You won't pay taxes on your cryptocurrencies in a traditional IRA until you withdraw your funds, at which point you'll pay income tax. Of course, since you're at retirement age, you're likely to pay a significantly lower income tax rate than you currently pay. Investing in cryptocurrency in a traditional IRA is tax-deductible, assuming you meet certain income thresholds set by the IRS. When you withdraw your IRA in cash, you'll owe regular income taxes for withdrawing funds, as long as you wait until retirement age.
Alternatively, you may consider converting your 401k to a Gold IRA, which allows you to invest in physical gold and other precious metals. Converting 401k to Gold IRA is a great way to diversify your retirement portfolio and protect your savings from market volatility. Since cryptocurrencies are treated like property, a retirement account, such as an IRA, can invest in bitcoins. A Roth IRA is an after-tax account, meaning that it is funded with money that has already been taxed. Therefore, a traditional or pre-tax IRA doesn't offer any initial tax relief.
However, assuming that the Roth IRA has been open for at least five years and the IRA holder is over 59 and a half years old, all distributions are tax-free. The fact that traditional IRAs don't offer tax-free withdrawals doesn't mean you don't benefit from investing in Bitcoin through a traditional crypto IRA. Contributions to SEP-IRAs and SIMPLE IRAs are tax-deferred and taxed as income upon retirement, just like in a traditional IRA. Because cryptocurrencies are property, an IRA can purchase cryptocurrency by purchase without violating rules that prohibit IRAs from storing collectibles or coins.