Moving Part of an Old 401(k) Into a Bitcoin IRA, Without Managing Keys

Say you're in your 50s or early 60s, and a 401(k) from a former employer has sat where you left it. You'd like part of it in bitcoin. Not fund shares that track the price, but actual bitcoin, inside an IRA so it keeps its tax treatment. You don't want to learn hardware wallets or keep a seed phrase in a drawer for the rest of your retirement. And above all, you don't want a tax bill you didn't plan for.

Our team hears some version of this often. This page walks through the situation one step at a time. For the full mechanics of the move itself, see our step-by-step rollover guide.

Step 1: Decide how much to move

How much goes into bitcoin is your call, and we won't suggest a number. Three questions help:

• When will you need the money? Take money out of an IRA before 59 1/2 and you'll usually pay a 10% penalty on top of income tax. One wrinkle: if you left your job in or after the year you turned 55, you can usually take money from that employer's 401(k) without the penalty. Roll it into an IRA and you lose that until 59 1/2.
• What else do you hold? Bitcoin's price moves a lot, in both directions. Most people look at their whole retirement picture before deciding how much goes into one asset.
• What does your plan allow? Some plans let you roll over part of your balance and leave the rest. Your plan administrator can tell you.

Rollovers don't count toward the annual IRA contribution limit, so there's no cap on how much you can move. Your tax advisor can confirm the details for your situation.

Step 2: Choose Traditional or Roth

The account type you open decides how the move is taxed.

• Traditional IRA. Pre-tax 401(k) money that moves by direct rollover into a Traditional IRA is generally not taxed on the way in. It grows tax-deferred, and withdrawals are taxed as ordinary income later.
• Roth IRA. Moving pre-tax money into a Roth IRA is a conversion. The converted amount counts as taxable income for the year you convert. In return, qualified Roth withdrawals are generally not taxed, and Roth IRAs have no required distributions during your lifetime. If part of your 401(k) is already a designated Roth account, that part can roll into a Roth IRA.

Which one fits depends on your tax rate now versus later, and on whether you plan to spend the bitcoin or leave it to heirs. Some people roll into a Traditional IRA first and convert portions to Roth over several years. At Onramp, conversions can be done on the platform. Confirm the plan and its tax cost with your tax advisor before you convert anything.

Step 3: Use a direct rollover, not a check made out to you

This is where most tax mistakes happen. Ask the plan to pay the money directly to your new IRA: nothing is withheld, and if the plan sends a check, it's made payable to the IRA. If the plan pays you instead, it must withhold 20%, and you have 60 days to deposit the full amount, making up the 20% from other savings. The rollover guide covers both routes in detail. Confirm your situation with your tax advisor.

Most 401(k) plans hold funds rather than bitcoin, so the money usually moves as cash. When it settles in your IRA, you buy bitcoin through Onramp, and it lands in your IRA's vault. Onramp helps with the paperwork. Depending on the plan, you may need to request the direct rollover from the plan administrator yourself. Most clients complete IRA setup within 5 to 7 business days, and the transfer itself usually takes 1 to 2 weeks. The same guide covers what your old plan may ask for and how long each part takes.

Step 4: Decide how the bitcoin is held

Every IRA needs a qualified custodian, which is why you can't hold your own keys inside one. That leaves four ways to hold bitcoin in an IRA: a bitcoin ETF in a brokerage IRA, a single-custodian self-directed IRA, a collaborative multisig IRA where you hold a key, and a Multi-Institution Custody IRA. An ETF is the least expensive route and fits accounts you may already have, but the account owns fund shares, not bitcoin. The other three hold actual bitcoin and differ in who holds the keys. The four ways to hold bitcoin in an IRA compares them side by side.

At Onramp, Traditional, Roth, and SEP IRAs are held in Multi-Institution Custody.

Three institutions protect your bitcoin. No one of them can lose it, move it, or use it, and nothing moves without your permission.

Multi-institution custody works like a bank vault that needs two keyholders to open: it takes two of the three (Onramp, BitGo, and CoinCover) to move your bitcoin. The bitcoin sits in a segregated wallet you can verify on-chain. No hardware wallets, seed phrases, backups, or PINs to manage.

Onramp's Bitcoin IRA is offered in partnership with Heritage IRA Inc., which handles the IRA's compliance, reporting, and record keeping. Onramp handles your onboarding, withdrawal processing, and account dashboard. Because the IRA holds bitcoin, you can withdraw bitcoin when you're ready, and IRA distribution rules still apply. Onramp's Bitcoin IRA

Step 5: Name your IRA beneficiaries

Beneficiary designations are set account by account, so name them on the new IRA rather than assuming the 401(k)'s carry over. At Onramp, you designate beneficiaries up front in your account.

