Are you a bitcoiner in the 7.1?

7.1M of us have USD, not BTC, put away for a rainy day. What are we doing — bitcoin was built for rainy days ☔

If you are reading this, you are likely part of the 7.1 million bitcoin owners who have U.S. retirement accounts with dollars in them, but not bitcoin.

I was in that situation too. Despite co-founding one of the world’s largest digital asset managers (CoinShares), there were no good options for tax-advantaged bitcoin.

Studying the landscape, and the data ($34.6TN is a massive market, more on that below) it was clear that not only did this gap need filling — bridging the gap is the single most exciting opportunity that I can see to help advance bitcoin adoption.

So, I teamed up with a couple of my former teammates and built Choice. We make it seamless to hold bitcoin and all the ‘normal’ investments from one retirement account. We launched today.

This means you can use your retirement dollars to buy bitcoin, have it grow tax advantaged; and probably lower your taxes doing it.

Maybe more profoundly, it also means that for the first time, you can hold your stocks in the same retirement account as your bitcoin. Here is how that is possible:

• In 1974 the government created individual retirement arrangements (IRAs) meant to incentivize citizens to save ‘for a rainy day’ through tax advantaged treatment.
• When you protect savings with these ☔ umbrella accounts, your investments that would normally be taxed can receive tax-advantages (advantages vary by account type).
• In 2014 the IRS began taxing bitcoin (Notice 2014–21) and as a result, indirectly opened up the gates for bitcoin to be eligible to be held in retirement accounts by qualified custodians.
• As a result, you can hold bitcoin in a retirement account you simply need a self directed IRA, held with a custodian who can provide ‘qualified custody’ for digital assets and is connected to an exchange.

At Kingdom Trust, we began powering bitcoin custody in 2016, and individual accounts in 2017; but mainly for other people. Since we opened the category, we’ve seen a handful of companies emerge to help bridge the gap in a couple different formats:

• SDIRA Administrator/Intermediaries: Regal Assets, BitIra, BitcoinIra
• Single Member LLC Focus: KeyKeeper IRA & RocketDollar — both great if you want the flexibility of a single member LLC, one is a bit more bespoke than the other.
• Traditional Trust Companies: Equity or Kingdom Trust — classic self directed IRAs held directly with qualified custodian *obviously I am the CEO at Kingdom Trust.

Still, three years later, < 1% of our users are holding bitcoin + other assets in the same account; and <0.02% of total U.S. retirement assets are exposed to bitcoin.

The mission: find and educate the rest of the 7.1, because it’s the best thing we can do for bitcoin.

1. To date, Bitcoin has been out of reach for many U.S. investors since U.S. retirement savings ($34.6TN) are often the only funds people have available to invest — most people aren’t investing with their rent money.
2. It’s an incredible opportunity for bitcoin adoption — U.S. retirement accounts represent the largest, single addressable pool of untapped users (and capital): With <0.02% of US retirement assets currently exposed to BTC — we’ve only begun to scratch the surface.
3. There is an obvious group of users who can help us caitalize on point one and help accelerate point two — it’s the ~7.1M U.S. bitcoin HODLrs already have retirement accounts for a rainy day, but no bitcoin in those retirement accounts

And if you need one more reason to get fired up, of the ~179K BTC or just under 1% of bitcoin that we estimate are held in U.S. tax advantaged funds; more than 80% of that is indirect and often carries a premium like $GBTC.

Bottom line: There is a clear opportunity to close the education gap, teach bitcoin holders how to keep more of their bitcoin gains and tap into new pools of capital for bitcoin. That’s a win, win, win.

7.1M is a MASSIVE number and we can’t do this alone. We need your help.

Personally we could not be more focused on this mission; and professionally, we bet our reputations on this mission by building Choice.

So, we have an ask:

If we are going to reach all 7.1 million bitcoin holders, you have to help us take this message forward; they aren’t all on medium; or even crypto twitter.

These are your friends, neighbors, co-workers and family; help us reach them. If you are serious about helping, we suggest the following:

Get some skin in the game. Setup an account: whether you decide we suit your needs best or not — get setup. As a general starting point, there are three main rules to know before getting started with retirement accounts:

1. Funds held in retirement accounts must remain in retirement accounts until a certain age (early withdrawal comes with a penalty)
2. There are limits on how much you can contribute, tax advantaged, yearly
3. There are a few items that are prohibited as investments

Reach & Teach: retirement had always been complex, hard to understand, and loaded with misconceptions. It doesn’t have to be, here’s five facts to share and pique the interest of others:

1. Retirement accounts are simple: best thought of as ‘wrappers’ around money that mean investments made with that money are advantaged.
2. There are two main types — 401(k), requires a sponsor such as an employer; and an IRA — no sponsor required, there are a couple flavors.
3. There are rules and restrictions around how money is invested/used, but they are not as complex as you may believe.
4. You can hold bitcoin, physical gold, land and more in a Self Directed IRA
5. You may even be able to hold your keys (bitcoin) in cold storage in your IRA, with the proper structure.

Show solidarity ☔ / Spread the Memes: It’s an idea we want to share — use our account or not — if you believe in bitcoin take advantage of its incredible savings tech + the tax advantages the government has given you.

So obviously memes* are the way to go:

• Bitcoin [in a retirement account] fixes this — (next time you see someone complaining about taxes and bitcoin)
• Spend dollars. Save bitcoin — (next time you see someone talking about spending bitcoin, e.g. #spendUSDsaveBTC)
• Bitcoin was built for rainy days ☔ — (With the money printer going brrrr…there is lots of rain in the forecast)
• Save bitcoin, not dollars — (next time you see someone humble brag about their retirement day trading wins online)
• Have you heard of tax-advantaged bitcoin? — (once you hear it, you just can’t un-hear it…)
• Aannndd…For you visual people 👉 we have some crispy memes; feel free to contribute

*h/t to Michael Goldstein for inspiring this approach. Are we doing it right?

Thanks for reading. And if you’ve made it this far — you might as well join our waitlist and get some free sats for opening a retirement account (yes this is an affiliate link, even I am on the waitlist).👇

Free bitcoin. For real.

None of the prior or related text is offered as or meant to be considered financial advice. Kingdom Trust is an independent qualified custodian under the Investment Advisers Act of 1940, as amended, and 26 USC 408. Kingdom Trust is registered and regulated in the state of South Dakota and does not provide, promote, endorse or sell investment products and does not endorse or promote any individual investment advisor or investment sponsor. The information provided here is intended to be educational and informational in nature and should not be construed as anything else.

Offline data sources:

Prequin, Future of Alternatives Report, October 2018; DQYDJ, 2016 Federal Reserve SCF Data; CapGemini, World Wealth Report 2019, Alternative Assets held by HNWI (12%)

Online data sources:

ICI — Individual Retirement Accounts (IRAs): FAQs

Grayscale Q1 2020 Digital Asset Investment Report — Grayscale®

Who Owns Stocks in America? Individual Investors