The Concerns Raised by Better Markets
The recent approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) has drawn criticism from Better Markets, an independent nonprofit organization focused on promoting public interest in financial markets and the economy. According to Better Markets, this approval has essentially allowed for the "mass marketing of a known worthless, volatile, and fraud-filled financial product to Main Street Americans."
Questioning the SEC's Decision
In a press statement released on January 11, 2024, Better Markets expressed its concerns regarding the legality of the SEC's approval of ETF applications. The organization argues that the law does not support such approvals and questions the assumption that a U.S. court ruling favoring Grayscale, a crypto asset manager, forced the SEC's hand. It should be noted that the court ruling deemed the SEC's rejection of Grayscale's spot Bitcoin ETF as "arbitrary and capricious."
However, Better Markets refutes the idea that the SEC had no choice but to approve the ETFs based on this ruling. The organization emphasizes that the court simply highlighted the SEC's failure to adequately explain its previous rejection. Better Markets believes that the SEC should have rejected the applications and provided a more detailed explanation, particularly concerning the prevalence of wash trading in Bitcoin markets. The organization claims that up to 77.5% of total trading volume on unregulated exchanges and up to 95% of Bitcoin trading could be attributed to wash trading.
The Perception of Government Endorsement
Furthermore, Better Markets asserts that proponents of Bitcoin (BTC) will likely interpret the SEC's approval as a form of government endorsement for cryptocurrencies. However, the organization dismisses this notion and argues that BTC remains a "worthless financial product" mainly favored by speculators, gamblers, and criminals.
Lack of Effective Regulatory Oversight
According to Better Markets, no regulatory body has been able to effectively police the crypto industry to date. The organization goes on to criticize Rostin Behnam, the chairman of the Commodities Futures Trading Commission (CFTC), whom they accuse of being biased in favor of cryptocurrencies.
What are your thoughts on Better Markets' critique of the SEC's approval of ETFs? Share your opinion in the comments section below.
Frequently Asked Questions
Is physical gold allowed in an IRA.
Gold is money and not just paper currency. People have used gold as a currency for thousands of centuries to preserve their wealth and keep it safe from inflation. Investors today use gold to diversify their portfolios because gold is more resilient to financial turmoil.
Today, Americans prefer precious metals like silver and gold to stocks and bonds. While owning gold doesn't guarantee you'll make money investing in gold, there are several reasons why it may make sense to consider adding gold to your retirement portfolio.
One reason is that gold has historically performed better than other assets during periods of financial panic. Between August 2011 to early 2013, gold prices rose close to 100 percent while the S&P 500 fell 21 per cent. During turbulent market conditions gold was one of few assets that outperformed stock prices.
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. Gold can be worth more than its investment in a company that defaults on its obligations.
Finally, the liquidity that gold provides is unmatched. This allows you to sell your gold whenever you want, unlike many other investments. Gold is liquid and therefore it makes sense to purchase small amounts. This allows you take advantage of the short-term fluctuations that occur in the gold markets.
What is the best precious metal to invest in?
Answering this question will depend on your willingness to take some risk and the return you seek. Although gold has been considered a safe investment, it is not always the most lucrative. You might not want to invest in gold if you're looking for quick returns. Silver is a better investment if you have patience and the time to do it.
If you're not looking to make quick money, gold is probably your best choice. If you are looking for a long-term investment that will provide steady returns, silver may be a better choice.
How much of your IRA should include precious metals?
The most important thing you should know when investing in precious metals is that they are not just for wealthy people. It doesn't matter how rich you are to invest in precious metals. You can actually make money without spending a lot on gold or silver investments.
You might think about buying physical coins such a bullion bar or round. It is possible to also purchase shares in companies that make precious metals. Your retirement plan provider may offer an IRA rollingover program.
You can still get benefits from precious metals regardless of what choice you make. These metals are not stocks, but they can still provide long-term growth.
Their prices rise with time, which is a different to traditional investments. This means that if you decide on selling your investment later, you'll likely get more profit than you would with traditional investing.
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)
- 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)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- 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)
External Links
finance.yahoo.com
law.cornell.edu
- 7 U.S. Code SS7 – Designation Boards of Trade as Contract Markets
- 26 U.S. Code SS 408 – Individual retirement plans
wsj.com
- Saddam Hussein’s InvasionHelped Uncage a Bear In 1989 – WSJ
- You want to keep gold in your IRA at home? It's Not Exactly Legal – WSJ
irs.gov
How To
Tips for Investing in Gold
Investing in Gold has become a very popular investment strategy. There are many advantages to investing in Gold. There are many ways you can invest in gold. Some people prefer to buy gold coins in physical form, while others prefer to invest in gold ETFs.
Before you buy any type of gold, there are some things that you should think about.
- First, check to see if your country permits you to possess gold. If it is, you can move on. If not, you may want to consider purchasing gold from overseas.
- The second thing you need to do is decide what type of gold coins you want. There are many options for gold coins: yellow, white, and rose.
- Third, consider the cost of gold. It is best to begin small and work your ways up. It is important to diversify your portfolio whenever you purchase gold. Diversify your investments in stocks, bonds or real estate.
- Remember that gold prices are subject to change regularly. It is important to stay up-to-date with the latest trends.
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By: Terence Zimwara
Title: Bitcoin ETFs: Better Markets Criticizes SEC Approval, Calls it “Mass Marketing” of a Worthless Asset
Sourced From: news.bitcoin.com/bitcoin-etfs-enable-the-mass-marketing-of-a-worthless-asset-to-main-street-americans-says-better-markets/
Published Date: Fri, 12 Jan 2024 12:30:29 +0000
