Should You Hold Bitcoin in an Unchained IRA?

Most Bitcoin IRA providers take custody of your coins. Unchained doesn't. That single difference matters more than you might think—and it's the core question worth examining if you're considering holding Bitcoin in a tax-advantaged retirement account.

What Unchained Actually Offers

Unchained provides self-directed Traditional and Roth IRA accounts where you hold Bitcoin in a multisig vault. You control one of the keys. This means no third-party custodian can lose your coins in an exchange hack, and you're not relying on someone else's security practices.

The IRS treats Bitcoin as property, so the same tax rules that apply to stocks in your IRA apply here: Traditional IRAs give you tax-deferred growth (you pay taxes on withdrawals), while Roth IRAs offer tax-free growth if you follow the rules.

For 2026, contribution limits are $7,500 if you're under 50, $8,600 if you're 50 or older. One critical detail: you must contribute in USD, not Bitcoin. The IRS doesn't allow direct crypto contributions except for in-kind transfers from existing accounts.

The Fee Structure, Honestly

Unchained isn't cheap. Here's what you'll pay:

• $250 annual fee per IRA account (starting year two, paid from personal funds)
• 1.50% Bitcoin conversion fee on USD transfers and rollovers (minimum $2,000 trade)
• $895 optional Concierge Onboarding if you want hand-holding
• Bank fees like $35 per wire or $25 per distribution through Fortis Bank

That 1.5% trading fee is notably higher than what you'd pay on most exchanges. If you're rolling over $100,000 from a 401(k), you're paying $1,500 just to convert to Bitcoin.

Compare this to simply buying a spot Bitcoin ETF in a regular Fidelity or Schwab IRA, where trading is essentially free. The tradeoff is clear: you're paying for self-custody and actual Bitcoin ownership rather than shares in a fund.

When This Makes Sense

The Roth case is strongest. If you believe Bitcoin will appreciate significantly over decades, tax-free growth in a Roth IRA compounds that belief. One case study from Bitcoin Magazine showed potential tax savings exceeding $117,000 compared to taxable holdings, assuming substantial appreciation.

Roth IRAs also have no required minimum distributions, meaning you can let your Bitcoin sit indefinitely. For inheritance planning, this matters—your beneficiaries receive Bitcoin that's already been taxed.

Traditional IRAs work differently. You get a tax deduction now but pay ordinary income rates on withdrawals. If you expect to be in a lower tax bracket in retirement, this math can favor you. If Bitcoin moons and you're withdrawing large amounts, you might regret not paying taxes on a smaller amount upfront.

Rollovers from existing retirement accounts face no contribution limits. If you have $500,000 in an old 401(k) and want to convert it to self-custodied Bitcoin, Unchained facilitates that—minus the 1.5% conversion fee.

When This Doesn't Make Sense

If you're in a low tax bracket now and expect that to remain true, direct self-custody outside any IRA might serve you better. You avoid the fees, avoid the complexity, and long-term capital gains rates are already favorable.

If you're doing anything operational with Bitcoin—mining, for instance—an IRA creates problems. Unrelated Business Income Tax (UBIT) applies to active business income inside retirement accounts, eating into returns.

If you want simplicity and don't care about holding actual Bitcoin, a spot ETF in a conventional IRA achieves tax-advantaged exposure with zero learning curve. You're trusting BlackRock or Fidelity instead of managing keys, but for many people that's an acceptable tradeoff.

The Risks Worth Acknowledging

Prohibited transactions can blow up your IRA's tax status. Self-dealing—using IRA assets for personal benefit—is the classic trap. The McNulty court case raised questions about certain "checkbook IRA" structures, though Unchained's model differs from what was challenged there.

Volatility in retirement is genuinely concerning. Bitcoin can drop 50% in months. If you're drawing income from an IRA and Bitcoin tanks, you're selling at the worst time. This isn't a reason to avoid Bitcoin in retirement accounts entirely, but it argues for keeping allocation reasonable.

Compliance burden exists. You're responsible for understanding IRS rules around IRAs, and mistakes can be costly. Unchained handles custody infrastructure, not tax advice.

The Bottom Line

Unchained makes sense for a specific person: someone who believes strongly in Bitcoin's long-term value, wants actual ownership rather than ETF exposure, has enough assets to absorb the fees without eroding returns, and values self-custody enough to pay for it.

If you're rolling over a substantial 401(k), have a long time horizon, and want a Roth conversion with real Bitcoin, this is one of the few legitimate options. If you're contributing $7,500 a year and the $250 annual fee represents a significant percentage of your holdings, the math gets harder to justify.

The honest answer: this product exists for Bitcoin maximalists who prioritize holding their own keys over cost optimization. If that's you, Unchained delivers what it promises. If you're simply looking for Bitcoin exposure in a retirement account, cheaper options exist—they just require trusting someone else with custody.