Casey Wagner

<div id="highlights-block_63584d0c09d78" class="highlights">
 <ul>
 <li>The IRA offerings include options with exposure to bitcoin, ether, solana, litecoin, cardano and avalanche tokens</li>
 <li>Prime Trust launched its beta crypto IRA in March</li>
 </ul>
 
</div>



When Prime Trust launched its <a href="https://cms.blockworks.co/prime-trust-launches-beta-program-for-crypto-ira/" target="_blank" rel="noreferrer noopener">beta test</a> for a crypto IRA product, the financial infrastructure firm said it was just following the money. The trend hasn’t changed, so the firm has moved forward with its official launch.&nbsp;



“Half of US wealth is in retirement funds,” <a href="https://www.linkedin.com/in/sara-xi-977500/" target="_blank" rel="noreferrer noopener">Sara Xi</a>, chief product officer at Prime Trust, said. “Even if we have 1% penetration, we’re talking about $500 to $600 billion.”&nbsp;



Prime Trust in March announced the launch of its beta program for the Prime Trust Crypto IRA, a first-of-its-kind retirement account with a single application programming interface (API). On Monday, the company said it was ready to offer the product to the public.&nbsp;



The IRA offering includes traditional and Roth IRAs with options for exposure to bitcoin, ether, solana, litecoin, cardano and avalanche tokens. Market volatility has not deterred investors, Xi said, even for smaller tokens relative to bitcoin and ether, which are more commonly seen in <a href="https://cms.blockworks.co/nearly-half-of-younger-people-want-crypto-exposure-in-401ks-schwab-study-says/" target="_blank" rel="noreferrer noopener">traditional portfolios</a>.&nbsp;



“I think people need access to a diversified portfolio right when the market is not good,” Xi said. “Everyone is looking for all the different ways to diversify, and crypto might be volatile in the short term, but if you&#8217;re investing in a longer term, it&#8217;s a fairly attractive diversification vehicle.”



Security has been a top concern for clients, Xi said, and the product will offer a warm-hot storage architecture supported by multi-party computation technology.



The Prime Trust Crypto IRA is backed by the company’s institutional-grade financial API technology, Xi said, which includes compliance, custody, payment rails, crypto trading and settlement resources. The idea is to make it as easy as possible for business-to-consumer clients to offer the services, she added.&nbsp;



Prime Trust’s IRA product comes less than a year after <a href="https://cms.blockworks.co/retirement-investment-provider-introduces-alt-401k/" target="_blank" rel="noreferrer noopener">ForUsAll</a>, a retirement investment platform for small businesses, partnered with Coinbase to launch its Alt 401(k), an investment vehicle that allows employers to offer crypto exposure through 401(k) accounts.



The news also comes as bitcoin finds itself in an <a href="https://cms.blockworks.co/bitcoin-a-stable-investment-volatility-dips-below-nasdaq-sp-500/" target="_blank" rel="noreferrer noopener">unusual position</a>: It is currently less volatile than major equities. For the first time since 2020, bitcoin’s volatility has dropped below that of both the Nasdaq and the S&amp;P 500 equity indexes, according to data from Kaiko, so investors suffering from the market turndown might find some respite in crypto.





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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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Prime Trust Crypto IRA Set To Leave Beta as Bitcoin Volatility at Historic Low

<div id="highlights-block_62430befa4968" class="highlights">
 <ul>
 <li>Financial infrastructure provider throws its hat in the ring for a retirement account with crypto exposure</li>
 <li>With the rise of trading apps and crypto interest, this is a product investors have been asking for, expert says</li>
 </ul>
 
</div>



Financial infrastructure provider Prime Trust is following the money, and in the US, it’s in retirement funds.&nbsp;



“Half of US wealth is in retirement funds,” Sara Xi, chief product officer at Prime Trust, said. “Even if we have 1% penetration, we&#8217;re talking about five hundred to $600 billion.” 



<div class="wp-block-image"><figure class="alignright size-bw-389x219"><img loading="lazy" decoding="async" width="219" height="219" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/sara-xi-219x219.jpg" alt="Sara Xi" class="wp-image-16266" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/sara-xi-219x219.jpg?w=219 219w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/sara-xi-219x219.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/sara-xi-219x219.jpg?w=150 150w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/sara-xi-219x219.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/sara-xi-219x219.jpg?w=257 257w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/sara-xi-219x219.jpg?w=261 261w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/sara-xi-219x219.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/sara-xi-219x219.jpg?w=50 50w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/sara-xi-219x219.jpg?w=800 800w" sizes="(max-width: 219px) 100vw, 219px" /><figcaption>Sara Xi</figcaption></figure></div>



Prime Trust announced the launch of its beta program for the Prime Trust Crypto IRA, a first-of-its-kind retirement account with a single application programming interface (API), on Tuesday. The new product allows users to onboard, fund accounts, and invest retirement funds in cryptocurrency, a structure clients prefer due to the tax benefits, Xi said.



