Investment bank TD Cowen's research team anticipates that the U.S. Securities and Exchange Commission (SEC) will approve a spot bitcoin exchange-traded fund (ETF) by the Jan. 10 deadline. The bank views this approval as a "political necessity" for the SEC to solidify its role as a crypto regulator before Congress considers broader crypto legislation.
The Need for Approval
The TD Cowen Washington Research Group, led by financial analyst Jaret Seiberg, stated in a published note that the SEC's approval of a spot bitcoin ETF is crucial from a political standpoint. The agency needs to establish its position as a crypto regulator before Congress addresses wider crypto-related regulations. Additionally, TD Cowen believes that the SEC wants to avoid losing any legal challenges to its previous refusals to approve bitcoin ETFs.
Past Legal Battle
The SEC's legal battle against Grayscale Investments serves as an example of the regulator's stance on bitcoin ETFs. Grayscale's application to convert its bitcoin trust (GBTC) into a spot bitcoin ETF was initially denied by the SEC. However, a court ruling compelled the regulator to revisit its decision. The SEC's defeat in this case highlights the importance of establishing clear guidelines for approving bitcoin ETFs.
Congress is currently reviewing various cryptocurrency-related bills. Last year, the U.S. House Financial Services Committee passed four digital asset bills, including those addressing financial innovation, blockchain regulation, stablecoins, and individual coin ownership. TD Cowen believes that there is still an opportunity for lawmakers to negotiate a comprehensive crypto market structure bill during the "lame duck" period following an election. This period, which occurs between the election and the inauguration of a new government, presents a window for the SEC to take the lead on investor protections to gain the support of the Senate and the White House.
The approval of spot bitcoin ETFs by the SEC is seen as a political necessity by TD Cowen. The bank predicts that the SEC will meet the Jan. 10 deadline for approving the ETF proposal submitted by Cathie Wood's Ark Invest and 21shares. This approval will not only solidify the SEC's role as a crypto regulator but also pave the way for broader crypto legislation to be considered by Congress. It remains to be seen whether the SEC will indeed approve spot bitcoin ETFs, but the outcome will undoubtedly shape the future of the crypto market.
Frequently Asked Questions
How is gold taxed in Roth IRA?
A tax assessment for an investment account will be based on the current market value, and not what you paid initially. If you invest $1,000 in mutual funds or stocks and then later sell them, all gains are subjected to taxes.
But if you put the money into a traditional IRA or 401(k), there's no tax when you withdraw the money. You pay taxes only on earnings from dividends and capital gains — which apply only to investments held longer than one year.
These accounts are subject to different rules depending on where you live. For example, in Maryland, you must take withdrawals within 60 days after reaching age 59 1/2 . You can delay until April 1st in Massachusetts. New York is open until 70 1/2. To avoid penalties, you should plan ahead and take distributions as soon as possible.
What are the benefits of having a gold IRA?
It is best to put your retirement money in an Individual Retirement Account (IRA). It will be tax-deferred up until the time you withdraw it. You are in complete control of how much you take out each fiscal year. There are many types to choose from when it comes to IRAs. Some are better suited to college savings. Some are for investors who seek higher returns. Roth IRAs let individuals contribute after age 591/2 and pay tax on any earnings at retirement. But once they start withdrawing funds, those earnings aren't taxed again. This type of account might be a good choice if your goal is to retire early.
An IRA with a gold status is like any other IRA because you can put money into different asset classes. Unlike a regular IRA where you pay taxes on gains, a gold IRA doesn't require you to worry about taxation while you wait to get them. People who want to invest their money rather than spend it make gold IRA accounts a great option.
An additional benefit to owning gold through an IRA, is the ease of automatic withdrawals. This eliminates the need to constantly make deposits. To avoid missing a payment, direct debits can be set up.
Finally, gold is one of the safest investment choices available today. Its value is stable because it's not tied with any one country. Even during economic turmoil the gold price tends to remain fairly stable. Gold is a good option for protecting your savings from inflation.
What are the pros & con's of a golden IRA?
An Individual Retirement account (IRA) is a better option than regular savings accounts in that interest earned is exempted from tax. An IRA is a great option for those who want to save money, but don't want tax on any interest earned. However, there are also disadvantages to this type of investment.
To give an example, if your IRA is withdrawn too often, you can lose all your accumulated funds. You may also be prohibited by the IRS from making withdrawals from an IRA after you turn 59 1/2. If you do decide to withdraw funds from your IRA, you'll likely need to pay a penalty fee.
Another problem is the cost of managing your IRA. Most banks charge 0.5% to 2.0% per annum. Other providers charge monthly management fees ranging from $10 to $50.
If you prefer to keep your money outside a bank, you'll need to purchase insurance. Insurance companies will usually require that you have at least $500,000. Insurance that covers losses upto $500,000.
