Why Bitcoin is a Great Retirement Asset

While most individuals on the periphery observe bitcoin’s volatility and perceive it to be a highly speculative asset, bitcoin is actually the ultimate breakthrough in savings technology. Its fixed supply of 21 million BTC sets it apart from all other currencies, investments, and savings vehicles. As conviction in the credibility of bitcoin’s fixed supply has grown, bitcoin’s value has increased by orders of magnitude and advocates are increasingly using bitcoin for long-term savings rather than merely as a speculative asset to trade (or day trade).

As more early adopters have increasingly focused on the superior fundamentals of bitcoin as a long-term savings vehicle, retirement assets have logically also begun to shift to bitcoin. Historically, there have been limited options to allocate tax-advantaged savings to bitcoin and most people to date have been forced into inferior investment products, such as Grayscale Bitcoin Investment Trust (GBTC), principally because it is easy to do so in a standard retirement account at a brokerage firm. With GBTC, there is a trust that holds bitcoin, and individuals purchase shares of the trust. Experienced bitcoiners understand that this is a poor approach to holding bitcoin (maybe even the worst possible way). It introduces unnecessary layers of counterparty risk (at least four), it is not possible to redeem shares in the trust for actual bitcoin and the annual fees (2%) are extreme given the severe limitations of the product.

While holding retirement bitcoin on a direct basis through a deposit account with a third-party custodian would be an improvement, the most informed bitcoiners have begun to shift toward an approach where bitcoin is held through a self-directed IRA with an individual holding his or her own private keys. The power of private key ownership means that you can eliminate counterparty risk while at the same time capitalizing on the benefits of tax-advantaged savings. There is no better way to save for the long-term than holding bitcoin in a tax-advantaged account, while also having possession of your own private keys. It is the pinnacle of retirement savings and it’s what we work to both enable and make easy at Unchained Capital.

While there will undoubtedly be a growing number of options to invest tax-advantaged retirement funds in bitcoin (such as a potential future ETF), none will match the value delivered through an Unchained Capital Retirement Account in combination with a self-directed “checkbook” IRA. Through this structure, Unchained clients can own bitcoin with tax-advantaged dollars while holding their own keys in collaborative custody and eliminating the counterparty risk of large financial institutions. For individuals that demand private key ownership, we expect to serve all of their needs, which includes retirement savings and which is why we’re investing in educational content while also delivering products and services that create long-term retirement solutions. In this article, we review the basics of retirement savings vehicles as well as provide an overview of how Unchained Capital and Key Keeper IRA work closely to make the process as easy as possible for bitcoiners that value holding their own private keys.

What is a Self-Directed IRA?

A Self-Directed Individual Retirement Account (IRA) allows individuals to purchase alternative investments other than those allowed in a standard IRA or 401(k) on a tax-advantaged basis, and can be set up as either a Traditional or Roth IRA. Whereas a standard IRA or 401(k) can typically invest in stocks, bonds, ETFs and mutual funds, a self-directed IRA can invest in real estate, physical gold, or private placements at the direction of the IRA holder. In the age of bitcoin, many self-directed IRA owners are using these vehicles to hold bitcoin as well, and many bitcoin holders are now setting up self-directed IRAs for the express purpose to gain additional exposure to bitcoin on a tax-advantaged basis.

Setting up a self-directed IRA requires finding a willing IRA custodian and setting up the necessary legal structures. All IRAs are required by law to have a licensed financial institution acting as a legal custodian, however with a self-directed IRA holding bitcoin, individuals can secure physical custody of their own keys through what is referred to as a “Checkbook” IRA.

What is a “Checkbook” IRA?

Self-directed “checkbook” IRAs are set up such that the sole asset owned by the IRA is typically an LLC or a Trust. The IRA is the sole 100% owner of the LLC or Trust. However, the IRA account holder can be designated as “Manager” of the LLC or as the “Trustee” of the Trust. As such, the Manager or Trustee, respectively, would be the sole party with access to any assets owned by the entity (bitcoin, in our case). The LLC or Trust has its own bank account, which is typically funded through the rollover of existing IRA or 401k funds and which is used to purchase bitcoin. Technically, when any dollars flow into the IRA (such as from a rollover or annual contribution), the IRA custodian will immediately invest them into the LLC or Trust by transferring them into the entity’s bank account.

