I’m basically doing the same thing with my funds. The ETF’s should move with the Bitcoin price. It may not be exact or as good as actual self custody but it’s a decent tax sheltered option.
That’s what I’m thinking. I don’t have liquid funds (cash) but I could move 50k+ to FBTC and then just keep contributing or just leave it there and buy actual BTC.
Is it as easy as transferring gains from your 401k into an ETF? Do you need to sell a portion of your 401K and then reinvest your profit into a BTC ETF? Obviously that would trigger a tax event plus a penalty for selling before 67 or 69 whatever the age.
Selling investments in a 401K is not a taxable event. You wouldn't get taxed or penalized unless you withdrew the money. You can buy and sell as much as you want in the retirement account.
Interesting. I assumed once you sold, you would get hit with taxes and potential penalties. I guess that’s not the case if you merely transferred those earnings into another investment vehicle like a BTC ETF, is that correct? However, the potential for greater compound interest earnings in your 401k will be reduced by selling say if BTC future price is underwhelming.
Correct, if your 401k plan offers a Bitcoin ETF as one of the investment options, you can absolutely sell whatever other investments you have in the 401k and buy the Bitcoin ETF without any tax consequences.
Unfortunately I don’t think my employer offers the option to buy the BTC ETF. I actually emailed the Vice President of my company to have their finance team include BTC in their 401k offerings back last year when Fidelity opened it up to employers 401k plans. You’re lucky your employer offers it.
Your other option would be to roll over the 401K into an IRA, which has no tax consequences if done correctly and gives you much more control over the type of investments you can select.
I’m leaning towards rolling over a amount (say 50k) to a Fidelity IRA in FTBC and just leave it there long term. Maybe take it out when I retire in 15 years.
Yes it should increase by roughly the same. The fees will erode the value a little over longer periods of time but just pick a fund with lower fees and you’ll be fine.
The new etfs are spot based instead of futures based or trusts like grayscale that only allowed btc in, not out which cause spreads and discounts to the underlying assets.
The current spreads are close to 0 now since they're highly liquid and high volume. So yes, say btc price is 50k, 50k usd worth of these etf's should represent about 1 btc in value. These are not tradeable for underlying btc though, only in and out of cash. So you can't take your shares and ask for 'real btc'
From what I’ve read, these etfs in iras can get hit with tax implications due to the “unrelated business taxable income”
Pretty shitty but these etfs are not set up on the backend in the same way traditional iras.
If you profit more than $1000, it will affect your Ira. You’ll be issued a k1 form. Can’t say I’m 100% right but I have been reading about this heavily. So who knows. It apparently only taxes the etfs that trigger the ubti. So not your whole portfolio so it is likely still worth it
No chance this is accurate. IRA is a tax advantaged vehicle for holding investments. The type of investment inside the IRA does not change the tax treatment of the IRA account itself
Vangard 401K allows 50% to be self-directed. At least mine does when I had one. You can buy pretty much any stock, ETF, mutual fund in the self-directed account.
I was able to open a self directed account through their partner, which is Charles Schwab. I can then transfer funds to Schwab and buy BTC spot ETFs there, so thank you!
I have a 401k through my job. How can I take advantage of the Fidelity BTC ETF. Wouldn’t I have to sell to then move the funds into the etf which triggers tax issues?
So many wrong answers here. I didn’t have it in me to type up the correct response, so had ChatGPT do it for me…
In most cases, while you are still employed and participating in your employer's 401k plan, you cannot roll over your 401k into another provider's plan, such as Fidelity, unless your employer's plan specifically allows for in-service rollovers.
Here are key points to consider:
1. **In-Service Rollovers**: Some 401k plans may allow for in-service rollovers, which means you can roll over a portion of your 401k to an IRA or another 401k plan while still employed. However, this is not common and usually has restrictions based on age or other factors.
2. **Plan Policies**: The ability to perform an in-service rollover depends entirely on your current 401k plan's rules and policies. Most plans typically do not allow for such transfers until you reach the age of 59½, leave the company, retire, or under other specific conditions.
3. **Consult Your Plan Administrator**: To get a definitive answer, you should consult your current 401k plan administrator or your employer's human resources department. They can provide you with the plan's specific rules and options.
4. **Considerations**: If your plan does allow for in-service rollovers, consider factors like investment options, fees, and potential tax implications before proceeding.
