If you’re a little unsure what a Bitcoin IRA custodian’s role is, simply continue reading to discover everything you need to know about Bitcoin IRA custodians and their responsibilities.
What you need to know about Bitcoin IRA custodians:
- It’s currently mandatory to hire a Bitcoin IRA custodian
While you may choose to set up a self-styled Bitcoin IRA account, doing so will not get you out of having to hire an IRA custodian as all investors are required by federal law to hire a custodian. The primary reason why it’s compulsory to hire a Bitcoin custodian is to ensure that you fulfill all of your tax obligations to the IRS.
- Each custodian will offer a slightly different range of services
Some custodians will be able to give you advice on when the best times are to make contributions to your Bitcoin IRA account, which is particularly useful if your knowledge on Bitcoin is rather limited. Other custodians may even be able to purchase Bitcoin on your behalf, when the time is right, to make sure that you don’t miss out on purchasing Bitcoin at a competitive price.
So before choosing a custodian, it’s imperative to ask each custodian which you’re interested in hiring about their range of services. If there’s a particular service which you’d like your custodian to offer, it’s well worth asking a potential custodian if they have experience providing the service, which you’re interested in.
- Bitcoin custodians services will vary greatly in price, so it’s well worth shopping around
Most custodians will charge you maintenance fees, for taking care of your Bitcoin IRA account, while only a proportion of custodians will charge commission fees on the investments which you make. If you’re looking for superb value for money, you may want to avoid custodians who charge commission based fees on top of transaction and maintenance fees as custodians who receive a percentage based commission may try to convince you to invest more money than you’re comfortable contributing to your account.
As an example, if Bitcoin’s price rises and your custodian gets paid based on commission, they may push you to increase your investment, even though you’d be better off waiting until Bitcoin’s price dropped slightly.
If you’re unhappy with the fees which the first custodian whose website you visit offers, don’t be afraid to shop around for a better deal, which you’re more comfortable with!
- Bitcoin custodians should be able to ensure that you’ll pay the lowest price possible
Bitcoin custodians will constantly check Bitcoin prices so that you won’t have to. That way, when Bitcoin’s price temporarily decreases, they’ll be able to use the capital which you’ve entrusted them with, in order to purchase Bitcoin at the lowest price possible. As an added benefit, your chosen Bitcoin custodian will make sure that you don’t pay tax on your contributions to your Bitcoin IRA account.
Hopefully, after reading the Bitcoin IRA custodian guide above, you have a clear idea of the unique responsibilities of Bitcoin custodians.
Is the future in Bitcoin?
Quite possibly. Is probably the most widely recognized cryptocurrency, but there are, of course, many other versions too. Wallet apps for these currencies are some of the most popular on the different marketplaces today. People love the decentralized nature of the platforms and they love the fact that it is open source. They believe that it is about time that people trust in each other again, instead of having a centralized system control everything, not in the least because nobody trusts these centralized systems anymore.
Some things to remember…
The key points to be aware of if you are considering getting into cryptocurrency yourself:
- You get cryptocurrency by mining for them.
- In order to mine, you need very powerful computers that are able to solve highly complex mathematical problems. You can do this by buying your own machines, or you can take on a cloud mining contract and keep your costs down to a degree.
- As more coins are mined, the mathematical problems become greater, thereby slowing down production.
- Miners are having to compete with each other in an increasingly complex environment and this makes profit mining very difficult.
Clearly, the cryptocurrency could potentially change everything that we do. It will show us new ways of communicating, new ways of banking. We can manage our assets in previously unthinkable manners. Indeed, the only limitation is our own imagination! Thousands of people are interested in this system and are willing to give up their time to be real change agents. Naturally, banks are very worried about this. But perhaps it is time for them to relinquish the control they have had over the world for hundreds, if not thousands of years, and allow people to have the power once again.
