Diversifying a US retirement portfolio with digital assets is growing in popularity and a NAScent industry is emerging — cryptocurrency IRA and 401k providers. Bitcoin (available on Coinbase)IRA, CryptoIRA and BitIRA are some of the big names in the space but what exactly do they do?  
Providers like these are generally not a custodian, not a digital wallet nor are they an exchange, but they facilitate the purchase of cryptocurrency using funds in your existing IRA/401k into a new ‘crypto IRA account’ through the above-mentioned entities, acting as the middleman between them as a single point of contact for customers. Starting with the transfer of funds from your IRA to a custodian company (who helps to prepare statements and interacts with the IRS); they then submit your order to an exchange; and finally they store it in a cold wallet service of their choice.
How to add digital assets to your retirement funds
First you’ll need a self-directed IRA, which can be set up as a traditional IRA or as a Roth, and permits diversifying retirement assets beyond the usual stocks and bonds. These non-traditional investments include real estate, gold and silver and cryptocurrencies, among other assets. The vast majority of those investing in a standard Roth IRA for retirement use mutual funds, the manager of which then picks the allocation of your portfolio for you. With a self-directed IRA you are the manager of your funds, not a mutual fund manager like the majority of regular IRAs.
For tax purposes the IRS treats cryptocurrencies, such as Bitcoin (available on Coinbase), like stocks or real estate, and holders therefore benefit from the same tax advantages which can be simplified as: with traditional IRAs, you avoid taxes when you put the money in; with Roth IRAs, you avoid taxes when you take it out in retirement. So with a traditional IRA, instead of paying tax on the gains of the crypto investment, tax is paid only at a later date, and with a Roth IRA sometimes never at all leaving the crypto investment to grow unhindered without tax. (Source: Forbes)
Self-directed IRAs have to meet the same regulations as standard IRAs, meaning that investors generally cannot access the money within a Traditional IRA until they are 59½ years old (in a Roth you can access contributions, but not earnings). Earlier withdrawals will face penalties.
A quick comparison: Bitcoin (available on Coinbase)IRA vs BitIRA
Bitcoin (available on Coinbase)IRA claims to be the first company to offer the buying and holding of cryptocurrencies for retirement accounts, connecting consumers to qualified custodians, digital wallets and cryptocurrency exchanges. Through it, you can buy Bitcoin (available on Coinbase) (BTC), Bitcoin (available on Coinbase) Cash (BCH), Ethereum (available on Coinbase) (ETH), Ethereum (available on Coinbase) Classic (ETC), Litecoin (available on Coinbase) (LTC), and Ripple (available on Binance) (XRP).
To mitiGate the counterparty risk when buying cryptocurrencies in bulk the company offers a US$1 million Consumer Protection insurance policy that covers its clients on the transactional side from any internal cases of fraud or theft during the purchase process. However, after that, the storage of your assets is not insured and due to the long-term horizon of retirement accounts you would be forgiven for being paranoid about how secure your funds are from hackers.
For those who are concerned about the security of holding cryptocurrencies over the long-term, (who wouldn’t when it’s what’s going to fund your cruise ship years), BitIRA (not to be confused with Bitcoin (available on Coinbase)IRA) has come to the market with the world’s first fully-insured cold storage solution for Digital Currency IRAs, or ‘end-to-end’ insurance.
Unconventionally for digital asset companies, BitIRA comes from a conventional asset background, founded by the team at Birch Gold Group, a national dealer of physical gold and silver, and a leader in Precious Metals IRAs. It has the potential to be an interesting combination of the standards of old world gold being brought into the new digital gold era.
“The insurance from other companies simply covers their own liability should anything go wrong with the purchase. BitIRA, on the other hand, offers the only solution with insurance that is actually for the benefit of the customer,”says Jay Blaskey, digital currency specialist at BitIRA.
“The reality is that it’s not during the purchase that most hacks on cryptocurrencies have traditionally been attempted. BitIRA’s solution fully insures the assets in a Digital Currency IRA for the entire time that they are held in storage.” All assets held in storage are fully insured through an all-risk policy from Lloyd’s of London. Additionally, assets are protected during the transaction, against fraud or theft. The company’s digital currency offerings are Bitcoin (available on Coinbase), Bitcoin (available on Coinbase) Cash, Ethereum (available on Coinbase), Ethereum (available on Coinbase) Classic, Litecoin (available on Coinbase) and Ripple (available on Binance) and it has its own proprietary cold wallet solution.
Fees: In terms of their fee structures neither Bitcoin (available on Coinbase)IRA or BitIRA are specific, but similar to other retirement funds, clients can expect to pay an establishment fee — in addition to annual service and custodial fees.