Once the funds are in the LLC or Trust’s bank account, the owner of the self-directed IRA can use them to purchase bitcoin using an exchange or OTC account registered to the entity- not to the individual. The process of setting this all up sounds complicated, but there are services out there that will guide you through it, such as KeyKeeper IRA. A service provider such as KeyKeeper IRA will help match you with a licensed IRA custodian and tailor the structure based on your circumstances and jurisdiction. Not all self-directed IRA services offer trusts as an alternative to LLCs, so if you choose to work with another provider, we recommend to find one that does. Using a trust avoids all LLC fees entirely and allows for the election of a successor trustee to help facilitate inheritance planning.

How can you hold your own keys for your retirement bitcoin?

Once the “Checkbook” IRA structure has been created and funds have been rolled over, the owner of the self-directed IRA can convert the US dollars into bitcoin and take control of the private keys. This is all made quick and easy with an Unchained Capital retirement account, which allows clients to onboard an LLC or trust, using the same login as their personal, non-IRA account. Once an account is established in the name of the LLC or Trust, the manager or Trustee (who is also the beneficial owner of the Checkbook IRA) can then create an Unchained multisig vault using his or her own private keys. If the Manager or Trustee also has a personal account with Unchained Capital, through the use of alternative derivation (BIP32) paths, he or she can even use the same hardware wallets to secure the bitcoin held in the name of the entity. The retirement funds would be fully segregated both from an account perspective and from a bitcoin wallet/address perspective in compliance with IRS requirements, but the physical devices and seeds can be the same, reducing the operational security burden.

In certain states, the Unchained Capital OTC desk can further simplify the process by directly facilitating the conversion of U.S. dollars into bitcoin and delivering bitcoin directly into the control of the Self-Directed IRA owner in his or her role as Manager or Trustee, and monthly vault statements can be produced and delivered to any party that needs them for reporting purposes.

Client is matched with a properly licensed IRA custodian through KeyKeeper IRA.
Client controls keys to bitcoin in Unchained Capital vault.

*This account is required under the Internal Revenue Code to be custodial in nature, held by a licensed financial institution. Client is matched with a financial institution through KeyKeeper IRA. Cash may enter this account on a temporary basis, but is immediately transferred out and into to the investment trust.

Breaking Down the Process with KeyKeeper and Unchained Vaults + OTC Desk

The above steps may sound difficult, but the KeyKeeper IRA team makes the entity formation and account creation process easy. They will also walk you through the 401(k) or IRA rollover process and then hand you off to the Unchained Capital Concierge team. The Unchained Capital Vault Concierge Team team will take you the rest of the way through building a retirement vault. If you reside in one of the states where our OTC desk currently operates, Unchained will also help convert the funds into bitcoin delivered directly into your cold-stored multisig vault, and if not, the team at KeyKeeper IRA will help match you with an exchange or OTC partner based on your jurisdiction. The following sections provide a breakdown of the full process, which can take as little as two weeks to complete from start to finish.

Create Your Unchained Capital Personal Account

Time Estimate: Same Day (on your own) or 1-2 Weeks (Concierge Onboarding).
Recommendation: Should be done in parallel to KeyKeeper IRA set up process

Before you can create an account in the name of the LLC or Trust that will hold your retirement bitcoin, the entity will first need to be created, which can take a few weeks. We recommend clients set up a personal Unchained Capital account, if you don’t already have one, in parallel to help accelerate the overall process. Setting up a personal account in advance ensures that you have devices and keys that are compatible with Unchained Capital and it provides you with the opportunity to become familiar with our platform and multisig while working through administrative and legal paperwork on the IRA formation side.

You can begin setting up a personal multisig vault with Unchained Capital by creating an account here and constructing your vault with two hardware wallets. If you would like help creating your personal vault, you can submit a request for our concierge onboarding service, through which we’ll ship you the devices you need, and walk you through key set up and multisig vault creation. You’ll also have the opportunity to ask our Concierge team at setup and on a go-forward basis any questions you might have about private keys, hardware wallets, operational security, multisig, and our collaborative custody platform. If you already have 2 devices and would like to set up your multisig vault on your own, your account can be approved and your vault built in the same day. Separately, if you go through concierge onboarding, it typically takes 1-2 weeks accounting for processing of paperwork & payment, shipping of devices plus key set up and vault creation.

Select A Package

We will ship you devices directly from the manufacturer if you need them and coordinate a time to help with vault creation.

Configure The Devices

Our concierge team walks you through device set-up, provides operational security guidance, and gives hands-on support.

Build Your Vault

We assist with vault creation and configuring advanced features. $1,000 of bitcoin will be deposited into your new vault.

