Forum Topics BTC auditing for SMSFs
lowway
Added a month ago

I've just been dragged through the process of validating my cold wallet BTC holdings by my independent SMSF auditor. I use Foundation Passport as my cold wallet and did not find the ability to generate the xpub key in the least bit straight forward, and I do think I'm IT literate. Happy to share the step-by-step process if anyone else is forced to prove their transactions to an auditor for tax purposes, etc.

Seriously, there are so many reasons for just going down the ETF route instead of holding your own BTC via a cold wallet.

1. Not the least of them being bank limitations for transfers (and basically being told you're being scammed by the bank as the hard cap transfers to $10k every 30 days).

2. Plus the cost of a cold wallet ( not crazy expensive, but $300-$500).

3. The auditor issues for an SMSF as mentioned above.

4. The issues of passing on seed phrase and ownership in case of sudden death (very real after a recent family death)

5. The process of first purchasing via Bitaroo before transferring to my Foundation Passport.

6. The current inability to actually use BTC to buy much.

7. And I'm sure many more.

Funny thing is, I never purchased my BTC to use for anything other than a very long-term hedge (yes, asymmetrical bet) against a future massive value hike in BTC trading value. As I've held some shares in my various portfolios for more than 25 years, this was/is a real goal for me, subject only to my longevity on earth of course. I still want to continue holding and adding to my BTC cold wallet held by my SMSF (the best vehicle for future CGT), but it's seriously not a walk-in-the-park and I can see why the $VBTC option makes so much sense for most. Maybe I'll opt for a hybrid holding solution down the track where I combine my cold wallet with an ETF so I can try to have the best of both worlds.!!


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Bource33
Added a month ago

I’m feeling a lot of the same things @lowway. I’ve only just started my own Bitcoin accumulation journey (albeit, at a terrible time after the big drop), but like you I still believe in the long term thesis. My plan is basically to hold indefinitely or at least until we get to a point where buying day to day stuff with Bitcoin is actually normal instead of using fiat.

What I didn’t expect was how overwhelming the self custody side would feel once you start building a half decent stack. The cold wallet, managing the seed, thinking about what happens if there’s a sudden passing, and even the simple question of where to store everything safely has honestly added more stress than I thought it would.

The ETF option definitely makes sense from that angle. At the same time, I do get the idea that if you believe in Bitcoin at its core, it’s good to have at least some portion in self custody. I’m also really curious what things look like in the future if banks eventually stop treating every crypto transfer like a scam and actually integrate Bitcoin so there’s less chance of losing coins through user mistakes. I know some Bitcoiners think that defeats the purpose of self custody, but I also can’t see mainstream adoption taking off unless the whole process becomes way easier for everyday people.

So yeah, I’m in the same boat as you and can easily see myself going with a hybrid approach later on. Cold storage for the long term conviction piece and an ETF for easier management and a bit of peace of mind.

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