The U.S. Securities and Exchange Commission (SEC) has recently announced a delay in its decision regarding the Global X Bitcoin Trust's application to list a spot bitcoin exchange-traded fund (ETF). This delay, which took place on November 17, 2023, adds to the ongoing uncertainty surrounding the spot bitcoin ETF space.
The Global X Bitcoin Trust
The Global X Bitcoin Trust aims to provide investors with exposure to bitcoin (BTC) through an ETF structure, potentially expanding the appeal of this crypto asset to a wider investor base. Initially filed by the Cboe BZX Exchange on August 4, 2023, the proposal seeks to list and trade shares of the trust under the exchange's commodity-based trust shares rules.
SEC's Rationale for the Delay
In its order, the SEC explained its decision to delay, citing the need for further analysis to determine whether the proposed ETF aligns with the requirements of the Securities Exchange Act. The commission is particularly concerned with assessing the proposal's consistency with the Act's mandates, including the prevention of fraudulent and manipulative acts, as well as the protection of investors and the public interest.
Concerns about BTC Market Liquidity and Transparency
The SEC's main concerns revolve around the liquidity and transparency of the BTC market and its susceptibility to manipulation. To address these concerns, the commission is seeking additional public input and conducting a thorough assessment of the issues at hand. The SEC has asked the public to provide their views on whether they agree with the exchange's statements regarding the bitcoin market's resistance to price manipulation.
Reviewing the Proposal's Structure and Safeguards
As part of its review, the SEC is evaluating the sufficiency of the exchange's statements supporting the proposal, as well as the overall structure and safeguards of the Global X Bitcoin Trust. The trust's objective is to replicate the performance of bitcoin's price, with the trust's operational expenses deducted. Its primary assets will consist of BTC held by its custodian. The SEC is also scrutinizing the trust's unique mechanism of "in-kind" transactions for selling or redeeming shares.
Delay Does Not Indicate Final Disapproval
It is important to note that the SEC's decision to delay does not necessarily indicate a final disapproval of the Global X Bitcoin Trust's spot bitcoin ETF. The regulator is actively seeking public comments on the proposal and encourages interested parties to submit their views, data, and arguments. The SEC has a 35-day timeframe to reconsider the Global X filing, during which the public can continue to provide comments.
The SEC's delay in deciding on the Global X spot bitcoin ETF reflects the ongoing uncertainty and cautious approach towards this emerging investment product. As the commission continues to evaluate the proposal and gather public input, the future of a spot bitcoin ETF remains uncertain. Investors and industry participants will need to closely monitor any developments in this space and stay informed about the SEC's ultimate decision.
What are your thoughts on the SEC's decision to delay the Global X spot bitcoin ETF? Feel free to share your opinions and perspectives in the comments section below.
Frequently Asked Questions
What are the pros & 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. An IRA is a good choice for those who want a way to save some money but don’t want the tax. This type of investment has its downsides.
You could lose all of your accumulated money if you take out too much from your IRA. You might also not be able to withdraw from your IRA until the IRS deems you to be 59 1/2. If you do decide to withdraw funds from your IRA, you'll likely need to pay a penalty fee.
You will also need to pay fees for managing your IRA. Many banks charge between 0.5% and 2.0% per year. Other providers may charge monthly management fees, ranging between $10 and $50.
Insurance will be required if you would like to keep your cash out of banks. Many insurers require that you own at least one ounce of gold before you can make a claim. You may be required by some insurers to purchase insurance that covers losses as high as $500,000.
If you choose to go with a gold IRA, you'll need to determine how much gold you want to use. Some providers limit the amount of gold that you are allowed to own. Others allow you to pick your weight.
You'll also need to decide whether to buy physical gold or futures contracts. The price of physical gold is higher than that of gold futures. Futures contracts, however, allow for greater flexibility in buying gold. Futures contracts allow you to create a contract with a specified expiration date.
You will also have to decide which type of insurance coverage is best for you. The standard policy does not include theft protection or loss caused by fire, flood, earthquake. However, it does cover damage caused by natural disasters. If you live in a high-risk area, you may want to add additional coverage.
Apart from insurance, you should consider the costs of storing your precious metals. Insurance won't cover storage costs. Safekeeping costs can be as high as $25-40 per month at most banks.
Before you can open a gold IRA you need to contact a qualified Custodian. A custodian maintains track of all your investments and ensures you are in compliance with federal regulations. Custodians aren't allowed to sell your assets. Instead, they must hold them as long as you request.
Once you've chosen the best type of IRA for you, you need to fill in paperwork describing your goals. The plan should contain information about the types of investments you wish to make such as stocks, bonds or mutual funds. Also, you should specify how much each month you plan to invest.
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.
When opening a gold IRA, you should consider using a financial planner. A financial planner can help you decide the type of IRA that is right for your needs. They can help you find cheaper insurance options to lower your costs.