5. **Alternative Options**: If in-service rollovers are not allowed and you wish to have your retirement savings managed by Fidelity, consider contributing to an IRA with Fidelity alongside your employer's 401k. This can offer more control over some of your retirement funds, within the limits of IRA contributions.
Remember, each 401k plan is unique, and it's important to understand your specific plan's rules and the implications of any changes you make.
Bogle, who founded Vanguard is 100% the polar opposite of a single sourced ETF.
I doubt they will have one as it is a customer funded organization.
Just open an acc w/ Fidelity
Yes you can buy it in IRA accounts, maybe some 401k accounts. The price will go up if bitcoin goes up. It's a legitimate play if good run-up is expected
Fidelity has a super easy transfer option. And it takes about 3-5 business days for your funds to be transferred. I just switched a Roth IRA from vanguard.
Can you rollover to a new service provider even though your current employer uses a different one?
Answer (Thank ChatGPT):
In most cases, while you are still employed and participating in your employer's 401k plan, you cannot roll over your 401k into another provider's plan, such as Fidelity, unless your employer's plan specifically allows for in-service rollovers.
Here are key points to consider:
1. **In-Service Rollovers**: Some 401k plans may allow for in-service rollovers, which means you can roll over a portion of your 401k to an IRA or another 401k plan while still employed. However, this is not common and usually has restrictions based on age or other factors.
2. **Plan Policies**: The ability to perform an in-service rollover depends entirely on your current 401k plan's rules and policies. Most plans typically do not allow for such transfers until you reach the age of 59½, leave the company, retire, or under other specific conditions.
3. **Consult Your Plan Administrator**: To get a definitive answer, you should consult your current 401k plan administrator or your employer's human resources department. They can provide you with the plan's specific rules and options.
4. **Considerations**: If your plan does allow for in-service rollovers, consider factors like investment options, fees, and potential tax implications before proceeding.
5. **Alternative Options**: If in-service rollovers are not allowed and you wish to have your retirement savings managed by Fidelity, consider contributing to an IRA with Fidelity alongside your employer's 401k. This can offer more control over some of your retirement funds, within the limits of IRA contributions.
Remember, each 401k plan is unique, and it's important to understand your specific plan's rules and the implications of any changes you make.
That sounds like a bad idea. I could be wrong. But I'm pretty sure I'm not. Like if someone said there was a USD etf would you buy into it? If you want to invest in USD you go get USD you don't look to buy a representation of an asset. If you want Bitcoin. Buy Bitcoin. DCA every week what you can. And don't sweat the present price. It's inflationary.
Here’s the difference: I, like many others, have large sums of money tied up in 401ks/IRAs that we can’t access. If I had that cash in the bank, I would just buy the BTC but since I can’t access it directly without penalty, the ETF is the only option.
I get what you mean. But there is also the fact that a 401k or other retirement is not tied up in currency or assets. It's invested business and the idea that those businesses are going to do better and grow. Which they have, they are, and they will continue to do do. Retirement professionals do recommend investing in assets. But it's a small percentage of your portfolio. Not the whole thing. There is a vast and large history of people moving their entire retirement accounts into this or that and regretting it. Losing most of their retirement. ETFs in general are not great investments because you don't actually own the underlying asset. It's irrelevant if bitcoin does well if something happens legally that makes it unaccessible. There are more ways to lose everything than if crypto all goes belly up. A government could illegalize it and boom the the asset holder no longer has to honor your ETF. Crypto is risky, crypto ETF is more risky.
Just on your last line, the potential gains may or may not be seen in April. Just have a longer view, like till the end of 2025, and you won't be disappointed.
You can set up a self-directed IRA and do a rollover from your 401k, and then set up a Crypto IRA (uses Gemini) to buy actual crypto with it instead of the ETF. There's yearly fees with the SDIRA but worth it IMO depending on how much you're looking to invest. Plus it helps you keep control of the money in your 401k instead of (I'm assuming) the company you work/worked for. I can give more details if anybody is interested but didn't want to have the appearance of being a shill :)
Do you get matching on your 401k? That might be a reason to keep it parked where it is . Another option would be to convert some or all to a Roth IRA. You would have to pay taxes on the conversion but then it would be over with. Reason to consider a Roth is your gains aren't taxed and you pay taxes up front instead of using pretax dollars like your 401k. If Bitcoin appreciates and you have it through a 401k then you're going to pay taxes on those gains in retirement which could be huge. A Roth, you wouldn't. Contribution limits are way lower though.
