage frequent trading, which can erode their returns over time.
Additionally, it is essential to establish the correct IRA structure. For example, if you already have a traditional IRA, you will need to open a new traditional IRA with the crypto IRA provider for consistency. Transferring assets can be complicated, especially if you’re not sure which investments to sell, how much to revert, or how to track the transfer process. An advisor can guide you through these steps, handling much of the complexity and ensuring a smoother experience.
Step 3: Invest for growth as the crypto sector rises
As mentioned above, a self-directed platform allows you to select investments, determine position sizes, and decide when to buy or sell. If you are confident in your ability to outperform the market and manage these decisions independently, this approach could work for you, but it requires time, experience and discipline, with no safety net if mistakes are made.
On the contrary, working with an advisor offers a clear advantage. Advisors provide guidance tailored to your financial goals, help you select high-quality investments, and can offer you pre-designed portfolios with proven track records. Instead of going it alone, you’ll gain access to a team of experts whose full-time job is managing digital assets and staying ahead of industry trends.
As many experts predict, the next bitcoin bull run could push prices into six figures. By taking out a bitcoin IRA today, you can position yourself to benefit from this potential growth while taking advantage of tax advantages and professional management to support long-term success.
– Bryan Courchesne, CEO of DAIM
ask an expert
Q. It’s the beginning of a new year. What are some things I should consider so I can start the year off effectively?
It is important to focus on systems rather than objectives. Goals will give you direction, while systems will create progress. Identify daily and weekly actions that will help you achieve larger goals, personally and professionally. From there, start small, repeat constantly, and link new habits to existing ones to help you remember and reinforce.
Q. It’s 2025, so what strategies can I use for fiscal year 2024?
Fortunately, it’s not too late to find tax deductions, as there are a variety of options to consider. Traditional IRAs, health savings accounts (HSAs), and contributions to self-employed retirement plans, such as those made through a SEP IRA or a Solo 401(k) plan for self-employed workers or contractors, are only some of the options available.
Q. How do I approach an upcoming tax bill in April?
It all comes back to planning. If you are addressing this situation today, work with professionals to project the amount needed.
From there, prioritize your liquidity needs and goals over the next few months while developing a payment plan.
This may require adjusting your budget and exploring creative repayment options, such as IRS installment plans, equity-based loans, etc.
– Eric Tomaszewski, Financial Advisor, Verde Capital Management
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