Is it possible to hold a gold ETF within a Roth IRA
A 401(k) plan may not offer this option, but you should consider other options, such as an Individual Retirement Account (IRA).
An IRA traditional allows both employees and employers to contribute. You can also invest in publicly traded businesses by creating an Employee Stock Ownership Plan (ESOP).
An ESOP offers tax benefits because employees can share in the company stock and any profits that it generates. The money invested in the ESOP is then taxed at lower rates than if it were held directly in the hands of the employee.
Also available is an Individual Retirement Annuity. An IRA allows for you to make regular income payments during your life. Contributions to IRAs will not be taxed
How much are gold IRA fees?
An Individual Retirement Account (IRA) fee is $6 per month. This includes account maintenance and any investment costs.
Diversifying your portfolio may require you to pay additional fees. The type of IRA you choose will determine the fees. Some companies offer free check accounts, but charge monthly fee for IRA accounts.
In addition, most providers charge annual management fees. These fees range from 0% to 1%. The average rate is.25% each year. These rates are often waived if a broker like TD Ameritrade is used.
How much tax is gold subject to in an IRA
The tax on the sale of gold is based on its fair market value when sold. Gold is not subject to tax when it's purchased. It is not income. If you decide to sell it later, there will be a taxable gain if its price rises.
Gold can be used as collateral for loans. Lenders will seek the highest return on your assets when you borrow against them. In the case of gold, this usually means selling it. This is not always possible. They might just hold onto it. They may decide to resell it. In either case, you risk losing potential profits.
To avoid losing money, only lend against gold if you intend to use it for collateral. Otherwise, it's better to leave it alone.
Do You Need to Open a Precious Metal IRA
Precious metals are not insured. This is the most important fact to know before you open an IRA account. You cannot recover any money you have invested. This includes investments that have been damaged by fire, flooding, theft, and so on.
You can protect yourself against such losses by purchasing physical gold and silver coins. These items can be lost because they have real value and have been around for thousands years. If you were to sell them today, you would likely receive more than what you paid for them when they were first minted.
If you decide to open an IRA account, choose a reputable company that offers competitive rates and 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.
When you open an account, keep in mind that you won't receive any returns until your retirement. Do not forget about the future!
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. If you are unsure of which option to invest in, consider both.
In addition to being a safe investment, gold also offers potential returns. Retirees will find it an attractive investment.
Most investments have fixed returns, but gold's volatility is what makes it unique. Its value fluctuates over time.
However, it doesn't necessarily mean that you shouldn't invest your money in gold. It just means that you need to factor in fluctuations to your overall portfolio.
Another advantage of gold is its tangible nature. Unlike stocks and bonds, gold is easier to store. It can also be transported.
You can always access your gold if it is stored in a secure place. You don't have to pay storage fees for physical gold.
Investing in gold can help protect against inflation. Gold prices are likely to rise with other commodities so it is a good way of protecting against rising costs.
Additionally, it will be a benefit to have some of your savings invested into something that won't lose value. Gold usually rises when stocks fall.
Another advantage to investing in gold is the ability to sell it whenever you wish. You can easily liquidate your investment, just as with stocks. You don't even need to wait for your retirement.
If you do decide to invest in gold, make sure to diversify your holdings. You shouldn't try to put all of your eggs into one basket.
You shouldn't buy too little at once. Begin by buying a few grams. Then add more as needed.
Remember, the goal here isn't to get rich quickly. Instead, the goal is to accumulate enough wealth that you don't have to rely on Social Security.
And while gold might not be the best investment for everyone, it could be a great supplement to any retirement plan.
What is the Performance of Gold as an Investment?
The supply and demand for gold affect the price of gold. Interest rates are also a factor.
Because of their limited supply, gold prices can fluctuate. In addition, there is a risk associated with owning physical gold because you have to store it somewhere.
- 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)
- 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)
- 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)
- Gold IRA, Add Sparkle to Your Retirement Nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
- Are You a Good Candidate for a Gold IRA
- What are the Options Types, Spreads, Example and Risk Metrics
Guidelines for Gold Roth IRA
It is best to start saving early for retirement. Start saving as soon as possible, usually at age 50. You can continue to save throughout your career. To ensure sufficient growth, it is vital that you contribute enough each year.
You also want to take advantage of tax-free opportunities such as a traditional 401(k), SEP IRA, or SIMPLE IRA. These savings vehicles enable you to make contributions while not paying any taxes on the earnings, until they are withdrawn. This makes them great options for people who don't have access to employer matching funds.
It is important to save consistently over time. You may not be eligible for any tax benefits if your contribution is less than the maximum allowed.
By: Jamie Redman
Title: SEC Delays Decision on Global X Bitcoin Trust's Spot Bitcoin ETF
Sourced From: news.bitcoin.com/sec-postpones-verdict-on-global-x-spot-bitcoin-etf-cites-market-manipulation-concerns-and-need-for-public-insight/
Published Date: Sat, 18 Nov 2023 19:00:28 +0000