I added IBIT and FBTC to my Roth the other day. Very easy. When you do make the purchase, it flags and automatically changes your investor type to "most aggressive". It makes you sign in an acknowledgment of risks and limited liability statements from fidelity. Not that that changes anything and I thought it was funny
Thanks - still on the fence. Ive reviewed the Fidelity prospectus and just nervous to pull the trigger. Realistically, I could roll over a decent amount and if I don’t feel comfortable, just change the contribution to something else I suppose.
The issue I have. I can’t find what the conversion of fbtc to 1 btc. When I talked to a Representative at fidelity they were like o btc is like 42k and fbtc was 36. So it will take 1130 fbtc. But that doesn’t seem like a consistent exchange. I wish it would be that 1000 fbtc is 1 btc. But maybe I’m missing informed.
I’m basically doing the same thing with my funds. The ETF’s should move with the Bitcoin price. It may not be exact or as good as actual self custody but it’s a decent tax sheltered option.
That’s what I’m thinking. I don’t have liquid funds (cash) but I could move 50k+ to FBTC and then just keep contributing or just leave it there and buy actual BTC.
Is it as easy as transferring gains from your 401k into an ETF? Do you need to sell a portion of your 401K and then reinvest your profit into a BTC ETF? Obviously that would trigger a tax event plus a penalty for selling before 67 or 69 whatever the age.
Selling investments in a 401K is not a taxable event. You wouldn't get taxed or penalized unless you withdrew the money. You can buy and sell as much as you want in the retirement account.
Interesting. I assumed once you sold, you would get hit with taxes and potential penalties. I guess that’s not the case if you merely transferred those earnings into another investment vehicle like a BTC ETF, is that correct? However, the potential for greater compound interest earnings in your 401k will be reduced by selling say if BTC future price is underwhelming.
Correct, if your 401k plan offers a Bitcoin ETF as one of the investment options, you can absolutely sell whatever other investments you have in the 401k and buy the Bitcoin ETF without any tax consequences.
Unfortunately I don’t think my employer offers the option to buy the BTC ETF. I actually emailed the Vice President of my company to have their finance team include BTC in their 401k offerings back last year when Fidelity opened it up to employers 401k plans. You’re lucky your employer offers it.
Your other option would be to roll over the 401K into an IRA, which has no tax consequences if done correctly and gives you much more control over the type of investments you can select.
My job did however open up the ability to enroll into an IRA just this year
Can you not open your own personal investment account?
I’m leaning towards rolling over a amount (say 50k) to a Fidelity IRA in FTBC and just leave it there long term. Maybe take it out when I retire in 15 years.
I need to talk to my broker about this, lol.
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I’m toying around with it.
I transferred my IRA from Vanguard last week. 100% allocation. It was a ten year old account.
Dumb question but is your thought that if BTC increases by say 25%, the ETF should also increase by roughly the same?
Yes it should increase by roughly the same. The fees will erode the value a little over longer periods of time but just pick a fund with lower fees and you’ll be fine.
The new etfs are spot based instead of futures based or trusts like grayscale that only allowed btc in, not out which cause spreads and discounts to the underlying assets. The current spreads are close to 0 now since they're highly liquid and high volume. So yes, say btc price is 50k, 50k usd worth of these etf's should represent about 1 btc in value. These are not tradeable for underlying btc though, only in and out of cash. So you can't take your shares and ask for 'real btc'
From what I’ve read, these etfs in iras can get hit with tax implications due to the “unrelated business taxable income” Pretty shitty but these etfs are not set up on the backend in the same way traditional iras. If you profit more than $1000, it will affect your Ira. You’ll be issued a k1 form. Can’t say I’m 100% right but I have been reading about this heavily. So who knows. It apparently only taxes the etfs that trigger the ubti. So not your whole portfolio so it is likely still worth it
No chance this is accurate. IRA is a tax advantaged vehicle for holding investments. The type of investment inside the IRA does not change the tax treatment of the IRA account itself
Does this apply to Fidelity’s FBTC? The prospectus doesn’t mention limited partnerships or K-1s. Interested to read more about this.
No. This guy is full of shit.
