Pensco Provides Self-Directed IRA Investors With Expanded Options To Invest In Bitcoin

Continues efforts to make alternative assets accessible to IRA investors seeking long-term portfolio diversification options

PR Newswire

SAN FRANCISCO, April 3, 2014 /PRNewswire/ -- PENSCO, the nation's premier self-directed retirement custodian specializing in holding alternative assets, has announced its intention to expand the options it provides to investors who want to use their individual retirement account (IRA) assets to invest in bitcoin. The announcement comes on the heels of recent IRS guidance indicating that bitcoin will be subject to capital gains tax, heightening the importance of seeking tax-advantaged accounts for holding bitcoin investments.

"Investing in alternative assets can be a way for individuals to manage portfolio risk and return while also directly pursuing investments that reflect their personal passions or leverage their own knowledge and expertise. This can range from a belief in an emerging new technology or service, or a point of view about a certain asset, and the example in this instance is bitcoin," said Kelly Rodriques, CEO of PENSCO. "What's more, in light of the IRS ruling, individuals who choose to invest in bitcoin are looking for tax-efficient ways to do so, and one option is to leverage their IRA."

Since late 2013, PENSCO clients have been able to use their retirement funds to purchase bitcoin via the Bitcoin Investment Trust (BIT). The BIT is a private, open-ended trust that is invested exclusively in bitcoin. The BIT is sponsored by Alternative Currency Asset Management (ACAM), a wholly-owned subsidiary of SecondMarket Holdings, Inc. and is audited by Ernst & Young. Currently, more than $5 million in PENSCO client funds are invested in the BIT.

Another potential way PENSCO clients can now use their retirement funds to purchase bitcoin is to establish a legal entity, such as an LLC, and to invest in bitcoin through the LLC. This would allow individuals to hold bitcoin as an investment, while also leveraging the tax-advantaged status of their IRA accounts.

"PENSCO is committed to enabling American investors to use their retirement savings to invest in alternative asset classes, be it real estate and notes or private equity and bitcoin," said Rodriques. "Based on anticipated demand, we are continuing to look at additional ways in which PENSCO can help self-directed investors and advisors get exposure to bitcoin in tax-deferred accounts."

To read more about holding bitcoin in a self-directed IRA, visit the PENSCO blog for our latest post: 6 Things to Know Now About Bitcoin, the IRS and Self-Directed IRAs.

PENSCO Trust Company has been helping investors use their retirement account funds to invest in real estate, private equity and other non-exchange traded assets since 1989. 

As the trusted custodian of over $10 billion in assets on behalf of more than 50,000 clients, PENSCO works with asset sponsors, financial institutions, and financial advisors, as well as self-directed investors who typically have a point of view about alternative investment opportunities based on their own knowledge or expertise.  

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PENSCO Trust Company performs the duties of an independent retirement custodian, and, as such, does not provide investment advice, sell investments or offer any tax or legal advice. Potential clients are advised to perform their own due diligence in choosing an attorney, tax advisor, or any investment opportunity.

Alternative investments are not FDIC insured and are subject to risk, including loss of principal.

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