U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler has advised investors to be cautious when considering crypto investments. His advice followed a series of warnings he issued the day before regarding the risks of crypto investing. The SEC is expected to green-light multiple spot bitcoin exchange-traded funds (ETFs) on Wednesday.
Gensler's Warning to Crypto Investors
The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, released another statement regarding crypto investing Tuesday, amid market expectations of imminent approval for spot bitcoin exchange-traded funds (ETFs).
In a post on social media platform X, Gensler urged investors to be cautious if they are considering an investment involving crypto assets. He warned: "Crypto asset securities may be marketed as new investment opportunities but there are serious risks involved."
SEC's Office of Investor Education and Advocacy Article
The SEC chairman posted a link to an article by Lori Schock, Director of the SEC's Office of Investor Education and Advocacy, titled "Thinking About Buying the Latest New Cryptocurrency or Token?"
The article highlights various risks associated with crypto investing, along with offering advice on what investors should do. One piece of advice is "Don't fall for high-pressure sales tactics, the promise of guaranteed returns or too good to be true claims." The director noted:
"Cryptocurrencies may be today's shiny, new opportunity but there are serious risks involved. Proceed with caution, do your research, evaluate your financial goals and most importantly, don't flip a coin when you're making investment decisions."
Continued Warnings and Caution
Gensler's statements about crypto investing on Tuesday mark the second consecutive day of addressing the matter. On Monday, he warned about various risks associated with crypto investing, and over the weekend, the SEC cautioned investors against succumbing to the fear of missing out (FOMO).
Prelude to Imminent Spot Bitcoin ETF Approval?
Gensler issuing statements on crypto twice this week has fueled optimism surrounding the imminent approval of spot bitcoin ETFs by the SEC. A decision is anticipated on Wednesday, the deadline for the joint proposal by Cathie Wood's Ark Invest and 21shares.
Fox Business reporter Charles Gasparino shared on social media platform X on Tuesday:
"Top securities lawyers who deal with the SEC believe Gary Gensler's recent crypto warnings are a prelude to the imminent 'spot' BTC ETF approval."
One lawyer reportedly explained to the reporter: "There are no more SEC impediments to approval – SEC is a disclosure-based and process-based regulator – risks are now known and trading processes are adequate but you are warned – risks are super high and processes outside [the] U.S. cannot be policed."
Unauthorized ETF Approval Announcement
On Tuesday evening, the official SEC account on X announced that the securities regulator has approved spot bitcoin ETFs. However, a moment later, Gensler posted on X that the ETF approval post was unauthorized, stating that the agency's social media account was compromised.
Gary Gensler's repeated warnings and cautionary statements about crypto investing have drawn attention to the risks involved. While the SEC is expected to make a decision on spot bitcoin ETFs soon, investors are reminded to proceed with caution and conduct thorough research before making any investment decisions in the crypto market.
Frequently Asked Questions
How does a gold IRA account work?
For people who are looking to invest in precious materials, Gold Ira account accounts provide tax-free investments.
You can purchase gold bullion coins in physical form at any moment. To invest in gold, you don't need to wait for retirement.
An IRA lets you keep your gold for life. When you die, your gold assets won't be subjected to taxes.
Your heirs inherit your gold without paying capital gains taxes. Your gold is not part of your estate and you don't have to include it in the final estate report.
To open a gold IRA, you will first need to create an individual retirement account (IRA). After you have done this, an IRA custodian will be assigned to you. This company acts as a middleman between you and the IRS.
Your gold IRA Custodian will manage the paperwork and submit all necessary forms to IRS. This includes filing annual reporting.
Once your gold IRA is established, you can purchase gold bullion coins. Minimum deposit required is $1,000 However, you'll receive a higher interest rate if you put in more.
Taxes will apply to gold that you take out of an IRA. You will be liable for income taxes and penalties if you take the entire amount.
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.
It's best not to take out more 50% of your total IRA investments each year. You'll be facing severe financial consequences if you do.
Should You Invest in gold for Retirement?
It depends on how much you have saved and if gold was available at the time you started saving. You can invest in both options if you aren't sure which option is best for you.
Gold offers potential returns and is therefore a safe investment. Retirees will find it an attractive investment.
Although most investments promise a fixed rate of return, gold is more volatile than others. This causes its value to fluctuate over time.
This does not mean you shouldn’t invest in gold. This just means you need to account for fluctuations in your overall portfolio.
Another benefit to gold is its tangible value. Gold is much easier to store than bonds and stocks. It is also easily portable.
You can always access your gold if it is stored in a secure place. Plus, there are no storage fees associated with holding physical gold.
Investing in gold can help protect against inflation. It's a great way to hedge against rising prices, as gold prices tend to increase along with other commodities.
Additionally, it will be a benefit to have some of your savings invested into something that won't lose value. When the stock market drops, gold usually rises instead.
Another benefit to investing in gold? You can always sell it. Just like stocks, you can liquidate your position whenever you need cash. You don’t even need to wait until retirement to liquidate your position.
If you do decide to invest in gold, make sure to diversify your holdings. Don't put all of your eggs in one basket.
You shouldn't buy too little at once. Start by purchasing a few ounces. Next, add more as required.
Keep in mind that the goal is not to quickly become wealthy. Rather, it's to build up enough wealth so you won't need to rely on Social Security benefits.
And while gold might not be the best investment for everyone, it could be a great supplement to any retirement plan.
What proportion of your portfolio should you have in precious metals
To answer this question we need to first define precious metals. Precious Metals are elements that have a very high relative value to other commodities. This makes them valuable in investment and trading. Gold is by far the most common precious metal traded today.
There are many other precious metals, such as silver and platinum. The price of gold fluctuates, but it generally remains stable during times of economic turmoil. It is also unaffected significantly by inflation and Deflation.
As a general rule, the prices for all precious metals tend to increase with the overall market. But they don't always move in tandem with one another. When the economy is in trouble, for example, gold prices tend to rise while other precious metals fall. This is because investors expect lower rates of interest, which makes bonds less attractive investments.
In contrast, when the economy is strong, the opposite effect occurs. Investors choose safe assets such Treasury Bonds over precious metals. They are more rare, so they become more expensive and less valuable.
To maximize your profits when investing in precious metals, diversify across different precious metals. Additionally, since the prices of precious metals tend to rise and fall together, it's best to invest in several different types of precious metals rather than just focusing on one type.
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (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)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- (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)
- Gold IRA, Add Sparkle to Your Retirement Nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
Tips for Investing Gold
Investing in Gold remains one of the most preferred investment strategies. This is due to the many benefits of investing in gold. There are many ways you can invest in gold. Some people buy physical gold coins, while others prefer investing in gold ETFs (Exchange Traded Funds).
Before you buy any type of gold, there are some things that you should think about.
- First, you must check whether your country allows you to own gold. If your country allows you to own gold, then you are allowed to proceed. You can also look at buying gold abroad.
- You should also know the type of gold coin that you desire. There are many options for gold coins: yellow, white, and rose.
- You should also consider the price of gold. It is best to start small and work your way up. You should diversify your portfolio when buying gold. Diversifying assets should include stocks, bonds real estate mutual funds and commodities.
- Don't forget to keep in mind that gold prices often change. It is important to stay up-to-date with the latest trends.
By: Kevin Helms
Title: Gary Gensler's Advice to Crypto Investors: SEC Chairman Urges Caution
Sourced From: news.bitcoin.com/sec-chair-gary-gensler-issues-crypto-investing-advice-lawyers-see-as-prelude-to-spot-bitcoin-etf-approval/
Published Date: Wed, 10 Jan 2024 02:00:55 +0000