It helps to know what your heirs would inherit, because an inherited IRA follows IRA distribution rules, not the rules for bitcoin held in a taxable account:

• No step-up in basis. Bitcoin held in a taxable account until death generally gets a basis equal to its fair market value on the date of death. Bitcoin inside an IRA doesn't.
• A ten-year clock. Under the SECURE Act, most heirs other than a spouse must empty an inherited IRA, Traditional or Roth, within ten years. A spouse has more options.
• Different tax by account type. Distributions from an inherited Traditional IRA are taxed as ordinary income. Distributions from an inherited Roth IRA are generally free of federal income tax, but the ten-year clock still runs.

Confirm how this applies to your family with your tax advisor or estate attorney. What happens to a bitcoin IRA when you die walks through the numbers.

Step 6: Know the costs

• The IRA. A Bitcoin IRA is included with an Onramp Core account at no additional cost. You can also open an Onramp Bitcoin IRA on its own for $100 a month or $1,000 a year for balances under 5 BTC. There is no setup fee.
• The move. There are no fees for IRA transfers or onboarding through Onramp and Heritage IRA. Your old plan may charge its own fee to close the account or send the money, so ask.
• Buying bitcoin. One-time bitcoin purchases inside the IRA carry a 0.65% trade fee, and recurring buys have no fee after the first purchase.

Ask any provider you compare for a complete fee schedule in writing.

What a finished plan looks like

• You've decided what share of the 401(k) moves, and the rest stays where it is or goes elsewhere on purpose.
• The IRA type matches the money: pre-tax into a Traditional IRA, or a planned, taxable conversion into a Roth.
• The money moved by direct rollover, with nothing withheld and no 60-day clock.
• The bitcoin sits in Multi-Institution Custody, protected by three independent institutions, with no seed phrase for you to keep.
• Beneficiaries are named on the new IRA, and your family knows it follows IRA rules at death.
• Your tax advisor has looked at the plan before you start.

FAQ

What is the best bitcoin IRA provider?

It depends on what you want the account to hold and who you want holding the keys. Compare five things: whether the account owns bitcoin or fund shares, the custody model, the full fee schedule, whether the provider works with a regulated IRA custodian, and how the account passes to beneficiaries. Onramp holds actual bitcoin in Multi-Institution Custody, and its Bitcoin IRA is offered in partnership with Heritage IRA Inc. and beneficiaries designated in the account. Bitcoin IRA providers compared

How do I roll my 401(k) into a bitcoin IRA without managing keys?

Open a Bitcoin IRA held in custody where you never hold a key, then request a direct rollover from your 401(k) plan into it. At Onramp, you complete Heritage IRA's online form and Onramp's onboarding, the team adds the IRA to your account and sends the transfer paperwork, and once the cash arrives you buy bitcoin inside the IRA.

Is rolling a 401(k) into a Bitcoin IRA taxable?

Generally not, if you use a direct rollover into the same type of account: pre-tax into a Traditional IRA, or a Roth 401(k) into a Roth IRA. Moving pre-tax money into a Roth IRA is a conversion, and the converted amount counts as taxable income. Confirm your situation with your tax advisor.

Do I hold a key?

No. Onramp, BitGo, and CoinCover each secure a key offline, never on a consumer device, in a 2-of-3 multisig. You never hold a key yourself.

Can I move only part of my 401(k)?

That depends on your plan's rules. Ask your plan administrator whether it allows a partial direct rollover.

Why not hold a bitcoin ETF in my IRA instead?

That's a reasonable choice for many savers, and it's the least expensive route. The difference is what the account owns: an ETF holds fund shares, while a Bitcoin IRA at Onramp holds actual bitcoin that you can withdraw as bitcoin.

Does Onramp carry insurance?

Onramp maintains custody insurance through Canopius, a Lloyd's of London syndicate: up to $50M in aggregate coverage across our custody operations. Onramp pays the premium.

What happens to the IRA when I die?

It passes to the beneficiaries you designated in the account. There's no seed phrase for your heirs to find. Bitcoin inside an IRA receives no step-up in basis, and most non-spouse heirs must empty an inherited IRA within ten years.

This page is educational and is not legal, tax or investment advice. Onramp is not a law firm or tax practice. Tax rules described are federal, current as of November 2026, and subject to change. Consult your own tax advisor before moving a retirement account.