How does a Bitcoin IRA work?
A Bitcoin IRA is not an official IRS account type; it’s an informal term for a self-directed Traditional or Roth IRA that is able to hold actual bitcoin.
This guide explains what you can expect from our new Bitcoin IRA. Join the waitlist below to be notified when it launches.
What is a Bitcoin IRA?
It is a self-directed IRA that is designed to hold real bitcoin.
Think of it as two layers: the IRA determines the account’s tax treatment, while bitcoin is the asset held inside it.
A Bitcoin IRA needs a qualified custodian that supports bitcoin. Most IRAs are limited to conventional investments only.
How a Bitcoin IRA works, step by step
You choose the account, fund it and direct the purchases. Bitcoin stays inside the retirement-account structure.
Choose your IRA type
Decide whether you are opening a Traditional or Roth IRA. The account type determines the tax treatment, not the fact that it holds bitcoin.
Open the account
Submit an application and wait for approval from the IRA administrator; review the IRA and custody agreements.
Fund your IRA
Add an eligible cash contribution, arrange an IRA transfer, or roll over eligible workplace retirement savings. These are separate funding paths with different rules.
Buy bitcoin inside the IRA
Use our platform to direct a purchase with IRA funds. The bitcoin is purchased and held within the retirement account.
Keep your bitcoin in the IRA structure
Bitcoin stays within the account’s custody arrangement. Future sales, transfers and distributions must follow the account procedures and IRA rules.
Your retirement account. Your bitcoin.
With a Bitcoin IRA, actual bitcoin is held inside your retirement account. You decide when and how much to buy, while the account administration and bitcoin custody are handled by specialized providers.
You
Choose when to buy bitcoin and name your beneficiaries.
Bitcoin Well
The platform for buying and holding bitcoin in your retirement account.
Heritage IRA
The IRA administrator, handling account setup, recordkeeping and other IRA compliance.
BitGo
The institutional bitcoin custodian, safeguarding bitcoin held within the IRA.
Can you self-custody in a Bitcoin IRA?
Generally, no. Bitcoin held in an IRA is typically kept with a custodian rather than in a wallet where you personally control the private keys.
Self-custody is central to Bitcoin Well’s mission and ethos, but retirement accounts operate differently. A custodian is required to remain compliant.
Traditional vs. Roth Bitcoin IRA
Both account types can hold bitcoin. The main difference is when you pay taxes.
Traditional: tax-deferred
Contributions may be deductible, depending on your income and workplace retirement plan. Earnings grow tax-deferred, and taxable withdrawals are generally treated as ordinary income. Required minimum distributions (RMDs) apply.
Roth: after-tax contributions
Contributions are not deductible, and income limits apply to direct contributions. Qualified withdrawals are generally free from federal income tax, and the original owner has no lifetime required minimum distributions.
A qualified Roth IRA withdrawal generally requires meeting the five-year rule plus a qualifying condition, such as reaching age 59½.
How do you fund a Bitcoin IRA?
You can fund a Bitcoin IRA with new contributions, transfers from another IRA, or eligible rollovers from a workplace retirement plan.
Annual contributions
Contribute eligible cash for the tax year, up to the annual IRA limit.
401(k) rollovers
Eligible funds from a 401(k) or other workplace retirement plan can be rolled into an IRA.
IRA-to-IRA transfers
Move retirement assets directly from one IRA provider to another.
Transfers and rollovers do not use your normal annual IRA contribution allowance. Moving pre-tax retirement funds into a Roth IRA is generally taxable as a Roth conversion.
Bitcoin IRA contribution limits for 2026
Under age 50
$7,500Annual limit for 2026
Age 50 or older
$8,600Including the catch-up contribution
These limits apply across your Traditional and Roth IRAs combined, not to each account separately. Your contribution also cannot exceed your eligible compensation for the year.
Roth IRA income limits can reduce or eliminate your ability to contribute directly. Traditional IRA income rules can affect whether your contribution is deductible. Rollovers and transfers do not count toward these annual contribution limits.
How is bitcoin taxed in an IRA?
Bitcoin held inside an IRA follows the tax rules of the retirement account rather than the tax treatment of bitcoin you hold personally.
Outside an IRA
Bitcoin is treated as property for federal tax purposes. Selling, exchanging or spending it can create a capital gain or loss based on your cost basis.
Inside an IRA
Buying and selling bitcoin within the IRA does not create a personal capital-gains tax event each time you transact. Instead, taxes generally depend on the type of IRA and how funds are eventually withdrawn.
Before opening a Bitcoin IRA
Your main considerations before opening an account:
- Account type: Traditional IRA or Roth IRA
- Funding: Cash, IRA transfer, 401(k) rollover
- Eligibility: Rollovers, income rules, contribution limits
- Taxes: Contributions, conversions, withdrawals
These choices can have different tax and retirement implications depending on your situation, so they’re worth reviewing with a qualified tax or financial professional.
Frequently asked questions
Hold actual bitcoin in your retirement account
Bitcoin Well is building a Bitcoin IRA with Traditional and Roth options, Heritage IRA administration and BitGo custody.
Explore the planned product and join the waitlist for launch updates.
Bitcoin Well does not provide tax, legal, or investment advice. Information on this page is provided for general educational purposes only and is not a recommendation to open, fund, convert, or roll over an IRA. IRA eligibility, contribution limits, rollover options, and tax treatment depend on individual circumstances and applicable rules. Consult a qualified tax, legal, or financial professional regarding your situation.
This overview addresses US federal IRA rules and is not a complete statement of the law. State tax treatment may differ. Tax laws, annual limits, eligibility and provider terms can change. Deductions, conversions, rollovers and distributions have different requirements; early or nonqualified withdrawals and prohibited transactions can trigger taxes, penalties or loss of IRA tax status.
Bitcoin is volatile and can lose substantial value. An IRA does not eliminate investment, custody, counterparty or liquidity risk. Bitcoin is not FDIC insured or SIPC protected. Any private insurance is governed by its policy terms and does not cover market losses. Bitcoin Well’s IRA is an upcoming product; final availability, fees, account terms and supported transactions are governed by the product and provider documentation.