Former SEC Official Criticizes Spot Bitcoin ETFs
Former U.S. Securities and Exchange Commission (SEC) official, John Reed Stark, has publicly criticized spot bitcoin exchange-traded funds (ETFs) in a lengthy post on social media. Stark, who is currently the president of cybersecurity firm John Reed Stark Consulting, served as the chief of the SEC Office of Internet Enforcement for 11 years and was an SEC enforcement attorney for 15 years.
Stark's Opinion on Spot Bitcoin ETFs
In his post, Stark expressed his strong opposition to the approval and inception of a bitcoin spot ETF. He described the global crypto-marketplace as "horrifically corrupt and criminal," and the crypto-ecosystem as a "toxic speculative cocktail." He labeled spot bitcoin ETFs as a "fee-suck" and criticized the billionaire financial behemoths behind these products for designing them to benefit themselves at the expense of investors.
Cryptocurrency as a Ponzi Scheme
Stark went on to describe cryptocurrency as a "mammoth Ponzi scheme," highlighting its higher costs, complexity, and risks compared to mainstream finance. He also criticized the idea that cryptocurrency could serve as a financial solution for the unbanked, referring to it as "Predatory Inclusion" and affinity fraud targeting vulnerable individuals.
Concerns about Major Crypto Bankruptcies and Market Manipulation
The former SEC official raised concerns about the numerous major crypto bankruptcies in recent years and the issuance of Tether. He referred to a letter by Better Markets warning of potential financial carnage and massive investor losses if spot bitcoin ETFs are approved. Stark also called attention to the rampant market manipulation and fraud in the crypto industry.
The Laughable Concept of a Bitcoin Spot ETF
Stark dismissed the notion of a bitcoin spot ETF as a laughable concept. He argued that it would not only result in yet another investor scam and fee-suck but also emphasized that it would be the most centralized crypto contraption imaginable. According to Stark, market manipulation is not only prevalent in the cryptoverse but also encouraged, while fraud is not only rewarded but also taught.
What are your thoughts on John Reed Stark's warnings about spot bitcoin ETFs? Share your opinions in the comments section below.
Frequently Asked Questions
How does a gold IRA work?
Gold Ira accounts are tax-free investment vehicles for people who want to invest in precious metals.
You can purchase gold bullion coins in physical form at any moment. To start investing in gold, it doesn't matter if you are retired.
The beauty of owning gold as an IRA is you can hold on to it forever. Your gold assets will not be subjected tax upon your death.
Your heirs will inherit your gold, and not pay capital gains taxes. You don't need to include your gold in your final estate report, as it isn't part of the estate.
To open a Gold IRA, you'll need to first set up an Individual Retirement Account (IRA). After you do this, you will be granted an IRA custodian. This company acts in the role of a middleman between your IRS agent and you.
Your gold IRA custody will take care of the paperwork and send the forms to IRS. This includes filing annual reports.
After you have created your gold IRA, the only thing you need to do is purchase gold bullion. The minimum deposit is $1,000. You'll get a higher rate of interest if you deposit more.
Taxes will apply to gold that you take out of an IRA. If you take out the whole amount, you'll be subject to income taxes as well as a 10 percent penalty.
Even if your contribution is small, you might not have to pay any taxes. There are exceptions. You'll owe federal income tax and a 20% penalty if you take out more than 30% of your total IRA assets.
You should avoid taking out more than 50% of your total IRA assets yearly. You'll be facing severe financial consequences if you do.
How to Open a Precious Metal IRA
The first step is to decide if you want an Individual Retirement Account (IRA). Once you have decided to open an Individual Retirement Account (IRA), you will need to complete Form 806. You will then need to complete Form 5204 in order to determine which type IRA you are eligible. This form should be filled within 60 calendar days of opening the account. Once you have completed this form, it is possible to begin investing. You might also be able to contribute directly from the paycheck through payroll deduction.
If you opt for a Roth IRA, you must complete Form 8903. Otherwise, it will be the same process as an ordinary IRA.
To qualify for a precious Metals IRA, there are specific requirements. The IRS requires that you are at least 18 years old and have earned an income. Your earnings cannot exceed $110,000 per year ($220,000 if married and filing jointly) for any single tax year. You must also contribute regularly. These rules apply regardless of whether you are contributing directly to your paychecks or through your employer.
A precious metals IRA can be used to invest in palladium or platinum, gold, silver, palladium or rhodium. You can only purchase bullion in physical form. This means you can't trade shares of stock and bonds.
You can also use your precious metals IRA to invest directly in companies that deal in precious metals. This option can be provided by some IRA companies.
However, there are two significant drawbacks to investing in precious metals via an IRA. First, they're not as liquid as stocks or bonds. This makes them harder to sell when needed. They don't yield dividends like bonds and stocks. You'll lose your money over time, rather than making it.
What amount should I invest in my Roth IRA?
Roth IRAs allow you to deposit your money tax-free. These accounts cannot be withdrawn until you turn 59 1/2. However, if you do decide to take out some of your contributions before then, there are specific rules you must follow. You cannot touch your principal (the amount you originally deposited). No matter how much money you contribute, you cannot take out more than was originally deposited to the account. If you wish to withdraw more than you originally contributed, you will have to pay taxes.
The second rule is that you cannot withdraw your earnings without paying income taxes. When you withdraw, you will have to pay income tax. Let's assume that you contribute $5,000 each year to your Roth IRA. In addition, let's assume you earn $10,000 per year after contributing. The federal income tax on your earnings would amount to $3,500. You would have $6,500 less. Since you're limited to taking out only what you initially contributed, that's all you could take out.
