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Crypto for Advisors: Bitcoin, IRAs and Tax Prep

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In today’s issue, Bryan Courchesne from DAIM explains how bitcoin can be included in U.S. Individual Retirement Accounts, what to watch out for, and the importance of working with a financial advisor.

Then, Eric Tomaszewski from Verde Capital Management shares tips on preparing for tax season in Ask and Expert.

Sarah Morton

You’re reading Crypto for Advisors, CoinDesk’s weekly newsletter that unpacks digital assets for financial advisors. Subscribe here to get it every Thursday.

Bitcoin Could Be On The Verge Of A Major Breakout: Is Your IRA Ready For The Opportunity?

Top researchers and very large investors are putting price targets on bitcoin that project it is potentially on the brink of a significant bull run. Tom Lee says bitcoin will be $250,000 this year, and Michael Saylor says bitcoin will get to $500,000 overnight.

Imagine having a substantial allocation of bitcoin in your retirement account before this bull run kicks into ultra-high gear – a tax-advantaged allocation funded by an old Individual Retirement Account (IRA) you may have forgotten about. The opportunity is right in front of you, but it’s essential to set it up the right way with a platform that offers comprehensive support and peace of mind.

Step 1: Self-Direct Your IRA Or Work With An Advisor

When investing in bitcoin through your IRA, security and compliance are paramount. A qualified custodian ensures your retirement assets are managed per IRS regulations, offering a layer of protection beyond simple wallet management. If you select a self-directed method, know it will be up to you to handle the transfer and make investment decisions. If you go with an advisor, they will handle the bulk of the transfer process for you, all the way through managing the portfolio.

Self-directing means you have to watch your investments, which are vulnerable to errors, fraud, or mismanagement. An advisor has done the due diligence on service providers and regularly monitors accounts for the best outcome.

Step 2: Set Up Your Tax-Advantaged Crypto IRA

Once you have chosen a self-directed platform or advisor, the next step is signing up, which involves executing and approving a client agreement. While the process is similar for both options, working with an advisor offers critical advantages. An advisor can help design a portfolio tailored to your risk profile, guide you in determining the appropriate position sizes relative to your other investments, and assist in implementing a long-term investment plan that aligns with your financial goals. In contrast, self-directed platforms don’t provide personalized guidance, don’t care what you buy, and are often incentivized to encourage frequent trading, which can erode your returns over time.

Additionally, setting up the correct IRA structure is crucial. For example, if you already have a Traditional IRA, you’ll need to open a new Traditional IRA with the crypto IRA provider to maintain consistency. Transferring assets can be complicated, especially if you’re unsure which investments to sell, how much to roll over, or how to track the transfer process. An advisor can guide you through these steps, handling much of the complexity and ensuring a smoother experience.

Step 3: Invest For Growth As The Crypto Sector Surges

As discussed above, a self-directed platform leaves you on your own to select investments, determine position sizes, and decide when to buy or sell. If you’re confident in your ability to outperform the market and manage these decisions independently, this approach might work for you – but it demands time, expertise, and discipline, with no safety net if mistakes are made.

In contrast, working with an advisor offers a distinct advantage. Advisors provide guidance tailored to your financial goals, help you select high-quality investments, and may offer pre-designed portfolios with proven track records. Rather than going it alone, you’ll gain access to a team of experts whose full-time job is managing digital assets and staying ahead of industry trends.

As many experts predict, the upcoming bitcoin bull run could drive prices well into six figures. By securing a bitcoin IRA today, you can position yourself to benefit from this potential growth while leveraging tax advantages and professional management to support long-term success.

Bryan Courchesne, CEO, DAIM

Ask an Expert

Q. It’s the beginning of a new year. What are some things I should consider so I can kickstart the year effectively?

It’s important to focus on systems more than goals. Goals will give you direction, while systems will create progress. Identify daily and weekly actions that will help you achieve larger goals, personally and professionally. From there, start small, repeat consistently, and tie new habits to existing ones to help you remember and reinforce.

Q. It’s 2025, so what strategies can I use for tax year 2024?

Fortunately, it is not too late to find tax deductions, as there is a range of options to consider. Traditional IRAs, Health Savings Accounts (HSAs), and self-employed retirement plan contributions – such as those made through a SEP IRA or Solo 401(k) plan for freelancers or contractors – are just some of the available options.

