Bitcoin IRA, the American bitcoin-based retirement fund that allows people to invest in bitcoin, has announced its successful completion of a new milestone. The platform has opened Bitcoin Individual Retirement Accounts worth over $2 million since it started its operation 5 months ago.
Investors who wish to use the in bitcoin-based/linked retirement fund have two options: they can either invest in the real thing, stored in a specialized bitcoin wallet offered by Bitcoin IRA or opt for a proxy certificate ETF – a dollar denominated representation of the digital currency. Based on the performance of bitcoin this year, those holding ‘real’ bitcoin can see impressive returns over time.
Bitcoin ETFs often trade at 20-30% premiums over the actual market indices for bitcoin. They also have hidden fees chargeable on the purchase, for annual management and liquidation. A comparison between Bitcoin IRA’s and Bitcoin ETF’s fees show recurring charges for Bitcoin ETF as against a one-time fee charged by Bitcoin IRA.
Considering a 3-year investment plan, a person investing in 11 BTC worth of ETF when the Bitcoin price is at $750 will spend $289 as purchase fee at 3.5%. Over a period of three years, if the cryptocurrency’s value appreciates by $100 each year, then at 3.5% management fees, the cost incurred will be $327 at $850/BTC, $366 at $950/BTC and $404 at $1050/BTC respectively. After the period, when the investor sells the ETF after paying a 3.5% purchase fee of $443 at $1150/BTC, he would have spent a total of $1829 (17.5%). However, with Bitcoin IRA, apart from a flat 15% initial fee, there are no hidden charges or management fees. Investing in 11 real bitcoins for a period of 3-years at an initial rate of $750 per unit would cost the investor $1238, upfront irrespective of the cryptocurrency’s appreciation during the investment term.
Unlike Bitcoin ETF, Bitcoin IRA investors can continue to keep their investment in bitcoins, beyond the investment term. Bitcoin IRA’s pricing model focuses on covering the extensive security costs involved in managing the revolutionary product and whatever the growth in investment entirely belongs to the investor.