So, if you were to take out $4,000 of your earnings, you'd still owe taxes on the remaining $1,500. You would also lose half of your earnings because they are subject to another 50% tax (half off 40%). So even though your Roth IRA ended up having $7,000, you only got $4,000.
There are two types: Roth IRAs that are traditional and Roth. A traditional IRA allows for you to deduct pretax contributions of your taxable income. Your traditional IRA allows you to withdraw your entire contribution plus any interest. You can withdraw as much as you want from a traditional IRA.
Roth IRAs are not allowed to allow you deductions for contributions. You can withdraw your entire contribution, plus accrued interests, after you retire. There is no minimum withdrawal limit, unlike traditional IRAs. You don’t have to wait for your turn 70 1/2 years before you can withdraw your contributions.
Are gold investments a good idea for an IRA?
Gold is an excellent investment for any person who wants to save money. You can also diversify your portfolio by investing in gold. There is much more to gold than meets your eye.
It's been used as a form of payment throughout history. It is often called “the oldest currency in the world.”
But gold, unlike paper currency, which is created by governments, is mined out from the ground. It is very valuable, as it is rare and hard to create.
Gold prices fluctuate based on demand and supply. If the economy is strong, people will spend more money which means less people can mine gold. This results in gold prices rising.
On the flip side, when the economy slows down, people hoard cash instead of spending it. This means that more gold is produced, which reduces its value.
It is this reason that gold investing makes sense for businesses and individuals. If you have gold to invest, you will reap the rewards when the economy expands.
Also, your investments will earn you interest which can help increase your wealth. In addition, you won’t lose any money if gold falls in value.
Is buying gold a good way to save money for retirement?
Although it may not look appealing at first, buying gold for investment is worth considering when you consider the global average gold consumption per year.
Physical bullion bar is the best way to invest in precious metals. There are many ways to invest your gold. It's best to thoroughly research all options before you make a decision.
If you're not looking to secure your wealth, it may be worth considering purchasing shares in mining equipment or companies that extract gold. Owning gold stocks should work well if you need cash flow from your investment.
ETFs are an exchange-traded investment that allows you to gain exposure to the market for gold. You hold gold-related securities and not actual gold. These ETFs often include stocks of gold miners, precious metals refiners, and commodity trading companies.
How much gold can you keep in your portfolio
The amount of capital that you require will determine how much money you can make. Start small with $5k-10k. As you grow, it is possible to rent desks or office space. Renting out desks and other equipment is a great way to save money on rent. Rent is only paid per month.
Also, you need to think about the type of business that you are going to run. In my case, we charge clients between $1000-2000/month, depending on what they order. So if you do this kind of thing, you need to consider how much income you expect from each client.
You won't get a monthly paycheck if you work freelance. This is because freelancers are paid. So you might only get paid once every 6 months or so.
Decide what kind of income do you want before you calculate how much gold is needed.
I suggest starting with $1k-2k gold and building from there.
Should You Purchase Gold?
Gold was once considered an investment safe haven during times of economic crisis. Many people are now turning their backs on traditional investments like stocks and bonds, and instead look to precious metals like Gold.
Although gold prices have shown an upward trend in recent years, they are still relatively low when compared to other commodities like oil and silver.
Experts think this could change quickly. They believe gold prices could increase dramatically if there is another global financial crises.
They also noted that gold is growing in popularity because of its perceived value as well as potential return.
These are some things you should consider when considering gold investing.
- The first thing to do is assess whether you actually need the money you're putting aside for retirement. It is possible to save enough money to retire without investing in gold. However, you can still save for retirement without putting your savings into gold.
- Second, you need to be clear about what you are buying before you decide to buy gold. Each offers varying levels of flexibility and security.
- Finally, remember that gold doesn't offer the same level of safety as a bank account. You may lose your gold coins and never be able to recover them.
So, if you're thinking about buying gold, make sure you do your research first. If you already have gold, make sure you protect it.
Statistics
- 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)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
External Links
finance.yahoo.com
bbb.org
investopedia.com
cftc.gov
How To
Investing in gold vs. investing in stocks
This might make it seem very risky to invest gold as an investment tool. This is because many people believe gold is no longer financially profitable. This belief is due to the fact that many people see gold prices dropping because of the global economy. They feel that gold investment would cause them to lose money. There are many benefits to investing in gold. Below we'll look at some of them.
Gold is the oldest known form of currency. It has been used for thousands of years. It was used all around the world as a reserve of value. It's still used by countries like South Africa as a method of payment.
The first point to consider when deciding whether or not you should invest in gold is what price you want to pay per gram. You must determine how much gold bullion you can afford per gram before you consider buying it. You can always ask a local jeweler what the current market rate is if you don't have it.
It's worth noting, however, that while gold prices have fallen recently the cost of producing gold is on the rise. Although gold's price has fallen, its production costs have not.
Another thing to remember when thinking about whether or not you should buy gold is the amount of gold you plan on purchasing. If you plan to buy enough gold to cover your wedding rings then it is probably a good idea to wait before buying any more. However, if you are planning on doing so for long-term investments, then it is worth considering. Profitable gold can be sold at a lower price than it was when you bought it.
We hope our article has given you a better understanding of gold as an investment tool. We recommend that you investigate all options before making any major decisions. Only after doing so can you make an informed decision.
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By: Kevin Helms
Title: Former SEC Official Blasts Spot Bitcoin ETFs, Calls Them a “Crock”
Sourced From: news.bitcoin.com/former-sec-official-blasts-spot-bitcoin-etfs-as-recipe-for-financial-ruin/
Published Date: Wed, 10 Jan 2024 05:00:25 +0000
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