Spot BTC ETF in your Roth IRA ? \ stacker news ~Personal

2231 sats \ 21 comments \ @Anonymous_Hodler 21 Jan Personal_Finance

Hello fellow bitcoiners,

As everybody knows, the SEC gave a go to these 11 spot Bitcoin ETF’s about 2 weeks ago, allowing investors to allocate a part of their portfolio to gain exposure to BTC prices. Trying to stay humble and listen to smart and wise people, I keep hearing that owning ETF and owning BTC is different and that nothing will ever be as good as owning BTC and self custody it.

I also hear that any good investor should take advantage of tax deferred / tax free plans like IRA’s.

As of my knowledge ( and correct me if I am wrong) , you can’t own and self-custody bitcoin inside these IRA’s.

So if you want exposure to bitcoin in your retirement account, you haav to find an alternate way. The ones I could of were:

Getting exposure through the stock market via mining companies like Marathon or even Microstrategies
Getting exposure to btc prices through the famous ETF. ( and accept that these products have a yearly fee that takes away part of your investment over time..)

So my questions to you guys are : Should you get exposure to bitcoin in your IRA ? If yes, would it be wiser to allocate some funds into spot btc ETF or btc exposed companies or both…?

Also, please let me know if I forgot options or strategies I would not be aware of…

In advance, thank you so much for your honest feedback…

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54 sats \ 6 replies \ @stacksatstoday 22 Jan

I do get exposure to BTC ETFs, Microstrategy, and miners. I trade these vehicles in my Roth IRA and 401k. Love trading options on miners and Microstrategy. While this isn't for everyone I have a background in trading options, so why wouldn't I use that knowledge and grow my retirement accounts.

This has nothing to do with my DCA of real BTC.

0 sats \ 2 replies \ @gmd 22 Jan

curious were you able to sell your MSTR bag right before the ETF dump or are you HODLing

119 sats \ 1 reply \ @stacksatstoday 22 Jan

I bought a put and sold a call...It's called a collar trade. I use the call proceeds to help pay for the put. Worked nicely especially since I didn't know what was going to happen. Will continue holding MSTR. It's at a discount now.

99 sats \ 0 replies \ @Anonymous_Hodler OP 22 Jan

Interesting never heard of that, i will dig the idea :) thank yoh

0 sats \ 2 replies \ @Anonymous_Hodler OP 22 Jan

Thanks for your feedback… I am just about to fet started with selling covered calls… if you have any tips and insights, i’d take them!

10 sats \ 1 reply \ @stacksatstoday 22 Jan

Before trading anything please learn as much as you can first. Then start with a small amount of money. You will make mistakes and that's ok and perfectly normal.

If interested I could go over some information if that would help the community?

0 sats \ 0 replies \ @Anonymous_Hodler OP 22 Jan

I would definitly be interested… i was thinking of starting with a covered call with MARA since it would cost less to get a 100 stack…

31 sats \ 4 replies \ @hodlpleb 21 Jan

You can self custody BTC in an IRA, but there are a ton of hoops to jump through. Basically have to open a business and run the IRA through that business.

You can have BTC in an IRA through Swan or other services.

You could also just buy the bitcoin yourself, knowing you may be taxed on the gains if you ever sell (which, in my opinion, you should never need to sell)

0 sats \ 3 replies \ @Anonymous_Hodler OP 21 Jan

Thank you for you quick feedback @hodlpleb ! I didn’t know owning was an option inside an IRA, that opens a few options for sure. Of course you can buy btc yourself, but I was focusing on the portion of your portfolio that should be held in a retirement tax efficient plan. So I guess now my question will be: ETF / Mining stocks / BTC directly ( with swan maybe but need more information about would custodies the btc in these plans, hot or cold custody as well…) Once again thank you…

30 sats \ 2 replies \ @porterbitcoin 21 Jan

what the other guy said isn’t true.