Connect with KeyKeeper IRA to set up Legal Entities & IRA Accounts

Time Estimate: Plan for Two Weeks (assumes client is responsive to information requests).
Recommendation: Should set up Unchained Capital account in parallel to this process

  • Introductory call: Call between client and KeyKeeper IRA ($150)
  • Advice on Structure: KeyKeeper determines optimal legal structure based on client jurisdiction and goals (Trust vs. LLC, Roth vs. Traditional IRA, etc.)
  • KeyKeeper Paperwork & Payment: Client submits initial paperwork and payment to KeyKeeper IRA (initial $150 is credit toward full payment if client moves forward).
  • Entity Formation and EIN: KeyKeeper files and prepares required paperwork for LLC(s) or Trust(s) and obtains EIN (Tax ID Number) for entity(s) on behalf of client.
  • IRA Custodian Application: KeyKeeper matches client with a licensed IRA custodian (typically Solera National Bank in Colorado) and submits application on behalf of client (note this step requires client to submit certain personally identifiable information); IRA custodian reviews and approves application
  • Bank & IRA Custodian Agreements: Once application is approved, client must review a number of documents and sign a series of agreements including the following:
    • Bank account agreement (including wire agreements)
    • Trust or LLC agreement executed with IRA custodian
    • IRA Direction Designation & Expense Payment (with IRA Custodian)
  • IRA Rollover/Transfer: Once the IRA and entity bank accounts are set up, KeyKeeper IRA provides instructions of how to initiate an IRA rollover or transfer, which typically involves filling out a form which will be submitted by the IRA custodian to your legacy IRA or 401k custodian.
  • Account funding: once the client’s self-directed IRA is funded, the client can direct those funds to an exchange or OTC partner such as Unchained Capital to purchase bitcoin before depositing bitcoin into an Unchained Capital multisig vault for long-term cold storage. See descriptions below for more detail on these steps of the process.

To set up the necessary legal structures, schedule an introductory call with KeyKeeper IRA. Note that the introductory call costs $150, but that $150 is credited against any setup fee if you continue with the IRA setup process. During this call, the KeyKeeper team will identify whether you will need an LLC or Trust depending on your state of residence and determine how many legal entities you will need (note you may need separate entities for a Roth vs a Traditional IRA depending on your goals and circumstances).

After you sign an initial round of documents, the KeyKeeper IRA team will file and prepare all required paperwork for your LLC or trust, as well as obtain an EIN (Tax ID Number) for the entity. While that is being done, the KeyKeeper IRA team will also submit applications to the licensed IRA custodian, usually Solera National Bank, which will require you to upload a selfie and photo of your ID through a secure mobile app. Once the application is received and approved, you will e-sign a series of documents sent by the IRA custodian to set up your IRA and entity checking account.

Once the IRA and entity checking accounts are open, you will need to initiate the “rollover” process from your legacy 401(k) or IRA account. KeyKeeper IRA provides instructions of how to do this which typically involves filling out a form provided by your IRA custodian. Depending on your legacy provider’s policies, the rollover of funds may be done by bank wire or by physical delivery of a check. If your legacy provider does not support bank wires and requires a check to be mailed, it is wise to start the process as soon as you obtain your IRA account number since there will be a wait time for transit through the mail as well as a wait time for the check to actually clear. Once the funds hit your IRA account, they will be invested into the LLC or trust via transfer from the IRA account into the entity’s checking account.

Onboard IRA Trust or LLC Account with Unchained Capital

Once your Trust or LLC is formed by KeyKeeper IRA and you have the corresponding documentation, it’s a good time to onboard your entity with Unchained Capital. Note Unchained Capital Retirement Accounts have an annual account fee of $250 and onboarding can occur while you’re in the process of rolling over or transferring your retirement funds to your self-directed IRA. To do this, log into your Unchained Capital personal account and select Settings, Accounts, and then Add Account. Fill out the business account onboarding forms with the information provided to you by the KeyKeeper IRA team regarding your entity. If the entity is an LLC, you’ll need to provide your articles of organization and operating agreement. If your entity is a trust, you’ll need to provide your trust agreement, which again KeyKeeper IRA will provide to you.

For either type of entity, you will also need to submit the EIN and information regarding the IRA owner. The Unchained Capital Tier 2 approvals generally take a few days to complete if the information is accurate. Once your Unchained Capital Tier 2 account has been approved, you can either create a vault with the same devices as you used to create your personal vault, or you can purchase and use entirely new devices.

