Will SEC Reject Spot Bitcoin ETF Applications?
Concerns are growing within the crypto community following a letter from Better Markets, a financial watchdog group, urging the U.S. Securities and Exchange Commission (SEC) to reject spot bitcoin exchange-traded funds (ETFs).
The group argues that the SEC has a legal obligation to deny these applications, warning of potential "financial carnage" and "massive investor harm" if spot bitcoin ETFs are approved. Notably, the group features Senator Elizabeth Warren (D-MA) as a top testimonial on its website, and its CEO reportedly has a close relationship with SEC Chairman Gary Gensler.
Bloomberg analyst Eric Balchunas weighed in on the situation, offering his analysis in response to speculation that the SEC may "rug pull" the spot bitcoin ETFs. Balchunas clarified that the SEC has never voted on any bitcoin ETFs, whether for spot bitcoin ETF rejections or bitcoin futures approvals. Instead, these decisions have been made through the "Delegated Authority" method. Balchunas emphasized that this method would likely be used for spot bitcoin ETFs as well, given the nature of the initiative.
Balchunas also highlighted that if the SEC were to vote, they would need to publicly schedule a meeting, and the upcoming meeting on January 11th would be too late for the proposed January 11th launch date. Therefore, it is unlikely that a vote will take place.
The SEC has until January 10th to make a decision on the joint proposal from Cathie Wood's Ark Invest and 21shares for a spot bitcoin ETF. Balchunas further noted that it is hard to imagine SEC Chairman Gary Gensler voting against the approval since he personally directed the SEC staff to work extensively with spot bitcoin ETF issuers. Gensler's involvement in the process suggests a favorable stance towards approval.
Despite these factors, Balchunas emphasized that certainty of approval cannot be reached until the SEC makes an official announcement. He compared the situation to sports predictions, where even if a team has a high chance of winning, certainty is only achieved when the game is over.
The SEC is expected to make a decision on spot bitcoin ETFs early next week. According to multiple sources, final S-1 filings are due on Monday at 8 a.m., indicating that the SEC is aiming to align the launch of spot bitcoin ETFs for January 11th.
Do you think the SEC will reject spot bitcoin ETFs? Let us know in the comments section below.
Frequently Asked Questions
What is the value of a gold IRA
A gold IRA has many benefits. It is an investment vehicle that can diversify your portfolio. You decide how much money is put in each account and when it is withdrawn.
Another option is to rollover funds from another retirement account into a IRA with gold. This is a great way to make a smooth transition if you want to retire earlier.
The best thing about investing in gold IRAs is that you don’t need any special skills. They're available at most banks and brokerage firms. You don't have to worry about penalties or fees when withdrawing money.
That said, there are drawbacks too. The volatility of gold has been a hallmark of its history. It's important to understand the reasons you're considering investing in gold. Is it for growth or safety? Are you trying to find safety or growth? Only by knowing the answer, you will be able to make an informed choice.
If you plan to keep your gold IRA indefinitely, you'll probably want to consider buying more than one ounce of gold. You won't need to buy more than one ounce of gold to cover all your needs. Depending upon what you plan to do, you could need several ounces.
You don't need to have a lot of gold if you are selling it. You can even manage with one ounce. But, those funds will not allow you to buy anything.
What are the pros and cons of a gold IRA?
An Individual Retirement Plan (IRA) has a major advantage over regular savings accounts. It doesn't tax any interest earned. This makes an IRA great for people who want to save money but don't want to pay tax on the interest they earn. However, there are also disadvantages to this type of investment.
If you withdraw too many funds from your IRA at once, you may lose all your accumulated assets. The IRS may prevent you from taking out your IRA funds until you reach 59 1/2. You will likely have to pay a penalty fee if you withdraw funds from an IRA.
The downside is that managing your IRA requires fees. Many banks charge between 0.5% and 2.0% per year. Other providers charge monthly management charges ranging anywhere from $10 to $50.
Insurance will be required if you would like to keep your cash out of banks. In order to make a claim, most insurers will require that you have a minimum amount in gold. You may be required by some insurers to purchase insurance that covers losses as high as $500,000.
If you are considering a Gold IRA, you need to first decide how much of it you would like to use. Some providers limit the amount of gold that you are allowed to own. Some providers allow you to choose your weight.
It's also important to decide whether or not to buy gold futures contracts. Futures contracts for gold are less expensive than physical gold. However, futures contracts give you flexibility when buying gold. You can set up futures contracts with a fixed expiration date.
You also need to decide the type and level of insurance coverage you want. The standard policy doesn’t provide theft protection or loss due fire, flood, or earthquake. It does provide coverage for damage from natural disasters, however. You might consider purchasing additional coverage if your area is at high risk.
