Bitcoin IRA strategies allow entrepreneurs to use their retirement accounts to hold Bitcoin in a tax-advantaged way. At our Bitcoin Demystified event, Corey Daharsh of Advanta IRA explained how self-directed accounts (SDIRAs and Solo 401(k)s) work, why so few people know about them, and the practical steps business owners can take to compliantly invest in Bitcoin through retirement accounts.
Corey began by pointing out a surprising fact: only about 4% of retirement accounts in the U.S. are self-directed, despite there being more than $40 trillion in total retirement assets. The reason isn’t that it’s too risky—it’s that most people don’t know these accounts exist. Traditional custodians and advisors limit investment options to stocks, bonds, and mutual funds, but a self-directed IRA (SDIRA) or Solo 401(k) lets you invest in a wide range of alternatives, including cryptocurrency.
Self-directed accounts carry the same tax treatment as their traditional counterparts:
For entrepreneurs, this means Bitcoin gains inside a retirement plan may compound without immediate tax consequences, and in Roth structures, can even be distributed tax-free.
Corey explained several ways to fund these accounts:
IRS rules prohibit certain transactions with “disqualified persons.” This includes your parents, children, grandparents, grandchildren, and entities they control. You can transact with siblings, friends, or unrelated partners, but not directly with lineal family or your own business. Staying compliant with these rules is critical—violations can disqualify the entire account.
The most popular strategy Corey described is using a checkbook LLC owned by the retirement account. Here’s how it works:
This strategy has been supported in case law (Swanson v. Commissioner, T.L. Ellis), though managers cannot pay themselves compensation from the LLC. It is designed for passive retirement investment, not active personal income.
Corey also described the trust strategy: a retirement plan can own a trust that makes investments. The difference is that you cannot serve as the trustee—you must appoint someone else. For most owners, LLCs are simpler, but both structures achieve similar goals.
Setting up an LLC is straightforward: file articles of organization, obtain an EIN from the IRS, draft an operating agreement, and open a business bank account. Corey advised keeping language simple when dealing with banks—avoid overexplaining that it’s tied to an IRA, as most bankers are unfamiliar with self-directed structures. Simply present the EIN and operating agreement and request a standard business checking account.
Distributions also require planning. You cannot directly pull Bitcoin out of an SDIRA for personal use. Instead, you must either sell it and distribute cash or distribute ownership of the LLC itself, which creates reporting obligations. Planning distributions in advance prevents mistakes that could trigger unexpected taxes.
Corey summarized two main ways business owners currently invest in Bitcoin through retirement accounts:
Whichever method you choose, documentation and compliance are non-negotiable. Done correctly, Bitcoin can fit seamlessly into retirement plans, turning volatility into a long-term, tax-advantaged growth engine.
MEET Corey Daharsh
Advanta SDIRA
Corey Daharsh is a self-directed retirement investing expert with over ten years of experience in the financial industry, holding the prestigious designation of Certified IRA Services Professional (CISP) from the American Bankers Association.
While his personal investing interest involves various real estate asset classes and private lending, he’s helped hundreds of clients complete thousands of transactions since joining Advanta IRA in 2016.
Learn more about Advanta IRA →
This post is part of our Bitcoin Demystified event series. Watch the full 3-hour replay or explore other sessions:
Bitcoin doesn’t just belong on a balance sheet—it can also fit inside your retirement plan. With SDIRAs and Solo 401(k)s, business owners have the tools to capture tax efficiency, diversify, and position for the future.