Buying Bitcoin In Your IRA: Which Route to Take and Why

Kim Snider  |

Bitcoin has made big strides recently toward mainstream adoption, including a new way to buy Bitcoin in your IRA.

This is important because more adoption means more money flowing into the asset class.

More money flowing in means higher prices.

Up until recently, you only had two options for owning Bitcoin in your IRA:

  1. Open a self-directed IRA and hold Bitcoin directly
  2. Buy Greyscale Unit Investment Trust (GBTC) in your IRA through traditional brokerage account

The pros and cons of a self-directed IRA

As a general rule, if the amount you are going to be investing is sizable, my personal preference is to set up a self-directed IRA and own the cryptoassets directly.

The upside of the self-directed IRA approach is more control, lower fees and less counter-party risk.

The downside is you will spend some money to set this structure up. And it is a pain.

It involves setting up an LLC and bank account, multiple asset transfers, annual reporting of your balances to the custodian, etc.

So, it’s not worth it if you are just investing a few thousand dollars.

Why GBTC is not ideal

On the other hand, chances are you can go to your IRA at most traditional brokerage firms and buy  (GBTC)today.

The thing I really, really dislike about GBTC is that it trades at a significant premium to Bitcoin… on average 42%.

And the price does not necessarily move exactly with Bitcoin. So, if I buy Bitcoin directly, I can buy 42% more Bitcoin with a dollar than I can buying GBTC. And there are annual fees of 2%, brokerage commissions, etc.

But, for smaller investments in a retirement account, up until now, that has really been the only option.

Now there is a third option… the Bitcoin Tracker One ETN (CXBTF)

As of recently, the Bitcoin Tracker One ETN (CXBTF), which trades on the Swedish exchange, is now available, on a very limited basis, here in the United States.

I would prefer to use the ETN, over GBTC, because it does not trade at a premium.

1 share equals .005 Bitcoin and should capture something very close to the return of Bitcoin less the fees.

Fidelity embraces cryptocurrency

Unfortunately, for now, the only mainstream brokerage firm I know of that offers it is Fidelity.

I have heard a rumor that E*trade does but I haven’t been able to confirm that.

Would I transfer all or some of my IRA to Fidelity to be able to buy CXBTF? If I was going the mainstream brokerage route, I would.

We know Fidelity is working on other crypto projects. And I predict it will be the first brokerage to allow the trading of cryptocurrencies directly.

The threat to GBTC

I personally believe CXBTF is a serious threat to GBTC, once it is more widely available.

I am not sure why, all things being equal, anyone would choose GBTC over the Tracker One ETN.

My concern, for those who own GBTC, is that as the ETN is more widely available and ETFs are approved all of the premium will bleed out of GBTC.

It would be similar to a traditional out-of-the-money option that slowly loses time premium even though the price of the underlying didn’t change.

The only reason for that premium to exist was that it was the only game in town. That is now less and less the case.

To summarize …

  1. My preference for large dollar amounts is a self-directed IRA but it is a royal pain to set up. (BTW, you can pay people to do that for you)
  2. In a mainstream brokerage IRA, your best option is the newly available Bitcoin Tracker One ETN (CXBTF). But it is limited to one or two brokerage firms for now.
  3. I think there is a possibility GBTC loses some or all of its premium as demand for the product recedes.

As always, something for you to consider. Hope it helps.

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If you’d like to learn more about investing in cryptocurrency for retirement, I would encourage you to register for my free online training, How A Little, Little Bit of Bitcoin Can Make Your Retirement Savings Go A Lot, Lot Further.

If you have any questions at all, about this topic, or anything else, just email me at I read and answer every email personally. Or leave it in the comments below.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


Symbol Name Price Change % Volume
GBTC Bitcoin Investment Trust 10.17 -0.23 -2.21 2,509,099



Symbol Last Price Change % Change










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