You can get an Unchained IRA which lets you control your keys and Unchained handles all the complexity: unchained.com/ira

1 sat \ 0 replies \ @hodlpleb 21 Jan

Thanks for the addition. I will look into this.

1 sat \ 0 replies \ @Anonymous_Hodler OP 21 Jan

I will definitly have a look at that option… thank you for your very valuable input @porterbitcoin 👍🏻

10 sats \ 5 replies \ @nullcount 22 Jan

ROTH IRA may not be the "ultimate tax hack" you think it is.

Suppose you have $1000 to invest and your portfolio appreciates 10x and the tax rate is 20%.

In a ROTH IRA, your money is taxed when it is invested. So you invest $800 (after paying $200 in tax) which becomes $8000 after the 10x. You managed to turn $1k into $8k for a gain of $7k.

In a traditional IRA, your money is taxed when you widthdraw. So you invest $1000 which becomes $10,000 after the 10x. Then you pay 2k in tax to withdraw. You managed to turn $1k into $8k for $7k gains.

Your gains are the same either way. In the ROTH, you paid less tax to the state, but by paying tax "early", the state has interrupted your compounding.

Additionally, ROTH IRAs have strings attached like maximum contributions limits, inability to self custody, and inability (or increased interest rates) to borrow against before retirement.

The choice of whether to go ROTH or traditional is more of a bet on what you think the tax rate will be when you retire. If you think taxes will be higher in the future, go ROTH.

15 sats \ 0 replies \ @aoeu 22 Jan

One benefit of the Roth over a traditional is for higher income earners. Once you reach a certain income threshold, you no longer qualify for a tax benefit upfront. And, if you leave it in the traditional instead of converting to a Roth, you'll also pay taxes when you withdraw.

So the choice is pay taxes upfront and on withdraw with a traditional IRA vs pay taxes only upfront with a Roth IRA.

Also, traditional and Roth IRAs have the same contribution limits.

66 sats \ 3 replies \ @Anonymous_Hodler OP 22 Jan

Thank you for this feedback @nullcount ! I agree with you classic or roth depends on your views on what could happen in the future… My intuition is that the future for fiat economy isn’t really bright and I could totally see an increase in taxes to pretend our government is trying to do something about this evergrowing debt… would would think taxes would decrease in the future? The only way to decrease it would be debasing money even more to give the impression that taxes decrease. So one way or the other, we might be screwed, so instead of gambling on the future, i made the choice to control the taxes upfront ( and crossing my fingers the actual rules won’t change about these IRA’s 🤣)

Anyway, I very much appreciate your contribution my friend

43 sats \ 2 replies \ @nullcount 22 Jan

Maybe consider a traditional IRA in addition to ROTH. So you can borrow against, and self custody sats, art, or anything you want in the traditional IRA account.

The real tax hack is to start an LLC or Corp and create a self-funded 401(k). It works like a traditional IRA except you "the employer" pay no tax on any matching contributions made to you "the employee".

0 sats \ 1 reply \ @Anonymous_Hodler OP 22 Jan

I am thinking of creating my company at some point in the future… but it is not my priority at that point of my life… I thought you couldn t have both IRAs and the aggregate contribution pass the limit… 🤔

0 sats \ 0 replies \ @nullcount 22 Jan

You're correct about the contribution limits applying to both. I thought that ROTH was the only one with contribution limits for some reason. I'm not an expert lol

10 sats \ 1 reply \ @TNStacker 21 Jan

You can set up an IRA with Swan. Use my referral link:

https://www.swanbitcoin.com/tennessee-stacker/

21 sats \ 0 replies \ @Anonymous_Hodler OP 21 Jan

Hello and thank you @TNStacker ! I am a regular of swan videos, podcast and educational content. I will use my afternoon to browse more information about their IRA and other options. I should habe done that earlier actually… Thank you for your referral as well, I might use it :)

0 sats \ 0 replies \ @NOV 22 Jan

2nd for Unchained!