In today’s edition, DAIM’s Bryan Courchesne explains how bitcoin can be included in US individual retirement accounts, what to watch out for and the importance of working with a financial advisor.
Then Eric Tomaszewski of Verde Capital Management shares tips on preparing for tax season in Ask and Expert.
–Sarah Morton
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Bitcoin Could Be On The Verge Of A Major Breakout: Is Your IRA Ready For The Opportunity?
Top researchers and very large investors are setting price targets on bitcoin that estimate it is potentially on the verge of a significant bull run. Tom Lee says bitcoin will be $250,000 this year and Michael Saylor says bitcoin will hit $500,000 overnight.
Imagine having a sizable allocation of bitcoin in your retirement account before this bull run kicks into ultra-high gear—a tax-advantaged allocation funded by an old Individual Retirement Account (IRA) you may have forgotten about. The opportunity is right in front of you, but it’s important to set it up the right way with a platform that offers comprehensive support and peace of mind.
Step 1: Self-manage your IRA 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 choose a self-directed method, know that it will be up to you to manage the transfer and make investment decisions. If you go with an advisor, they will handle the bulk of the transfer process for you, all the way through managing the portfolio.
Self-management means keeping an eye on your investments, which are vulnerable to error, fraud or mismanagement. An advisor has done due diligence on service providers and regularly monitors accounts for best results.
Step 2: Set up your tax-advantaged crypto IRA
Once you’ve chosen a self-managed platform or advisor, the next step is registration, which involves executing and approving a client agreement. While the process is similar for both options, working with an advisor offers important benefits. An advisor can help design a portfolio tailored to your risk profile, guide you in determining the appropriate position sizes relative to your other investments, and help implement a long-term investment plan that aligns with your financial goals. In contrast, self-managed platforms don’t provide personalized guidance, don’t care what you buy, and are often incentivized to encourage frequent trading, which can erode your returns over time.
Additionally, setting up the correct IRA structure is critical. For example, if you already have a traditional IRA, open a new traditional IRA with the crypto-IRA provider to maintain consistency. Transferring assets can be complicated, especially if you’re unsure of which investments to sell, how much to roll over, 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 discussed above, a self-managed platform leaves you to choose 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 may work for you – but it requires time, expertise and discipline with no safety net if mistakes are made.
In contrast, 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 pre-designed portfolios with proven track records. Instead of going it alone, you get access to a team of experts whose full-time job is to manage digital assets and stay ahead of industry trends.
As many experts predict, the upcoming bitcoin bull run could push prices into six figures. By securing a bitcoin IRA today, you can position yourself to take advantage of this potential growth while leveraging tax advantages and professional management to support long-term success.
– Bryan Courchesne, CEO, DAIM
Ask an expert
Q. It’s the beginning of a new year. What are some things I should consider so I can kick-start the year effectively?
It is important to focus on systems more than goals. Goals will give you direction, while systems will create progress. Identify daily and weekly actions that will help you achieve bigger goals, personally and professionally. From there, start small, repeat consistently, and tie new habits to existing ones to help you remember and reinforce.
Q. It’s 2025, so what strategies can I use for the 2024 tax year?
Fortunately, it is not too late to find tax credits, as there are a number of options to consider. Traditional IRAs, Health Savings Accounts (HSAs), and contributions to self-employment retirement plans — such as those made through a SEP IRA or Solo 401(k) plan for freelancers or contractors — are just a few of the options available.
Q. How do I tackle an upcoming tax bill in April?
It all comes back to planning. If you are solving this situation today, you need to work with professionals to project the necessary amount.
From there, prioritize your cash flow needs and goals over the coming months while developing a payment plan.
This may require adjusting your budget and exploring creative payment options, such as IRS installment plans, securities-based lending, etc.
– Eric Tomaszewski, Financial Advisor, Verde Capital Management
