A lot of people want to have bitcoins in an IRA. However, most Bitcoin IRA account companies do not allow the control of any private key and, in addition, they usually charge large storage and purchase fees. Wouldn't it be great to avoid all these problems by keeping bitcoins directly in your IRA, with control of the private key, and at the same time maintaining the tax benefits of an IRA or Roth IRA? Therefore, IRAs are not prohibited from holding cryptocurrencies under the anti-currency rule and can therefore be owned by an IRA. Because cryptocurrencies are property, an IRA can purchase cryptocurrency by purchase without violating rules that prohibit IRAs from storing collectibles or coins.
In principle, Roth IRA account holders who want to include digital tokens in their retirement accounts just need to find a custodian willing to accept cryptocurrency. There are some rules that prohibit Roth IRAs from holding “collectibles” and “coins”, but they don't seem to apply to cryptocurrencies. However, there are custodians who do allow cryptocurrency to be held in a Roth IRA, such as Bitcoin IRA, Bit IRA and iTrustCapital. Some argue that cryptocurrencies can increase the diversification of Roth IRAs, and others argue that cryptocurrencies (and the Roth IRAs that hold them) will continue to increase in popularity and price in the future.
While holding cryptocurrencies in your IRA can increase diversification, the extreme volatility of cryptocurrencies makes them a poor choice for a retirement investment. Consequently, cryptocurrency is not a collector's item, so IRAs are not prohibited from holding cryptocurrencies under the anti-collectible rule.