“We see that traditional registered investment advisors want to offer crypto, just as another investment vehicle, to their end users,” Xi said. “We also see that crypto wallet apps and onramps have been doing quite well with crypto trading, but their customers want to take advantage of the tax benefits to invest some of their retirement funds into crypto.”



Through this new product, Prime Trust will offer traditional and ROTH IRAs and digital asset insurance for integrators and their users. Security has been a top concern for clients, Xi said, and the product will offer a warm-hot storage architecture supported by multi-party computation technology.



The Prime Trust Crypto IRA is backed by the company’s institutional grade financial API technology, Xi said, which includes compliance, custody, payment rails, crypto trading and settlement resources.&nbsp;



The beta launch comes as investors continue to push for ways to diversify into the asset class, Xi said. Bitcoin and ether are currently the most popular in terms of tokens, she added.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“The IRA account is a very recent interest area that we see all of the end consumers and our customers of our clients are interested in,” Xi said. “It&#8217;s really the fact that crypto is now a mainstream investment.”&nbsp;</blockquote>



New and existing Prime Trust clients can now <a href="https://go.primetrust.com/cryptoira.html" target="_blank" rel="noreferrer noopener">apply</a> to join the beta launch, and access will open to those accepted on June 1, 2022. The company hopes to have the product in the hands of end users by early fall 2022.&nbsp;



Prime Trust’s IRA product comes less than a year after ForUsAll, a retirement investment platform for small businesses, partnered with Coinbase to launch its Alt 401(k), an investment vehicle that allows employers to over crypto exposure through 401(k) accounts.&nbsp;



Xi expects that the industry will only continue to grow, and she looks forward to the expansion.&nbsp;



“It&#8217;s a huge market, not crowded at all, and we welcome all sorts of competition,” she said. “We are the one provider that harnessed the automation from API and complimented it with a full operational team…our goal is to make the end user experience very frictionless.”



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Prime Trust Launches Beta Program for Crypto IRA

<div id="highlights-block_615df65f5542e" class="highlights">
 <ul>
 <li>ErisX is leaning into the IRA provider space by offering a way for self-directed clients to get exposure </li>
 <li>The regulatory guidelines are already fairly straight forward, but Trudeau looks forward to having more clarity around the space</li>
 </ul>
 
</div>



Earlier this month at Blockworks’ Digital Asset Summit in New York City, Matt Trudeau, chief operating officer of ErisX sat down to discuss the exchange’s move into retirement account products and what to expect on the regulatory front.&nbsp;



In March, ErisX announced that Midland Trust clients would be able to invest in digital assets through their self-directed Individual Retirement Accounts (IRAs), including bitcoin and ether.&nbsp;



“The IRA market in the US is massive and there is a whole market of self-directed IRAs,” Trudeau said. “There is the typical 401(k) that you get through your employer, but anyone who has changed employers, they typically roll this into an IRA.”&nbsp;



As people have started to change careers more frequently, IRA investments have grown. ErisX started receiving inquiries from IRA providers that wanted to give clients exposure to cryptocurrencies, Trudeau said.&nbsp;



“They were seeing increasing demand from their customers to add crypto assets into their IRA portfolio, and they were struggling to find a path that enabled them to do that in a way that they felt comfortable with that had the right level of security and regulatory compliance,” he said.&nbsp;



ErisX saw the potential and built out the technology to work within the IRA space and has since expanded to partner with several different IRA providers, including IRA Financial and The Entrust Group.&nbsp;



“The IRA investors tend to be more sophisticated,” Trudeau said. “These are typically people that have assets and they are looking at the long run, these are retirement accounts, they are looking 10, 20, 30 years out… their trade sizes tend to be larger.”&nbsp;



These investors are excited about expanding their portfolios into a new asset class, Trudeau said.&nbsp;



From a regulatory standpoint, Trudeau said that ErisX is already well versed in keeping within required guidelines, and he looks forward to watching the conversation evolve to bring more clarity to the space.&nbsp;



Watch the full interview below and all of the panel videos from DAS <a href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/#videoslider0" target="_blank" rel="noreferrer noopener">here</a>. 



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="DAS New York 2021: ErisX’s Trudeau Say IRA Investors Want Crypto Exposure" width="1024" height="576" src="https://www.youtube.com/embed/HUG9HWJZA7U?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
</div></figure>



<hr class="wp-block-separator"/>



Are you a UK or EU reader that can’t get enough investor-focused content on digital assets? <a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a> in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket. <a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>.



