Spot Bitcoin ETF Warnings by Former SEC Official
Former U.S. Securities and Exchange Commission (SEC) official John Reed Stark has issued a strong warning about spot bitcoin exchange-traded funds (ETFs). In a post on social media platform X, Stark, who is currently the president of cybersecurity firm John Reed Stark Consulting, expressed his skepticism and cautioned against the approval of spot bitcoin ETFs.
Stark, who served as the chief of the SEC Office of Internet Enforcement for 11 years and was an SEC enforcement attorney for 15 years, stated that the idea of a bitcoin spot ETF is laughable. He believes that approving such ETFs would create another Wall Street fee-sucking investor scam, which he considers to be of epic proportions. Furthermore, he argues that a bitcoin spot ETF would be the most centralized crypto contraption imaginable.
SEC's Review of Spot Bitcoin ETF Applications
The SEC is currently reviewing 13 applications for spot bitcoin ETFs. Recent reports suggest that the regulator met with several applicants and requested them to file amendments to their filings by the end of the week. Additionally, the SEC has asked the applicants to consider using the cash-creation method instead of the in-kind creation method.
Blackrock, the world's largest asset manager, initially advocated for the in-kind model but failed to convince the SEC. The firm has now switched to the cash method, as indicated in its latest filing.
Stark's Opinion on the Approval of Spot Bitcoin ETFs
Based on his experience and recent discussions between SEC officials and spot bitcoin ETF issuers, Stark believes that the approval of some form of bitcoin spot ETF is likely. He finds it surprising that the approval of a bitcoin spot ETF may become a significant part of SEC Chair Gary Gensler's legacy. Stark, like many in the cryptocurrency community, sees this as a reversal of expectations.
In conclusion, the statements made by former SEC internet enforcement chief John Reed Stark raise concerns about the potential risks associated with spot bitcoin ETFs. The ongoing review by the SEC and the debates surrounding the cash-creation method indicate that the decision on these ETFs is still pending.
Frequently Asked Questions
Is gold a good choice for an investment IRA?
If you are looking for a way to save money, gold is a great investment. You can diversify your portfolio with gold. There's more to gold that meets the eye.
It has been used throughout the history of currency and remains a popular payment method. It is often called “the oldest currency in the world.”
But gold is mined from the earth, unlike paper currencies that governments create. It is very valuable, as it is rare and hard to create.
The supply-demand relationship determines the gold price. When the economy is strong, people tend to spend more money, which means fewer people mine gold. This results in gold prices rising.
The flip side is that people tend to save money when the economy slows. This increases the production of gold, which in turn drives down its value.
This is why it makes sense to invest in gold for individuals and companies. You'll reap the benefits of investing in gold when the economy grows.
Additionally, you'll earn interest on your investments which will help you grow your wealth. You won't lose your money if gold prices drop.
Is physical gold allowed in an IRA.
Gold is money, not just paper currency or coinage. It's an asset that people have used for thousands of years as a store of value, a way to keep wealth safe from inflation and economic uncertainty. Today, investors invest in gold as part a diversified portfolio. This is because gold tends do better in financial turmoil.
Many Americans are now more inclined to invest in precious metals like gold and silver than stocks or bonds. Although owning gold does not guarantee that you will make money investing in it, there are many reasons to consider adding gold into your retirement portfolio.
Another reason is that gold has historically outperformed other assets in financial panic periods. Gold prices rose nearly 100 percent between August 2011 and early 2013, while the S&P 500 fell 21 percent over the same period. During these turbulent market times, gold was among few assets that outperformed the stocks.
Gold is one of the few assets that has virtually no counterparty risks. Your shares will still be yours even if your stock portfolio drops. You can still own your gold even if the company where you invested fails to pay its debt.
Finally, gold provides liquidity. This means that you can sell gold anytime, regardless of whether or not another buyer is available. The liquidity of gold makes it a good investment. This allows you take advantage of the short-term fluctuations that occur in the gold markets.
Can the government steal your gold?
You own your gold and therefore the government cannot seize it. You earned it through hard work. It belongs entirely to you. However, there may be some exceptions to this rule. You can lose your gold if you have been convicted for fraud against the federal governments. You can also lose precious metals if you owe taxes. You can keep your gold even if your taxes are not paid.