Additional to your insurance, you will need to consider how much it costs to store your gold. Storage costs are not covered by insurance. For safekeeping, banks typically charge $25-40 per month.
To open a IRA in gold, you will need to first speak with a qualified custodian. A custodian keeps track of your investments and ensures that you comply with federal regulations. Custodians don't have the right to sell assets. Instead, they must maintain them for as long a time as you request.
After you've determined which type of IRA is best for you, fill out the paperwork indicating your goals. Information about your investments such as stocks and bonds, mutual fund, or real property should be included in your plan. It is also important to specify how much money you will invest each month.
After completing the forms, send them along with a check or a small deposit to your chosen provider. Once the company has received your application, they will review it and send you a confirmation email.
Consider consulting a financial advisor when opening a golden IRA. A financial planner can help you decide the type of IRA that is right for your needs. They can also help you lower your expenses by finding cheaper alternatives to purchasing insurance.
Should you open a Precious Metal IRA
The most important thing you should know before opening an IRA account is that precious metals are not covered by insurance. You cannot recover any money you have invested. This includes losing all your investments due to theft, fire, flood, etc.
Investing in physical gold and silver coins is the best way to protect yourself from this type of loss. These items are timeless and have a lifetime value. You would probably get more if you sold them today than you paid when they were first created.
When opening an IRA account, make sure you choose a reputable company offering competitive rates and high-quality products. It's also wise to consider using a third-party custodian who will keep your assets safe while giving you access to them anytime.
Do not open an account unless you're ready to retire. Do not forget about the future!
How much tax is gold subject to in an IRA
The fair market value of gold sold is the basis for tax. You don't pay taxes when you buy gold. It isn't considered income. If you sell it later, you'll have a taxable gain if the price goes up.
You can use gold as collateral to secure loans. Lenders try to maximize the return on loans that you take against your assets. In the case of gold, this usually means selling it. This is not always possible. They may just keep it. They might decide that they want to resell it. You lose potential profits in either case.
You should not lend against your gold if it is intended to be used as collateral. It's better to keep it alone.
What is a Precious Metal IRA (IRA)?
A precious metal IRA lets you diversify your retirement savings to include gold, silver, palladium, rhodium, iridium, osmium, osmium, rhodium, iridium and other rare metallics. These precious metals are extremely rare and valuable. They are great investments for your money, and they can protect you from inflation or economic instability.
Bullion can be purchased via a variety of channels including online sellers, large coin dealers, and grocery stores.
With a precious metal IRA, you invest in bullion directly rather than purchasing shares of stock. You'll get dividends each year.
Precious metal IRAs are not like regular IRAs. They don't need paperwork and don't have to be renewed annually. Instead, you pay only a small percentage tax on your gains. You also have unlimited access to your funds whenever and wherever you wish.
How much do gold IRA fees cost?
An Individual Retirement Account (IRA) fee is $6 per month. This fee includes account maintenance fees as well as any investment costs related to your selected investments.
Diversifying your portfolio may require you to pay additional fees. These fees can vary depending on which type of IRA account you choose. Some companies offer free checking, but charge monthly fees for IRAs.
In addition, most providers charge annual management fees. These fees vary from 0% to 11%. The average rate is.25% per year. These rates are usually waived if you use a broker such as TD Ameritrade.
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- Saddam Hussein’s InvasionHelped Uncage a Bear In 1989 – WSJ
- Want to Keep Gold in Your IRA at Home? It's not exactly legal – WSJ
3 Ways To Invest in Gold For Retirement
It's crucial to understand where gold fits in your retirement strategy. There are several options to invest in precious metals if your employer has a 401k. You may also want to consider investing in gold outside of your workplace. One example is opening a custodial accounts at Fidelity Investments if an IRA (Individual Retirement Account), if you already own one. Or, if you don't already own any precious metals, you may want to consider buying them directly from a reputable dealer.
These are the rules for gold investing:
- Buy Gold With Your Cash – Do not use credit cards to purchase gold. Instead, invest in cash. This will help to keep your purchasing power high and protect you against inflation.
- Physical Gold Coins: You should own physical gold coins, not just a certificate. The reason for this is that physical gold coins are much more easily sold than certificates. You don't have to store physical gold coins.
- Diversify Your Portfolio – Never put all of your eggs in one basket. This is how you spread your wealth. You can invest in different assets. This will reduce your risk and give you more flexibility in times of market volatility.
By: Kevin Helms
Title: Concerns Mount Over Potential SEC Rejection of Spot Bitcoin ETFs, Analyst Weighs In
Sourced From: news.bitcoin.com/concerns-mount-over-potential-sec-rejection-of-spot-bitcoin-etfs-analyst-weighs-in/
Published Date: Sun, 07 Jan 2024 02:30:08 +0000