$11.7 trillion in assets are held in Individual Retirement Accounts by 47.9 million people. Recent research from Fidelity shows the average IRA balance is $110,800. Importantly (for Web3), significant growth in IRA accounts is coming from Gen Z and Millennials both in terms of number of accounts and investment activity.
There are restrictions on what you can invest in.
– You can NOT invest IRA assets in “collectibles” such as art, sports trading cards, stamps, coins, antiques, etc.
– Nor can you invest in real estate that is for your personal use.
So, can you invest IRA assets in NFTs? Yes, of course.
If an NFT represents ownership of a single piece of digital art or a sports trading card, or ownership of antique furniture or a stamp collection, or real estate that you use as a primary residence or vacation property then you can’t put that particular NFT into an IRA.
However, you can invest IRA funds in…
- NFTs that represent securities, including a private company or fractionalized art;
- NFTs that represent ownership of Music (or other things) with a royalty stream;
- NFTs that represent private debt/loans;
- NFTs that represent real estate;
- NFTs (as well as fungible tokens) that represent gold, silver, platinum, oil & gas, etc.
Naturally you can also invest IRA assets in cryptocurrency such as BTC, ETH, SOL, MATIC, BNB, BAT, etc. No issues there, but in this blog I’m just addressing NFTs.
So yes, you can invest your IRA in NFTs!
The trick now is this…will your custodian let you? Can their core system even hold NFTs as assets for your IRA? Do they have a secure wallet to display NFT content (contracts, documents, video, audio, photos, disclosures, ongoing updates, etc)? Do they vault NFT content in an ISO-certified data repository? Do they have a crypto liquidity program with fiat on/offramps?
Good news for neo-banks, crypto exchanges, NFT marketplaces, FinTech and other industry innovators – customers can have their IRA assets held in multiple places. They aren’t required to hold 100% of their IRA at just one custodian. In fact, they can have unlimited IRA accounts, so long as they don’t contribute more that $6,000 per year total ($7,000 if they are 50 or older). Thus they can have some of their IRA invested in traditional stocks and mutual funds at Fidelity, Robinhood, Schwab or other such places, and can hold NFTs, cryptocurrency, etc in an account at another place (“custodian”).
So if your customers want to hold NFTs, cryptocurrency, or other alternative investments such as debt, private securities or real estate you just need to find an IRA custodian like Fortress Trust who can do that. It is indeed allowed. Powered by Fortress Web3 Technologies.