How to Invest in Crypto via Retirement Accounts

How to Invest in Crypto via Retirement Accounts

What is a Retirement Account?

A retirement account is an investment account that allows people to invest a portion or all of their savings into a risk-managed asset class. In this manner, when people take a retirement they are bound to have funds in their retirement account.

Retirement accounts are usually savings that allow a person to combat the continued inflation and possible devaluation of their savings.

Types of Retirement Accounts

Here are three basic types of retirement accounts:


401(K) retirement account is a type of retirement account that is offered by employers. It offers tax-advantages to the employees. A predetermined portion of their investment is automatically deducted from their paycheck and sent to the investment account.


Individual Retirement Account (IRA) is a type of retirement account where investors pay taxes after they start to withdraw their investments. IRAs are not managed by employers but controlled by the account holders unlike 401(k).


Guaranteed Income Annuities (GIAs) are the type of investment accounts that are offered by insurance companies. It is a type of account that provides fixed monthly income guaranteed for life based on pension fund. The fund holder gets extra income based on the performance of their investments.

Retirement Funds in Cryptocurrency

A survey conducted by Investopedia retains that one out of four millennials use cryptocurrencies to fund their retirement accounts. Investors can also access crypto retirement account options from Grayscale for retail and institutional investors.

Here are some types of cryptocurrency retirement account options that investors can access:

Traditional IRA

Grayscale allows investors to add cryptocurrency exposure to their IRA investments. The investors can access the option by typing the Grayscale ticket when accessing services of brokers such as Schwab and Fidelity.

The most used option of the service is GBTC or Grayscale Bitcoin Trust valued at a market cap of $20 billion as of last year. However, investors may also add other crypto investment options such as Grayscale Ethereum Trust (ETHE), Grayscale Litecoin Trust (LTCN), and Grayscale Digital Large Cap Fund (GDLC). 

Investors may add cryptocurrencies with largest market caps in their retirement accounts by accessing this option. It is important to note that traditional IRA accounts are tax-advantaged meaning that taxes become applicable when investor decide to make a withdrawal from their accounts.

At the same time, Grayscale continues to add more digital currencies in its suite of funds allowing investors to gain exposure to products such as metaverse, smart contract networks, and DeFi platforms.

Roth IRA

Roth IRAs are tax-deferred retirement accounts meaning that the taxes on their savings are deducted before adding to the retirement fund. It means that investors do not have to pay any taxes on their investments when they make withdrawals in the future.

Investors can access all the aforementioned crypto investment options from Grayscale for their Roth IRA retirement accounts as well.

However, in most cases people opt for a traditional IRA account based on the fact that active salaries individuals have higher tax obligations in comparison to retired individuals. Nevertheless, the investors must ascertain for their local jurisdiction if the tax rates are higher at present or later.

In this manner, investors can make the best decisions for adding cryptocurrencies to their preferred type of cryptocurrency investment accounts.

Is Adding Crypto to a Retirement Account a Safe Option?

Most investors are concerned about intrinsic price volatility of cryptocurrencies. But when it comes to investing diversification is always a good idea. Most investors go for 60/40 stock to bond ratio in their retirement accounts. Individuals with spare income further allocate their savings with ETFs, real estate, and commodities etc. 

A recent paper published in the Economist suggests that adding a small portion of cryptocurrencies such as Bitcoin in the retirement account is a good decision.

The paper quotes the Markowitz portfolio theory to suggest that cryptocurrencies are stable investment options based on their utility and integration in upcoming tech projects such as web 3.0 etc. For context, Markowitz model claims that diversification mitigates investment risks.


Blockchain technology is accessed and implemented in all aspects of life and is active in various professional disciplines. It is not possible for investors to create stakes in thousands of virtual coins but investors can diversify their retirement accounts with a small amount of digital currencies investments.

Richard Dodson
About Author

Richard Dodson

Richard Dodson, a titan in crypto journalism, delves deep into the blockchain ecosystem with clarity and precision. With an innate ability to simplify intricate details, Richard's articles demystify the world of digital assets. His authoritative voice and profound insights make him a go-to expert in cryptocurrency discourse.

Leave a Reply

Your email address will not be published. Required fields are marked *

Skip to content