There is no security degradation by using the same devices with multiple vaults, and in many cases, using as few devices as possible can help you stay more secure by minimizing the number of hardware wallets, seeds, and wallet configuration files that you must coordinate and secure. Our concierge team is happy to assist you through the process, but if you would like to use the same devices for both your personal and retirement accounts, you must make one advanced setting change per device to upload a unique extended public key for each account. The process is quick and easy; the video below shows this step as part of key creation:

Purchase Bitcoin with Unchained’s OTC Desk (available in certain states)

With your legal entities and IRA accounts established and funded through KeyKeeper IRA and your IRA vault constructed at Unchained Capital, your self-directed IRA is ready to purchase bitcoin. If you are in a state supported by Unchained’s OTC desk for bitcoin purchases, you will need to submit your Tier 3 profile information. If you are in a state not yet supported by Unchained’s OTC desk, KeyKeeper IRA can assist you with opening an account registered to your LLC or trust with a bitcoin exchange or separate OTC desk to facilitate bitcoin purchases with your retirement funds.

If you have any questions, reach out to the Unchained Capital support team, your concierge onboarding advisor or submit a request to onboard to our OTC desk directly on our website. In order to purchase bitcoin through Unchained Capital, you will need to sign a master purchase agreement once your Tier 3 profile has been approved, and you will then be connected with your personal trading team via encrypted chat. When ready to purchase bitcoin, clients simply ask for a quote through a dedicated encrypted chat, and an Unchained Capital trader will quote an execution price based on the amount requested. To accept the quote, clients respond to confirm, and the trade is executed, consistent with processes of most all OTC desks.

Clients then receive a trade statement with wiring instructions. Log into your LLC or trust’s checking account and initiate a wire transfer for the full amount plus any fees (note that Unchained OTC desk charges 0.5% for processing and service fees). As soon as the wire hits the Unchained Capital account, our funding team facilitates the transfer of your new retirement bitcoin directly into your unilateral control (in your role as Manager or Trustee). It generally takes 2-3 hours for your bitcoin to be delivered to your vault from the time you confirm trade execution until final confirmation of your retirement bitcoin if you wire funds immediately, at which time you then have permissionless and unilateral control over your retirement funds.


Dedicated encrypted trading chat to quote and execute trades.


After a quote is accepted, a trade statement is emailed and you wire funds.


Once funds are received, bitcoin is direct deposited into your multisig vault.

Reporting and Tax Requirements

There are some additional regulatory requirements related to a self-directed IRA. You should speak with KeyKeeper IRA or another tax professional to iron out the details, but the high level view of the two main requirements is provided here.

First, you will need to report to your IRA custodian once per year the present U.S. Dollar value of your IRA, which can typically be done easily through your IRA custodian’s web portal.

Second, if your IRA owns an LLC, your state will require the LLC to file an “annual report” online each year. In most states, this “annual report” merely asks for updated contact information for the LLC. If your IRA owns a trust in place of an LLC, no annual report with the state is required but you will need to annually mail a form notice to the IRS (provided to you by KeyKeeper IRA).

Retire With Bitcoin

As your lifelong bitcoin financial services partner, Unchained Capital is here to serve all of your bitcoin-related needs, whether it be the most secure custody platform in the industry, an OTC desk that can execute trades with your personal trading team, or our lending platform, which sets the industry standard for its unparalleled security and trust-minimization. Bitcoin retirement accounts are a natural extension of our suite of services for both individuals and businesses, and we’re here to deliver a white-glove experience for clients that want tax-advantaged access to bitcoin. The process may seem complex but you will have personal support from the teams at Unchained Capital and KeyKeeper IRA all along the way to assist you in the process and to answer any and all questions.

Many of us at Unchained Capital have gone through this exact process personally and we could not recommend it more highly. There is no better way to secure your retirement than holding bitcoin with your own private keys in collaborative custody with Unchained Capital. As Saifedean Ammous explained in the Bitcoin Standard, many of the most important decisions an individual can make are the ones conducted with their future self. Your future self will thank you for taking the time and putting in the effort to set up a self-directed bitcoin IRA.

“While microeconomics has focused on transactions between individuals, and macroeconomics on the role of government in the economy, the reality is that the most important economic decisions to any individual’s well-being are the ones they conduct in their trade-offs with their future self. Every day, an individual will conduct a few economic transactions with other people, but they will partake in a far larger number of transactions with their future self.”

Saifedean Ammous
The Bitcoin Standard

Interested in transitioning a legacy retirement account into bitcoin? Connect with our concierge team and reach out to KeyKeeper IRA today to sign up.

Unchained Capital

Unchained Capital

To learn more about Unchained Capital and bitcoin native financial services with multisignature, sign-up on our website. To stay up to date on Unchained Capital news and announcements, follow us on our Blog, Facebook, Twitter, and join the conversation on Telegram.

Leave a Reply