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Should You Use Multi-Institution Custody for a Bitcoin IRA?
Jackson Mikalic | Head of Business Development
Jul 23, 2025
As Bitcoin continues to mature into a widely recognized long-term store of value, many investors are exploring how to hold it within retirement accounts.
Bitcoin IRAs have been available for several years, but until recently, the options were limited and came with trade-offs. Investors had to choose between managing their own keys, which added complexity for the end investor, or relying on a single custodian, which carried greater counterparty risk.
To solve these challenges, a more resilient approach has emerged: a custody model built on proven multi-signature infrastructure, where responsibility is distributed across multiple independent institutions. This is known as multi-institution custody, designed to offer both simplicity and security.
This article will walk you through what a multi-institution Bitcoin IRA is, how it works, how it compares to other IRA models, and whether it may be a fit for your long-term investment and retirement goals.
How Bitcoin Custody Works in an IRA
For the first decade of Bitcoin’s existence, custody has taken two main forms for both direct ownership and retirement accounts:
- Single-custodian IRAs, often using centralized exchanges or trust companies like iTrust Capital or Bitcoin IRA
- Self-custody IRAs with collaborative custody, such as Unchained’s model, where the client holds one of the keys
The introduction of Bitcoin ETFs in January 2024 created an additional way to gain exposure to Bitcoin in tax-advantaged accounts by holding ETF shares rather than the asset directly.
Each model involves trade-offs between control, convenience, cost, and security.
Collaborative custody gives you direct control of keys, which appeals to some investors. However, it also introduces operational complexity, particularly in terms of inheritance and long-term security. Additionally, there is regulatory uncertainty around whether this model complies with IRS rules for tax-advantaged accounts. If investors can move funds without any third party, it may not meet the custody requirements.
Even setting regulation aside, many investors are uncomfortable managing their Bitcoin for years or decades, where a small mistake could lead to permanent loss.
On the other end of the spectrum, single-custodian IRAs simplify the experience but introduce counterparty risk. In these models, a single institution controls your Bitcoin. If that institution experiences a loss, hack, or operational failure, your assets could be at risk.
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