Cryptocurrencies, among the world’s most volatile assets, are searching for mainstream acceptance in the investment world. Their next target: your retirement portfolio.

Financial services companies are rolling out new products and services that allow more everyday investors to add bitcoin and other virtual currencies to their nest eggs as a way of reaching for higher returns. Some are marketed under names such as “CryptoIRA” and “BitcoinIRA.”

Interest in digital assets is “exploding,” said Tyrone Ross, chief executive of Onramp Invest LLC, which in May began selling software that more than 100 financial advisers use to monitor client investments in cryptocurrency. “Folks want bitcoin in their retirement accounts.”

It is a big new target: Investors currently have $22.5 trillion tied up in IRAs and 401(k)s. In a recent survey of more than 500 financial advisers conducted by the Financial Planning Association and two other organizations, 14% of the advisers said they use or recommend cryptocurrency, compared with fewer than 1% who said so in 2019 and 2020. This month ForUsAll Inc., a 401(k) provider that specializes in small companies, announced it will allow workers in plans it administers to invest up to 5% of their 401(k) contributions in bitcoin, ether, litecoin and others.

One investor who has already chosen digital currencies for his retirement account is Vukasin Vignjevic, 28 years old, a market researcher who lives in Maine. “I’m not opposed to traditional assets,” such as stocks, he said. “But digital assets solve a lot of the problems the world faces today,” such as bringing financial services to people without access, he said.

Mr. Vignjevic said his individual retirement account represents a small portion of his total holdings, which have “a pretty high percentage” in cryptocurrency.

Adding digital currencies to retirement accounts entails plenty of risks for the average investor, including high fees and high volatility. Bitcoin has lost about half of its value since hitting a record high in April, as China has intensified its crackdown on unregulated virtual currencies. The Securities and Exchange Commission has also warned about fraudulent schemes tied to investments in IRAs that permit alternative assets such as cryptocurrencies.

Share Your Thoughts

Would you invest your retirement savings in cryptocurrency? Why or why not? Join the conversation below.

Some industry giants aren’t making it easy to make these bets with retirement accounts, however. Many banks and brokerage firms, including Charles Schwab Corp. and Fidelity Investments, primarily limit IRA investors to stocks, bonds, funds and certificates of deposit. Everyday investors at Schwab and Fidelity cannot purchase cryptocurrency but can buy shares in trusts that invest in them.

One digital investing company, Betterment, is “actively exploring” offering cryptocurrency in IRAs and taxable accounts in “a way that enables clients to do it in a responsible, advised manner,” said spokesman Joe Ziemer. Betterment’s vice president of behavioral finance and investing, Dan Egan, said anything over 1% of a portfolio is “an aggressive allocation” given that cryptocurrency represents just 0.5% of the value of global stocks and bonds.

Many IRA providers that specialize in alternative investments—such as gold, real estate and private equity—are making it easier. Kingdom Trust, an IRA custodian, offers 20 cryptocurrencies in its “Choice IRA.” Roughly 10%, or $2 billion, of the $17 billion that Kingdom Trust holds for clients is in cryptocurrency, according to CEO Ryan Radloff. That is up from 2%, or $350 million, over the past 12 months.

“Our users are trading Tesla, GameStop, bitcoin, and ether,” said Mr. Radloff, 34. “We believe our clients see an opportunity to be aggressive with their retirement accounts and also trade them, not just sit there and put the money into cookie-cutter funds like our parents did.”

Clients who trade frequently often want cryptocurrency in their retirement accounts, Mr. Radloff said, since they can reinvest the profits tax-free. IRA specialist Ed Slott, however, said long-term buy-and-hold investors may be better off putting digital assets in taxable accounts because they can offset taxable gains with capital losses and pay a lower rate— provided they hold the investment for longer than a year— than retirement-account owners pay when they withdraw their assets.

The Federal Reserve is trying to figure out how to keep cash relevant in a cashless world. It’s considering digitizing the U.S. dollar, giving people money they can access on their phone and bypassing electronic payments that can be slow and costly for businesses. Illustration: Jacob Reynolds/WSJ The Wall Street Journal Interactive Edition

Fees are another consideration. While some IRA custodians such as Fidelity levy no account fees, custodians that specialize in alternative investments often charge an annual custody or account maintenance fee plus transaction fees to buy and sell.

Alternative IRA Services’ BitcoinIRA, for example, charges a $240 annual account fee and average transaction fees of 1% to sell and 5.5% to buy, according to a spokesman. Chief Operating Officer Chris Kline said BitcoinIRA users may be able to reduce or offset their fees by earning interest of up to 6% on cash and cryptocurrency holdings.

No matter where they turn, investors in cryptocurrencies should stick with IRA custodians regulated by federal or state banking authorities and carefully vet investments, said digital asset startup investor Ric Edelman, who founded advisory firm Edelman Financial Engines LLC and financial adviser education group RIA Digital Assets Council. Those who are in or near retirement should also be wary of digital currencies because their portfolios may not have time to recover from sudden losses, said Mr. Slott, the IRA specialist.

But Mr. Vignjevic, the market researcher in Maine who has been buying cryptocurrency since 2017, doesn’t sound worried. “Digital assets are very volatile,” he said, “but with a long-term perspective, I believe I will do very well.”

Write to Anne Tergesen at anne.tergesen@wsj.com