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Can you buy crypto through a Roth IRA?


IInvestors can buy cryptocurrency in different ways. In this segment of “The Crypto Show” on Motley Fool live, recorded on February 23Fool.com contributors Jon Quast and Travis Hoium answer a member’s question about whether crypto can be purchased through a Roth IRA.

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Jon Quast: To my knowledge, directly, no, you can’t do that. I think you would have to have some sort of approved exchange traded fund to be able to do that.

Travis Houm: Because you buy the Shades of grey (OTC: GBTC) series of products too, which are actually direct. I understand that there are two fundamental avenues. There are exchange-traded funds, ETFs, which don’t actually buy cryptocurrency, they buy futures. Then there are Grayscale products that actually buy cryptocurrency and hold it in their own cold wallet. I believe Coinbase (NASDAQ: CURRENCY) does the cold storage for it.

Quest: I think you are right.

Hoium: This is a direct property, but slightly different mechanics. I can’t answer directly if these can be purchased in retirement accounts, but that would be the two ways to do it.

Quest: Let’s say, for example, that you are interested in buying and holding Bitcoin. To my knowledge, you can’t do this in a Roth IRA, but you could theoretically buy something like MicroStrategy (NASDAQ: MSTR) stock, which is basically Bitcoin (CRYPTO: BTC) That much.

Hoium: Like leveraged bitcoin.

Quest: Yes, you’re right. This is leveraged bitcoin. To answer your question, Vihan, I would say no, would be the answer directly. But there are these little indirect workarounds that would give you significant cryptocurrency exposure. The other would be something like a Marathon Digital Backgrounds (NASDAQ: MARA), which is also a lot, a lot of Bitcoin on the balance sheet. The Orion blockchain would be another.

Hoium: Many miners not only generate revenue from bitcoin mining, but also keep that bitcoin on their balance sheet. Again, this is another game of leverage. Bitcoin goes up, they make more money from their operations and balance sheet. Bitcoin goes down, the reverse happens.

There will be more and more products hitting the market in the crypto space. There are almost every week that will probably really fit into retirement accounts or different types of trading accounts that fit in as part of ETFs or exchange-traded notes. There aren’t many today.

Jon Quast owns Bitcoin. Travis Hoium owns Coinbase Global, Inc. The Motley Fool owns and recommends Bitcoin and Coinbase Global, Inc. The Motley Fool recommends MicroStrategy. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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