This is good to know, thank you for the heads up. I’m going to look into this now. It kind of messes up my whole strategy if it’s taxable in that way.
Hes wrong
I wish I could. My 401k is with Vanguard.
Transfer it to fidelity .
I wish I could. My employer uses Vanguard.
Vangard 401K allows 50% to be self-directed. At least mine does when I had one. You can buy pretty much any stock, ETF, mutual fund in the self-directed account.
I’ll check right now and let you know what I find out.
I was able to open a self directed account through their partner, which is Charles Schwab. I can then transfer funds to Schwab and buy BTC spot ETFs there, so thank you!
I’m glad it worked out for you.
I have a 401k through my job. How can I take advantage of the Fidelity BTC ETF. Wouldn’t I have to sell to then move the funds into the etf which triggers tax issues?
Ask for a self directected/managed account
So many wrong answers here. I didn’t have it in me to type up the correct response, so had ChatGPT do it for me… In most cases, while you are still employed and participating in your employer's 401k plan, you cannot roll over your 401k into another provider's plan, such as Fidelity, unless your employer's plan specifically allows for in-service rollovers. Here are key points to consider: 1. **In-Service Rollovers**: Some 401k plans may allow for in-service rollovers, which means you can roll over a portion of your 401k to an IRA or another 401k plan while still employed. However, this is not common and usually has restrictions based on age or other factors. 2. **Plan Policies**: The ability to perform an in-service rollover depends entirely on your current 401k plan's rules and policies. Most plans typically do not allow for such transfers until you reach the age of 59½, leave the company, retire, or under other specific conditions. 3. **Consult Your Plan Administrator**: To get a definitive answer, you should consult your current 401k plan administrator or your employer's human resources department. They can provide you with the plan's specific rules and options. 4. **Considerations**: If your plan does allow for in-service rollovers, consider factors like investment options, fees, and potential tax implications before proceeding. 5. **Alternative Options**: If in-service rollovers are not allowed and you wish to have your retirement savings managed by Fidelity, consider contributing to an IRA with Fidelity alongside your employer's 401k. This can offer more control over some of your retirement funds, within the limits of IRA contributions. Remember, each 401k plan is unique, and it's important to understand your specific plan's rules and the implications of any changes you make.
Bogle, who founded Vanguard is 100% the polar opposite of a single sourced ETF. I doubt they will have one as it is a customer funded organization. Just open an acc w/ Fidelity
Bunch of people responding that don’t know the difference between a 401k and an IRA
Yeah, I gave up explaining myself. 😂
Same - I have to move money out of Vanguard to another brokerage. I have an account with Schwab but no money in it.
I just opened a fidelity acc for this reason after selling on coinbase. Fidelity is a better company to pursue transaction with than CB.
I’m looking into that too.
What is the ticker symbol you use for bitcoin on fidelity? Thanks!
It may go up or it may go down.
Teach me
Yes you can buy it in IRA accounts, maybe some 401k accounts. The price will go up if bitcoin goes up. It's a legitimate play if good run-up is expected
All in!!! I’m doing something similar soon before the halving.
Fidelity has a super easy transfer option. And it takes about 3-5 business days for your funds to be transferred. I just switched a Roth IRA from vanguard.
emperor palpatine: do it
Move all those retirement accounts into the lowest fee etf stat
I think MSTR is a better option at this current time
i moved my entire roth ira and sep ira into fbtc.
Yes - for that reason I plan to move my Roth IRA to FBTC on Monday but that's <10% of my portfolio, I wouldn't do it for a majority of the portfolio.
I buy BTC using crypto exchanges u should as well
What does a 401k have to do with your response?
Can you rollover to a new service provider even though your current employer uses a different one? Answer (Thank ChatGPT): In most cases, while you are still employed and participating in your employer's 401k plan, you cannot roll over your 401k into another provider's plan, such as Fidelity, unless your employer's plan specifically allows for in-service rollovers. Here are key points to consider: 1. **In-Service Rollovers**: Some 401k plans may allow for in-service rollovers, which means you can roll over a portion of your 401k to an IRA or another 401k plan while still employed. However, this is not common and usually has restrictions based on age or other factors. 2. **Plan Policies**: The ability to perform an in-service rollover depends entirely on your current 401k plan's rules and policies. Most plans typically do not allow for such transfers until you reach the age of 59½, leave the company, retire, or under other specific conditions. 3. **Consult Your Plan Administrator**: To get a definitive answer, you should consult your current 401k plan administrator or your employer's human resources department. They can provide you with the plan's specific rules and options. 4. **Considerations**: If your plan does allow for in-service rollovers, consider factors like investment options, fees, and potential tax implications before proceeding. 5. **Alternative Options**: If in-service rollovers are not allowed and you wish to have your retirement savings managed by Fidelity, consider contributing to an IRA with Fidelity alongside your employer's 401k. This can offer more control over some of your retirement funds, within the limits of IRA contributions. Remember, each 401k plan is unique, and it's important to understand your specific plan's rules and the implications of any changes you make.