What Should Your IRA Include in Precious Metals?
It is important to remember that precious metals can be a good investment for anyone. You don't have to be rich to invest in them. In fact, there are many ways to make money from gold and silver investments without spending much money.
You might think about buying physical coins such a bullion bar or round. Also, you could buy shares in companies producing precious metals. Your retirement plan provider may offer an IRA rollingover program.
You will still reap the benefits of owning precious metals, regardless of which option you choose. These metals are not stocks, but they can still provide long-term growth.
And, unlike traditional investments, their prices tend to rise over time. If you decide to make a sale of your investment in the future, you will likely realize more profit than with traditional investments.
What is the tax on gold in an IRA
The fair market price of gold when it is sold determines the tax due on its sale. If you buy gold, there are no taxes. It is not income. If you sell it later, you'll have a taxable gain if the price goes up.
Loans can be secured with gold. Lenders try to maximize the return on loans that you take against your assets. This often means selling gold. It's not guaranteed that the lender will do it. They might just hold onto it. They might decide to sell it. The bottom line is that you could lose potential profit in any case.
To avoid losing money, only lend against gold if you intend to use it for collateral. If you don't plan to use it as collateral, it is better to let it be.
Is buying gold a good option for retirement planning?
While buying gold as an investment may seem unattractive at first glance it becomes worth the effort when you consider how much gold is consumed worldwide each year.
Physical bullion is the most popular method of investing in gold. There are other ways to invest gold. You should research all options thoroughly before making a decision on which option you prefer.
If you don't want to keep your wealth safe, buying shares in companies that extract gold and mining equipment could be a better choice. Owning gold stocks should work well if you need cash flow from your investment.
You can also put your money in exchange traded funds (ETFs). These funds allow you to be exposed to the price and value of gold by holding gold related securities. These ETFs may include stocks that are owned by gold miners or precious metals refining companies as well as commodity trading firms.
Statistics
- (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)
- 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)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
External Links
law.cornell.edu
- 7 U.S. Code SS7 – Designation of boards for trade as contract markets
- 26 U.S. Code SS 408 – Individual retirement plans
forbes.com
finance.yahoo.com
wsj.com
- Saddam Hussein's Invasion Helped Uncage a Bear In 1990 – WSJ
- Want to Keep Gold in Your IRA at Home? It's Not Exactly Lawful – WSJ
How To
The History of Gold as an Asset
From the beginning of history, gold was a popular currency. It was accepted worldwide and became popular due to its durability, purity, divisibility, uniformity, scarcity, and beauty. Aside from its inherent value, it could be traded internationally. Different weights and measurements existed around the world, however, because there were not international standards to measure gold. For example in England, a pound sterling equals 24 carats. In France, a livre tournois equals 25. Carats of golden. Germany had one mark which equals 28. Carats.
In the 1860s, the United States began to issue American coins made from 90% copper, 10% Zinc, and 0.942 Fine Gold. This caused a drop in foreign currency demand which resulted in an increase of their prices. The United States began minting large quantities gold coins at this time, which led to a drop in the price. The U.S. government needed to find a solution to their debt because there was too much money in circulation. They sold some of their excess gold to Europe to pay off the debt.
Many European countries didn't trust the U.S. dollars and started to accept gold for payment. However, many European nations stopped using gold to pay after World War I and started using paper currency instead. Since then, the price of gold has increased significantly. Today, although the price fluctuates, gold remains one of the safest investments you can make.
—————————————————————————————————————————————————————————————–
By: Kevin Helms
Title: Former SEC Official Warns Spot Bitcoin ETFs Will Create ‘Wall Street Fee-Sucking Scam of Epic Proportions'
Sourced From: news.bitcoin.com/former-sec-official-warns-spot-bitcoin-etfs-will-create-wall-street-fee-sucking-scam-of-epic-proportions/
Published Date: Thu, 28 Dec 2023 00:30:10 +0000
Related posts:
Finance Professor Advocates for In-Kind Model for Spot Bitcoin ETFs, Criticizes SEC’s Cash-Only Rule
Blackrock Outlines Why SEC ‘Must’ Approve Spot Ethereum ETFs
SEC Provides Guidance on Spot Bitcoin ETFs, Encourages Cash Creation Method
Grayscale Investments Engages with SEC on Bitcoin ETF Application
