Bitcoin Ira Launches Crypto Retirement Accounts Insured For $100M, Courtesy Of Bitgo (#GotBitcoin?)
Bitcoin IRA, a company that specialises in offering crypto for individual retirement accounts (IRAs), has struck a partnership with custodian BitGo Trust that will offer clients the optionality to have their accounts insured by the custodian firm. Bitcoin Ira Launches Crypto Retirement Accounts Insured For $100M, Courtesy Of Bitgo (#GotBitcoin?)
The move will see each new Bitcoin IRA account covered by default against theft or loss of cryptographic keys, the two firms announced on Tuesday. There are no additional charges to use BitGo Trust as a cold-wallet custodian and to have the $100 million insurance policy, Bitcoin IRA told The Block.
The firm told The Block it hopes the move will trigger mainstream adoption of digital assets and its services, highlighting that the new account meets clients’ expectations of having something akin to Federal Deposit Insurance Corporation insurance. But unlike FDIC insurance, BitGo’s insurance is limited to $100 million annually for all of Bitcoin IRA’s accounts. Therefore if one single Bitcoin IRA account blows through the $100 million insurance, that is all that would be covered.
Since 2016, Bitcoin IRA has reportedly processed over $350 million in digital asset transactions for self-directed retirement accounts. The firm says it caters for around 4500 retail clients who wish to make digital assets part of their tax-free retirement investment strategy, offering 9 different cryptocurrencies. Custody-giant BitGo meanwhile only currently targets institutional investors, meaning the partnership now gives the business line a significant amount of new retail exposure.
Lower Costs, Less Risk
When asked if consumers’ assets were not protected previously, Bitcoin IRA said that it has always offered a $1 million insurance policy covering consumers “on the transactional side from any internal cases of fraud or theft.” It added that Kingdom Trust also provided additional insurance for digital assets in their custody, “though their policy limit is not known by us.”
In Tuesday’s announcement, Bitcoin IRA further said that it was reducing its wallet holding fees by 30% to .0005 points per month and reducing client transaction fees. It is also waiving the first year’s account fee ($240) “for a limited time” for the new account service.
“We have tiered pricing based on a client’s usage and investment amount,” the firm told The Block. “For example, if a client purchases multiple coins at once or invests over $25,000 then they’ll have better fees. The wallet holding fee is a small annual fee based on the amount of cryptocurrency in their wallet.”
As a result, Bitcoin IRA say they are now offering an all-round improved service.
“Our partnership with BitGo Trust provides our clients with faster account funding, lower fees, as well as significantly increased insurance protections,” said Chris Kline, COO at Bitcoin IRA.
Bitcoin IRA To Launch Interest-Earning Crypto Accounts Next Month
BitcoinIRA has partnered with digital asset lending firm Genesis Capital to offer investors the opportunity to earn interest on cryptocurrency and cash holdings.
As an Oct. 21 press release notes, Los Angeles-based Bitcoin IRA has provided digital asset individual retirement account (IRA) solutions since 2016 and processed over $350 million in investments, onboarding 4,000 clients.
Genesis Capital — a spin-off of over-the-counter (OTC) cryptocurrency broker Genesis Global Trading — has reportedly now lent in excess of $2.3 billion in cumulative originations and reported a 75% upturn in crypto and cash loans in Q2 2019.
Interest Earned Can Help Offset Fees
Bitcoin IRA COO, Chris Kline, has argued that adding interest-earning accounts to the firm’s crypto and cash lending program will help spur decentralized finance forward, claiming that:
“Borrowing and lending using cryptocurrencies and cash are providing new and safe opportunities for our clients to maximize the growth of their retirement accounts. Interest earned by a client can offset trading fees or custodial holding fees, essentially creating a free account making these fees a thing of the past.”
The first interest-earning accounts will reportedly be rolled out in November to a limited number of participants on a first-come, first-served basis. According to the firm, annual interest rates will vary based on the given coin and term length, with finalized details of the program to be announced in the future.
The press release notes that the new product follows Bitcoin IRA’s recent launch of crypto swaps and biometric security.
Qualified with U.S. regulator FinCEN, Bitcoin IRA’s technology supports self-directed retirement accounts that allow investors to create a digital asset IRA account, transfer funds from an existing IRA custodian and trade their crypto holdings in real-time via an OTC liquidity provider.
The firm collaborates with BitGo to provide clients with multi-signature digital wallets.
As reported, the popularity of digital asset IRA accounts was in full swing in 2017, notwithstanding concerns over asset volatility.
Experienced traders have meanwhile advocated for the significant tax advantages of IRAs.
As reported, ahead of its Q2 success, Genesis processed a $425 million in loans in Q1 2019 and $553 million in the first six months of its operations following its March 2018 launch.
This January, its CEO said that the previous cryptocurrency bear market had certainly helped to fuel the growth of the company, in line with other crypto lenders’ experience.
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