If you decide to open a gold IRA, it is important to know how much you can use. Some providers limit the amount of gold that you are allowed to own. Others allow you the freedom to choose your own weight.
It is also up to you to decide whether you want to purchase physical gold or futures. Futures contracts for gold are less expensive than physical gold. Futures contracts provide flexibility for purchasing gold. They let you set up a contract that has a specific expiration.
You also need to decide the type and level of insurance coverage you want. The standard policy doesn't include theft protection or loss due to fire, flood, or earthquake. However, it does cover damage caused by natural disasters. You may consider adding additional coverage if you live in an area at high risk.
Insurance is not enough. You also need to think about the cost of gold storage. Storage costs are not covered by insurance. Safekeeping costs can be as high as $25-40 per month at most banks.
You must first contact a qualified custodian before you open a gold IRA. A custodian keeps track of your investments and ensures that you comply with federal regulations. Custodians can't sell 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. Your monthly investment goal should be stated.
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. Financial planners have extensive knowledge in investing and can help determine the best type of IRA to suit your needs. They can help reduce your expenses by helping you find cheaper alternatives to buying insurance.
How do I open a Precious Metal IRA
First, decide if an Individual Retirement Account is right for you. You must complete Form 8606 to open an account. Next, fill out Form 5204. This will determine the type of IRA that you are eligible for. This form should not be completed more than 60 days after the account is opened. Once you have completed this form, it is possible to begin investing. You may also choose to contribute directly from your paycheck using payroll deduction.
If you opt for a Roth IRA, you must complete Form 8903. Otherwise, the process will look identical to an existing IRA.
To be eligible for a precious metals IRA, you will need to meet certain requirements. The IRS says you must be 18 years old and have earned income. You cannot earn more than $110,000 annually ($220,000 if married filing jointly) in any one tax year. Additionally, you must make regular contributions. These rules apply regardless of whether you are contributing directly to your paychecks or through your employer.
You can use a precious metals IRA to invest in gold, silver, palladium, platinum, rhodium, or even platinum. However, you won't be able purchase physical bullion. This means that you will not be allowed to trade shares or bonds.
However, investing in precious metals via an IRA has two serious drawbacks. First, they're not as liquid as stocks or bonds. It is therefore harder to sell them when required. They also don't pay dividends, like stocks and bonds. Also, they don't generate dividends like stocks and bonds. You will eventually lose money rather than make it.
What Precious Metals Can You Invest in for Retirement?
These precious metals are among the most attractive investments. They are both simple to purchase and sell, and they have been around for a long time. If you want to diversify your portfolio, you should consider adding them to your list.
Gold: One of the oldest forms of currency, gold, is one of mankind's most valuable. It is very stable and secure. It's a great way to protect wealth in times of uncertainty.
Silver: Investors have always loved silver. It's an ideal choice for those who prefer to avoid volatility. Silver, unlike gold, tends not to go down but up.
Platinium is another precious metal that is becoming increasingly popular. It is very durable and resistant against corrosion, much like silver and gold. It's also more expensive than the other two.
Rhodium – Rhodium is used to make catalytic conversions. It is also used in jewelry-making. It is also very affordable in comparison to other types.
Palladium: Palladium has a similarity to platinum but is more rare. It's also less expensive. This is why it has become a favourite among investors looking for precious metals.
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- 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)
- 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)
Investing gold vs. stocks
These days, it might seem quite risky to invest your money in gold. Many people believe that investing in gold is not profitable. This belief is based on the fact that gold prices are being driven down by global economic conditions. They think that they would lose money if they invested in gold. In reality, though, gold investment can offer significant benefits. We'll be looking at some of these benefits below.
The oldest form of currency known to mankind is gold. Its use can be traced back to thousands of years ago. It was used by many people around the globe as a currency store. It continues to be used in South Africa, as a way of paying their citizens.
The first point to consider when deciding whether or not you should invest in gold is what price you want to pay per gram. When looking into buying gold bullion, you must decide how much you are willing to spend per gram. If you don’t know the current market rate for gold bullion, you can always consult a local jeweler to get their opinion.
It's worth noting, however, that while gold prices have fallen recently the cost of producing gold is on the rise. Although the price of gold has dropped, production costs have not.
You should also consider the amount of your intended purchase when considering whether you should buy or not. If you intend to only purchase enough gold to cover your wedding rings it may be a smart decision to not buy any gold. 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 this article helped you to gain a better appreciation of gold as a tool for investment. It is important to research all options before you make any decision. Only then can informed decisions be made.
By: Kevin Helms
Title: TD Cowen Predicts SEC Approval of Spot Bitcoin ETFs as a Political Necessity
Sourced From: news.bitcoin.com/sec-will-approve-spot-bitcoin-etf-to-maintain-regulatory-control-over-crypto-industry-analyst-says/
Published Date: Thu, 04 Jan 2024 05:30:40 +0000