In this informal instructional video, Mark Kohler answers a viewer’s question about whether to borrow against Bitcoin or hold it in a Roth IRA. He proposes a hybrid strategy: use Bitcoin as collateral to obtain a loan, then allocate the loan proceeds to fund tax‑advantaged retirement accounts (a Roth IRA and a solo 401(k) for a side‑gig business) while also using the loan to purchase additional crypto. Kohler walks through the mechanics—how a W‑2 employee can still contribute to a Roth IRA, how employer 401(k) matching works, the annual contribution limits (e.g., $19,500 employee deferral, $5,000 match), and how a side‑gig LLC can open a solo 401(k). He explains that the borrowed funds can be placed into these accounts, allowing future crypto gains to grow tax‑free, and that interest earned on crypto holdings can offset loan interest, making the arrangement financially neutral. The segment is conversational, off‑the‑cuff, and includes illustrative numbers to show how the three “buckets” (Roth, employer 401(k), solo 401(k)) can be funded using Bitcoin‑backed borrowing.
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Does it make more sense to borrow against some of my bitcoin and use the rest collecting interest to pay off the loan or hold it in a Roth and sell it once tax free? Wow, tough question. The first answer that comes to mind for me is Brady, do both. Because see, look it, if you've got bitcoin and you're borrowing against it, the first thing I want to know is what are you using the money for that you're borrowing against it now? Oh, here's an idea. Okay, this is good. This, I'm just. This is a new strategy. I'm just kind of off the cuff here with. This is kind of fun. So let's say Brady has a day job. Brady. And from doing this bitcoin stuff, it sounds like it might be, you know, reality. Brady's over here. So here's Brady's world. Brady has a W2 coming down here to his 1040. Everybody makes sense. He's got his little living trust down here. He's building his trifecta. And let's say he's got a little side gig. Maybe he's got a little side gig that makes 20 grand a year. Just a little side business. Alright? Now check this out. He's over here doing bitcoin btc. Now he's doing it in his own name, his own trust. It's owned or his own Social Security number, right? That's what it sounds like. Now listen, let's say he has this bitcoin. Let's make it look round, bitcoin. He borrows against it and he takes that borrowed money and takes some of it and funds a Roth ira. Could he do that? Darn right. He could even have a 401k at work and do the match. Maybe he gets a match up to five grand. So he puts in his five grand and they do the match. Well, how much can he put in a 401k in a given year? 19 5. So he can put 195 in a 401k. But he only put 5 in the company match doesn't count towards the 19, 5. So he can do 14,500 more. Now check this out everybody. This is sweet. I just got tingles. I'm excited. So he's got a side gig. Let's say it's a little llc, not even an S corp. That's cool. Can he open a solo 401k? Yes, he could open a solo 401k sponsored by his side gig. Can you have two 401ks? Yeah, he can have two 401ks one is his day job, where he gets a match of five grand. But now he's going to borrow money from his bitcoin fund, his Roth, and he's going to borrow some more, put it in his side gig as a contribution, which he can do, and fund his solo 401k. What's the difference? 19, 5 minus 5 grand. He can do another 14,500. That could be Roth. Then he's got his 6 grand here in Roth. He's now got $20,500 in a Roth. Put that in a little bucket. And then over here, he's got 10 grand in this bucket at work. You guys see that? Okay, now this is good. I think Brady's gonna like this. So Brady's got bitcoin, and it's in his own name. Nothing we can do about that. He's sitting on it. I can't move that into a Roth. But he can borrow against the bitcoin to buy ethereum, Litecoin. Doge. Is it Doge or Doge? Doge. Doge. Doge. Okay. He's gonna buy dogecoin, Ethereum, litecoin. He could have a solo 401k. He could have. Look at this. He now has three buckets of money. He borrowed from his bitcoin to fund the Roth. He borrowed from the bitcoin to fund the solo. 401k. Both of these buy more bitcoin. But he'll never pay tax on that bitcoin. That bitcoin is down in his retirement accounts, his day job. They're gonna let him buy some stupid ETF or stock, whatever. But over here, the interest that he earns might be able to pay off the interest on the loan. And it's a neutral. Right? That's what you're trying to do, Brady. You're trying to make this loan and. Interesting. Neutral, but use the money to build another bitcoin bucket. Boom. That's kind of fun. I've never taught that one, Max. Right? That's new. That could work. All right, who am I talking to next? Should we do an Instagram? One more Instagram.
