Fidelity Crypto® IRA: Eligibility, Setup, and Tax Advantages

Fidelity Crypto® IRAs let U.S. investors over 18 hold Bitcoin, Ethereum, and Litecoin within Traditional, Roth, or Rollover IRAs—without account or maintenance fees—while applying a 1% trading spread on transactions. Eligibility hinges on U.S. residency in supported states, age, and having or opening a linked Fidelity IRA account to fund the Crypto IRA with cash transfers. Setup involves three straightforward steps—opening/linking accounts, funding by rollover or transfer, and placing buys/sells via Fidelity’s 23-hour trading window. Tax advantages mirror those of standard IRAs: Roth Crypto IRAs grow tax-free, while Traditional/Rollover Crypto IRAs defer taxes until withdrawal under long-term capital gains rates.

Table of Contents

What Is a Fidelity Crypto® IRA?

A Fidelity Crypto® IRA is an individual retirement account enabling direct exposure to cryptocurrencies like Bitcoin and Ethereum within a tax-advantaged vehicle. Offered by Fidelity Digital Assets®, it provides:

No account opening or maintenance fees; only a 1% spread on trades.
Access to major coins: Bitcoin, Ethereum, and Litecoin—no exotic or low-liquidity tokens.
Extended trading hours: 23 hours a day, seven days a week.

Eligibility Requirements

U.S. Residency & Age

Must be a U.S. citizen or resident aged 18+, residing in a state where Fidelity Digital Assets® is authorized.
Not available in all states; check Fidelity’s Crypto FAQs for current state eligibility.

Linked IRA Account

You must have (or open) a linked Traditional, Roth, or Rollover IRA brokerage account with Fidelity.
Funding Constraint: All capital transfers into a Fidelity Crypto® IRA must originate from a linked Fidelity IRA of the same type—no direct crypto deposits.

How to Set Up Your Fidelity Crypto® IRA

Step 1: Open & Link Accounts

Log in to your Fidelity brokerage account and navigate to “Open an IRA.”
Select Traditional, Roth, or Rollover IRA based on your tax goals.
In the Crypto section, opt into Crypto trading and link the new or existing IRA.

Step 2: Fund & Transfer

New Contributions: Deposit cash up to IRS limits (e.g., $7,000 for 2025) into your IRA; designate funds for Crypto IRA.
Rollovers/Transfers: Initiate a rollover from another custodian or a transfer from an existing Fidelity IRA; funds flow into the Crypto IRA account.

Step 3: Buy & Sell Crypto

Once funded, access Fidelity Crypto® via web or mobile.
Place buy/sell orders for Bitcoin, Ethereum, or Litecoin—trades incur a 1% spread.

Read this: Crypto Taxes 2025: Ultimate Guide to IRS Rules, Reporting & Compliance in the USA

Tax Advantages Explained

Roth Crypto IRA

Contributions: Made with after-tax dollars; no deduction.
Growth: Tax-free, provided withdrawals are qualified (age 59½+ and account open ≥ 5 years).

Traditional & Rollover Crypto IRAs

Contributions: Potentially tax-deductible, depending on income and participation in employer plans.
Growth: Tax-deferred; withdrawals taxed at ordinary income rates (but crypto gains qualify for long-term capital gains if held > 1 year).
RMDs: Required Minimum Distributions begin at age 73, per IRS Publication 590-B.

Expert Insight:
“These new IRS regulations requiring broker reporting of digital-asset sales aim to simplify taxpayers’ obligations and improve compliance in high-risk spaces,” said IRS Commissioner Danny Werfel, emphasizing the growing legitimacy and oversight of crypto IRAs.

FAQs & Checklist

FAQ: Can I Change My IRA Type Later?

Yes—roll traditional to Roth (subject to taxes) or vice versa via internal Fidelity processes, but adhere to rollover rules and Tax Code limits.

Checklist: Documents & Actions

☐ Valid U.S. ID & SSN for KYC/AML

☐ Fidelity brokerage login credentials

☐ Bank account details for funding

☐ Record of prior IRA custodian (for rollovers)

☐ Understanding of IRS contribution limits and deadlines