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ErisX’s Trudeau: IRA Investors Want Crypto Exposure

Jacquelyn Melinek

<div id="highlights-block_610317ac5fb86" class="highlights">
 <ul>
 <li>Bitcoin IRA, a large digital asset IRA platform, said more than 75% of their clients are over the age of 45 and 31% of near-retirees between the ages of 55 to 64 are invested in cryptocurrencies. </li>
 <li>Kingdom Trust’s platform Choice, an individual retirement accounts provider, and bitcoin mining firm Compass Mining announced today that they&#8217;ve joined forces to offer IRAs in a tax advantageous account for miners that produce crypto.</li>
 </ul>
 
</div>



The global cryptocurrency market is growing at a fast pace and while people generally think crypto retail investors are a younger demographic, there’s a new group emerging as prominent players: people looking to save for retirement via IRAs and benefit from tax advantages. 



According to stats from Bitcoin IRA, a large digital asset IRA platform, more than 75% of their clients are over the age of 45 and 31% of near-retirees between the ages of 55 to 64 are invested in cryptocurrencies.



In order to take advantage of the opportunity, Kingdom Trust’s platform Choice, an individual retirement accounts provider, and bitcoin mining firm Compass Mining announced that they&#8217;ve joined forces to offer IRAs in a tax advantageous account for miners that produce crypto. 



In general, the US Internal Revenue Service views bitcoins as taxable property, so they’re taxable in the same fashion as stocks or bonds. But, it’s possible for those investing in bitcoin to avoid hefty capital gains taxes by including digital assets in certain retirement accounts.



This means Choice users can buy bitcoin mining machines through an IRA and any coins created would be able to have tax-free appreciation in their retirement account like other assets such as real estate.&nbsp;



“We want to make it simple, approachable, relatable and easy,” Whit Gibbs, founder and CEO of Compass Mining said during a Twitter Space “Bitcoin Circular Economy” event on Thursday.&nbsp;&nbsp;



“You get to make bitcoin for yourself and we’re in a golden era of bitcoin where it’s incredibly profitable as well. It’s awesome to be able to onboard people to mining and get the tax advantage they can stack until they’re ready,” Gibbs said.&nbsp;



The platform launched in 2020 and has more than 125,000 retirement accounts with 20,000 alternative assets and $18 billion assets under custody.&nbsp;



As the retirement space grows, more companies in the crypto space are working together and building awareness in a tax-advantaged way, Meltem Demirors, chief strategy officer at <a href="https://cms.blockworks.co/coinshares-to-launch-business-segment-following-record-q1/" target="_blank" rel="noreferrer noopener">CoinShares</a>, said during the Twitter Space event.&nbsp;



<h3 class="wp-block-heading">Crossing generations</h3>



Although Bitcoin IRA mainly has an older user base, its service is available to people 18 years old and older, as long as they have earned income to contribute to the IRA. 



While the younger generation is known for diving into crypto, the older generation is catching on as well, Chris Kline, chief operating officer and co-founder of Bitcoin IRA, said in an interview with Blockworks. The older demographic is investing in cryptocurrency through self-directed retirement accounts due to a desire to catch up on retirement funds, inflation fears and tax benefits, he said.&nbsp;



Bitcoin IRA started in 2016 and went through waves of interest as price volatility loomed, Kline said. But he believes in the value of bitcoin long term and sees a huge shift in clients now wanting exposure to the cryptocurrency world.



In 2017, Bitcoin IRA had 700 account holders and as to date it is up about 14,186% to over 100,000 users with about $1.5 billion in total transactions, Kline said.&nbsp;



“What’s driving the investments is that [users] are seeing accelerated growth in crypto at seriously large levels,” Kline said.&nbsp;



About 13% of Americans invested in cryptocurrency in the past 12 months, according to a recent <a href="https://www.norc.org/NewsEventsPublications/PressReleases/Pages/more-than-one-in-ten-americans-surveyed-invest-in-cryptocurrencies.aspx" target="_blank" rel="noreferrer noopener">survey</a> by NORC at the University of Chicago. While 62% of the respondents said they aren’t investing in cryptocurrency because they don’t understand it enough.&nbsp;



The cryptocurrency markets have a lot of movement and volatility, which is something older generations aren’t used to, Kline said. But in order to reassure customers, he said Bitcoin IRA is hyper-focused on expanding its functions and accessibility, while sharing content and education beyond their products to educate users on the crypto space, too.&nbsp;



Although Kline said he isn’t a financial advisor or tax expert, he said there are more benefits to an IRA because you won’t have to pay <a href="https://cms.blockworks.co/theres-no-merit-to-that-80-crypto-capital-gains-tax-rumor/" target="_blank" rel="noreferrer noopener">capital gains</a> taxes, even though funds are subject to normal tax rates when accessed.&nbsp;



“To help Americans retire we have to offer more options, what started as a manual concept of a bitcoin IRA has evolved into 24/7 self-trading and expanded further with the first earned program so users could make interest on their assets,” he said. So, people can use bitcoin and get paid in bitcoin as rewards.&nbsp;



“Bitcoin is here to stay, it’s a big thing and we’re seeing clients wanting exposure to it,” Kline said. “Our mission is to help Americans retire, they’re behind on retirement planning and using alternatives [like bitcoin] is where they’re going for that accelerated growth,” he said.