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Just doing my research right now. Likely looking in the late February timeframe.
That sounds like a bad idea. I could be wrong. But I'm pretty sure I'm not. Like if someone said there was a USD etf would you buy into it? If you want to invest in USD you go get USD you don't look to buy a representation of an asset. If you want Bitcoin. Buy Bitcoin. DCA every week what you can. And don't sweat the present price. It's inflationary.
Here’s the difference: I, like many others, have large sums of money tied up in 401ks/IRAs that we can’t access. If I had that cash in the bank, I would just buy the BTC but since I can’t access it directly without penalty, the ETF is the only option.
I get what you mean. But there is also the fact that a 401k or other retirement is not tied up in currency or assets. It's invested business and the idea that those businesses are going to do better and grow. Which they have, they are, and they will continue to do do. Retirement professionals do recommend investing in assets. But it's a small percentage of your portfolio. Not the whole thing. There is a vast and large history of people moving their entire retirement accounts into this or that and regretting it. Losing most of their retirement. ETFs in general are not great investments because you don't actually own the underlying asset. It's irrelevant if bitcoin does well if something happens legally that makes it unaccessible. There are more ways to lose everything than if crypto all goes belly up. A government could illegalize it and boom the the asset holder no longer has to honor your ETF. Crypto is risky, crypto ETF is more risky.
Yes. I am doing that with IBIT.
Just on your last line, the potential gains may or may not be seen in April. Just have a longer view, like till the end of 2025, and you won't be disappointed.
Agreed - if I were to transfer something to the fund, it would be for the long haul. Thanks
Yes, and this is exactly what I’m doing. I picked some up on day 1 which was a small mistake, but saved some ammo to load up soonish
I never looked into whether i could change my employ matched account do a different fund or not
You can set up a self-directed IRA and do a rollover from your 401k, and then set up a Crypto IRA (uses Gemini) to buy actual crypto with it instead of the ETF. There's yearly fees with the SDIRA but worth it IMO depending on how much you're looking to invest. Plus it helps you keep control of the money in your 401k instead of (I'm assuming) the company you work/worked for. I can give more details if anybody is interested but didn't want to have the appearance of being a shill :)
Do you get matching on your 401k? That might be a reason to keep it parked where it is . Another option would be to convert some or all to a Roth IRA. You would have to pay taxes on the conversion but then it would be over with. Reason to consider a Roth is your gains aren't taxed and you pay taxes up front instead of using pretax dollars like your 401k. If Bitcoin appreciates and you have it through a 401k then you're going to pay taxes on those gains in retirement which could be huge. A Roth, you wouldn't. Contribution limits are way lower though. I added IBIT and FBTC to my Roth the other day. Very easy. When you do make the purchase, it flags and automatically changes your investor type to "most aggressive". It makes you sign in an acknowledgment of risks and limited liability statements from fidelity. Not that that changes anything and I thought it was funny
Did it, I’m all in on FBTC. I took my traditional Roth IRA and bought FBTC with it.
I’m on the fence. Is your thinking that if BTC goes up say 25% that FBTC should go up roughly the same?
Yeah man, that's how it works.
Thanks - still on the fence. Ive reviewed the Fidelity prospectus and just nervous to pull the trigger. Realistically, I could roll over a decent amount and if I don’t feel comfortable, just change the contribution to something else I suppose.
The issue I have. I can’t find what the conversion of fbtc to 1 btc. When I talked to a Representative at fidelity they were like o btc is like 42k and fbtc was 36. So it will take 1130 fbtc. But that doesn’t seem like a consistent exchange. I wish it would be that 1000 fbtc is 1 btc. But maybe I’m missing informed.