High-profile cryptocurrency failures, from bankrupt exchanges to failed tokens, have shaken investor and public confidence in recent years. But for those planning for retirement, these events offer more than cautionary tales. They highlight critical lessons about security, diversification, time horizon, and the importance of aligning risk with long-term goals.

This blog explores what cryptocurrency failures reveal about building resilient retirement plans in the digital asset era.

What do we mean by “cryptocurrency failures”?

Cryptocurrency failures aren’t limited to price crashes. They include:

1. Exchange bankruptcies (e.g., FTX, Celsius, Voyager)
2. Protocol collapses (e.g., Terra/LUNA)
3. Security breaches and smart contract exploits‍
4. Token value going to zero due to poor fundamentals or mismanagement

Each failure typically exposes one or more of the following issues: centralized risk, poor transparency, inadequate risk controls, or investor overexposure.

Note: While the crypto ecosystem evolves, structural vulnerabilities can still affect even legitimate projects or platforms.

These events emphasize the need for thoughtful risk allocation—especially when crypto is part of a retirement portfolio.

Why long-term investors must think differently about risk

Retirement investors operate on multi-decade time horizons. This requires a mindset shift: not every asset that performs well in the short term is suitable for long-term wealth preservation.

Key considerations include:

1. Volatility tolerance: Crypto prices can swing >50% in short periods, which can hurt portfolios close to retirement
2. Liquidity risks: Some tokens or platforms may freeze withdrawals or face regulatory action
3. Custody controls: Personal wallets may offer full control, but IRAs require regulated custodians for compliance

Note: Retirement planning is not just about returns; it is also about maintaining financial stability and staying on track over time.

Learning from crypto failures means avoiding concentrated risks and embracing structured diversification.

Lessons from crypto failures that apply to retirement planning

Several key principles emerge from past failures that can help inform retirement strategy:

Note: Even diversified investors may be impacted by systemic risks, which is why risk-aware frameworks matter.

These principles align with the growing role of regulated vehicles like crypto IRAs.

How IRAs can mitigate certain risks

A self-directed IRA doesn’t eliminate the risks of crypto exposure, but it adds structural safeguards:

• Qualified custodians are required to hold assets, and qualified custodians may reduce some operational risks, potentially reducing the risk of loss from exchange shutdowns
• Tax-advantaged structure helps shield gains from ongoing tax liability
• Separation from personal wallets reduces compliance violations and disqualified transaction risk

However, IRA-held crypto is still exposed to market volatility, and investors must choose providers carefully.

Note: Due diligence on custody partners, platform reputation, and regulatory compliance is still essential, even in retirement accounts.

Getting started with crypto IRAs with Alto

Alto is a leading self-directed IRA platform for alternative investments like cryptocurrencies. Alto offers both types of crypto IRAs discussed in this article: Traditional crypto IRA and Roth crypto IRA.

Reasons to choose Alto for your crypto IRA

1. Accessibility and affordability Alto makes crypto retirement investing accessible with a $10 minimum investment and a transparent 1% trading fee. With no monthly maintenance or setup fees, more of your money goes directly into building your retirement portfolio through cryptocurrency investments.

2. Broad investment options The Alto CryptoIRA® provides access to more than 250+ cryptocurrencies through its integration with Coinbase, allowing investors to diversify their retirement portfolios with a wide range of digital assets.

3. Enterprise-grade security Alto partners with Coinbase to provide secure storage solutions for your cryptocurrency investments, ensuring institutional-grade security for your assets. 

4. User-focused platform Take control of your crypto retirement investing with Alto’s intuitive platform, designed for accessibility and convenience. With 24/7 trading, you can act on market opportunities in real-time, ensuring your portfolio remains dynamic and responsive. Alto's mobile app makes managing your investments even easier, putting your retirement strategy at your fingertips—anytime, anywhere. Plus, our comprehensive educational resources and dedicated support team provide the assistance you need, from account setup to ongoing portfolio management.

5. Tax-advantaged options

Choose between traditional and Roth crypto IRAs to align with your tax strategy, with flexible funding options including transfers and rollovers. SEP IRAs are also available for self-employed individuals.

Creating a crypto IRA account on Alto

• Visit Alto and sign in with your email and password.
• Verify your email and click "Begin Verification" to input your personal information.
• Select traditional or Roth Alto CryptoIRA® 
• Provide your phone number, review your details, and e-sign your name in the designated field.
• Click “Create my Alto CryptoIRA® ” to complete the process and start funding your account.

Fund your account

You can fund your Alto CryptoIRA® in three convenient ways:

• Cash contributions: Deposit funds directly from your bank account, subject to annual IRS contribution limits.
• IRA transfers: Directly move funds from an existing IRA without impacting contribution limits.
• Rollovers: Transfer funds from a 401(k) or other qualified plans into your crypto IRA.

Choose your investments

With Alto’s partnership with Coinbase, you can access over 250+ cryptocurrencies, including Bitcoin, Ethereum, Dogecoin and other emerging digital assets. 

Monitor and manage your crypto IRA

Alto’s intuitive platform makes it easy to manage your investments. Real-time trading and 24/7 access allow you to take advantage of market opportunities while benefiting from institutional-grade security.

Choosing the right crypto IRA for your future

Read more: Cryptocurrency investing for retirement with Alto CryptoIRA®

Whether you choose a traditional or Roth crypto IRA depends largely on your current financial situation and long-term retirement goals. Both options provide valuable tax advantages for cryptocurrency investors, with the primary distinction being the timing of when those tax benefits apply. 

The key is getting started, and Alto makes this process simple and accessible. With a low $10 minimum investment, access to over 250+ cryptocurrencies, and institutional-grade security, you can begin building your crypto retirement portfolio with confidence.