Crypto IRA: how it works, what it costs, what it can hold

What is a crypto IRA?

The statute defines an IRA as a trust set up in the United States for the exclusive benefit of one person [1]. It does not list what the trust may buy. It says contributions must be cash unless they are rollovers [1], so crypto cannot be contributed in kind. The coins are bought inside the account, after cash goes in.

The trustee is the part that decides whether crypto is possible. The IRS says the trustee or custodian must be a bank, a federally insured credit union, a savings and loan association, or an entity the IRS approves for the job [3]. A “crypto IRA” is a trustee in that set that agrees to hold crypto, plus a platform in front of it. For federal tax purposes virtual currency is property [5], and an IRA holds property.

Traditional or Roth?

The two account types differ on when the tax is paid. The table is the whole difference; the rest of the mechanics are the same.

	Traditional IRA	Roth IRA
Contribution	Deductible if income and plan coverage allow [3]	Never deductible [3]
2026 limit	$7,500, or $8,600 at 50 or older [3] [6]	Same limit, shared across both [3]
Growth	Not taxed inside the account	Not taxed inside the account
Withdrawal	Taxable in the year received [4]	Not taxed if qualified [4]
Early withdrawal	10% additional tax before 59½, with exceptions [4]	Earnings may owe the 10% before 59½ [4]
Required distributions	Begin by April 1 after the year of turning 73 [4]	None for the owner

The Roth guide covers the Roth’s two five-year clocks and the income phase-out. Everything below applies to both types.

The two ways to hold crypto in an IRA

A self-directed custodian that holds coins

The account is an IRA at a trust company. The platform in front of it takes orders, and the custodian holds the coins with a storage provider. The owner directs the trades and never takes the keys. That last point matters for the prohibited-transaction rules below.

A spot bitcoin ETF inside a brokerage IRA

A spot bitcoin ETF is a fund share. Any IRA at a brokerage can buy fund shares, so no special custodian is needed. The account holds a security, not a coin, and the fund holds the bitcoin. A covered-call bitcoin fund is a fund share too, and inside a traditional IRA every dollar it pays out arrives as an ordinary distribution [4]; the ETF income calculator has an IRA mode that shows what that erases.

Neither way is the “right” one. The first gives direct exposure to a coin and a fee schedule set by one company. The second gives fund exposure at a brokerage’s fee schedule and the fund’s expense ratio.

What does a custodian charge?

The only source for a custodian’s fees is the custodian’s own page, dated. Here is what iTrustCapital’s pricing page states, as fetched on 2026-09-02 [7]. It lists $0 for monthly and annual fees, $0 startup fees, $0 exit fees, $0 storage fees, $0 transfer fees, and $0 maintenance fees [7]. It says IRA custodial services are offered by iTrust Custodial Services and Fortis Bank, and that customers do not get a choice of custody partner [7].

Three facts on that page are not verified here. The per-trade percentage for crypto is drawn by the browser and is not in the page as served, so this guide prints no rate. The minimum and maximum per account, and the full list of assets held, are answers to questions the page shows without their text. Those are “not verified” here until a page states them in text.

The page also says fees are subject to change and that the current schedule lives inside the platform [7]. A fee read from a review site is a fee nobody stated. A fee read from the custodian’s page is a fee stated on that date, and the date is printed beside it.

What is a prohibited transaction?

The statute names the transactions an IRA cannot enter with a disqualified person: a sale, exchange, or lease of property; a loan or extension of credit; furnishing goods, services, or facilities; and any transfer or use of the account’s assets for that person’s benefit [2]. A fiduciary who deals with the account’s assets in their own interest is caught too [2]. A disqualified person includes a fiduciary and a member of the fiduciary’s family, which the statute defines as a spouse, ancestor, lineal descendant, and any spouse of a lineal descendant [2].

For a self-directed account the owner is the one directing the trades. In plain words: the IRA cannot buy coins from its owner, sell coins to its owner, lend to its owner, or pay for anything the owner uses. Taking the keys into a personal wallet is the shape to avoid, because use of the assets for the owner’s benefit is on the list [2].

The cost is not a fine on the transaction. If the owner engages in a prohibited transaction, the account stops being an IRA as of the first day of that tax year [1]. Separately, the statute taxes the disqualified person 15 percent of the amount involved for each year, and 100 percent if the transaction is not corrected in time [2].

There is one more limit that does not apply to crypto by its terms. An IRA that acquires a collectible is treated as having distributed its cost, and the statute lists what a collectible is: a work of art, a rug or antique, a metal or gem, a stamp or coin, an alcoholic beverage, or other tangible personal property the Treasury names [1]. Virtual currency is property [5], and this site has found no IRS document that puts it on that list.

What happens on withdrawal?

From a traditional IRA, distributions are taxable in the year received [4]. A withdrawal before 59½ may also owe the 10% additional tax on early distributions unless an exception applies [4]. Required minimum distributions must begin by April 1 of the year after the year the owner turns 73 [4]. The coin’s gain, the fund’s return of capital, and the option premium all leave as one kind of income.

From a Roth IRA, a qualified distribution is not taxed, and the Roth guide says what qualified means. A distribution of coins in kind is still a distribution: the amount is the coins’ value on the day they leave, and the same rules apply.