Q. How do I tackle an upcoming tax bill in April?

Everything comes back to planning. If you are addressing this situation today, work with professionals to project the needed amount.

From there, prioritize your liquidity needs and goals over the upcoming months while developing a payment plan.

This may require adjusting your budget and exploring creative payment options, such as IRS installment plans, securities-based lending, etc.

Eric Tomaszewski, Financial Advisor, Verde Capital Management

Keep Reading

President-elect Trump is set to host an inaugural crypto ball.

Will Meta’s board of directors consider a bitcoin strategic reserve after being asked by one of the company’s shareholders?

Italy’s largest bank, Intesa Sanpaolo, now owns bitcoin.

Bonus: CoinDesk released a new report, Digital Assets: Q4 Highlights & Commentary

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Coinbase Outpaces S&P 500 With 43% June Rise as Stablecoin Narrative Grows: CNBC

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Shares of Nasdaq-listed cryptocurrency exchange Coinbase (COIN) rose 43% this month, making the firm the top performer in the S&P 500 since it joined the index at the end of last month.

June’s run is already the stock’s best since November and caps three straight monthly gains. Coinbase’s shares reached their highest level since their public debut.

COIN hit a $382 high this week before enduring a slight correction, ending the week at $353 and seeing a slight 0.7% drop in after-hours trading to $351.

The wider S&P 500 index rose roughly 5% in June as geopolitical tensions eased.

Washington’s progress on the GENIUS Act, Congress’s first rulebook for dollar-pegged stablecoins, helped shift investor focus from trading fees to stablecoin revenue.

The bill brightened the outlook for Circle, whose shares hit a record high and saw its market cap near that of Coinbase this week.

Coinbase keeps all yield on USDC balances held on its platform and nearly half of other USDC income, equal to about 99 percent of Circle’s revenue, giving shareholders indirect exposure at no added cost, CNBC reported Friday, citing analysts including Citizens’ head of financial technology research Devin Ryan.

Trading, however, remains subdued. Average daily volume on Coinbase has drifted lower since April.

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Robinhood Launches Micro Bitcoin, Solana and XRP Futures Contracts

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Robinhood (HOOD) has introduced micro futures on bitcoin (BTC), solana (SOL) and XRP in the United States., expanding its existing crypto futures offering for its nearly 26 million funded accounts.

Micro contracts need far less collateral than full-size futures, letting traders take directional positions while committing a smaller slice of capital.

The contracts offer traders more flexibility to bet on a cryptocurrency’s future price direction or hedge current positions given their smaller size.

The launch rounds out a futures suite that began with BTC and ETH in January. It also comes weeks after the firm closed its $200 million purchase of Bitstamp and finalized a $179 million deal for Canada’s WonderFi.

Robinhood’s data shows that crypto notional volumes have exploded upward over time, reaching $11.7 billion in May. The figure marks a 36% rise month-over-month, and a 65% growth year-over-year.

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Why is XRP Up Today? Trio of Catalysts Sees Token Outperform Wider Crypto Market

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XRP climbed 5.5% to $2.19 in the last 24 hours after a trio of catalysts converged to help the cryptocurrency outperform the wider cryptocurrency market.

One of the catalysts was launch of XRP micro futures on Robinhood. The contracts offer traders more flexibility to bet on the cryptocurrency’s future price direction or hedge current positions given their smaller size.

Regulatory fog also thinned. On Friday, Ripple withdrew its cross-appeal in its long-running U.S. Securities and Exchange Commission (SEC) lawsuit. The SEC sued Ripple back in 2020 over its XRP sales, alleging these violated securities laws. The SEC is expected to drop its own appeal, leaving last year’s ruling, ordering Ripple to pay a $125 million civil penalty to the SEC, intact. The move could lift a lid that had kept some investors on the sidelines.

On-chain data rounded out the bullish setup. The XRP Ledger logged over a 1.1 million active addresses over the past week according to crypto analyst Ali Martinez, who cited Glassnode data.

XRP’s rise saw it outperform the wider crypto market, with the broader CoinDesk 20 (CD20) index rising 1.7% in the last 24 hours.

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