Concerns Mount Over Potential SEC Rejection of Spot Bitcoin ETFs, Analyst Weighs In

Introduction

The U.S. Securities and Exchange Commission (SEC) is facing concerns over the potential rejection of spot bitcoin exchange-traded funds (ETFs). Financial watchdog group Better Markets has urged the SEC to reject these ETFs, warning of "financial carnage" and "massive investor harm." The SEC is expected to make a decision on spot bitcoin ETFs early next week, with trading potentially beginning on January 11.

Better Markets Urges SEC to Reject Spot Bitcoin ETFs

Following a letter from Better Markets, concerns have arisen within the crypto community regarding the approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC). Better Markets argues that the SEC has a legal obligation to deny these applications, citing the potential for "financial carnage" and "massive investor harm" if these ETFs are approved. The group's website features Senator Elizabeth Warren (D-MA) as a top testimonial, and its CEO reportedly has close ties to SEC Chairman Gary Gensler.

Analyst's Analysis

In response to Friday's report that the SEC has not yet voted on the spot bitcoin ETFs, Bloomberg analyst Eric Balchunas offered his analysis. He explained that the SEC has never voted on any bitcoin ETFs, as approvals or rejections have been made via "Delegated Authority." Balchunas believes that this method would likely be used for the spot bitcoin ETFs as well. He also pointed out that a public meeting would need to be scheduled for a vote to take place, but the upcoming meeting on January 11 would be too late for the ETFs to launch on January 11. The deadline for the SEC to decide on a spot bitcoin ETF proposal is January 10.

Furthermore, the analyst expressed doubt that SEC Chairman Gary Gensler would vote against the approval of the spot bitcoin ETFs. Balchunas stated that there is no basis to deny approval, especially considering that Gensler directed the SEC staff to work extensively with 11 issuers on 5-10 rounds of comments. Gensler has also indicated that he wants these ETFs to be ready for launch on January 11. However, Balchunas emphasized that approval cannot be guaranteed until the SEC makes an official announcement.

Conclusion

The SEC is expected to make a decision on spot bitcoin ETFs in the coming week. Final filings are due on Monday, and the SEC is reportedly aiming to launch the spot bitcoin ETFs on January 11. The outcome of the SEC's decision remains uncertain, and the crypto community eagerly awaits the verdict.

What are your thoughts on the potential rejection of spot bitcoin ETFs by the SEC? Share your opinions in the comments below.

Frequently Asked Questions

How much of your IRA should include precious metals?

It’s important to understand that precious metals aren’t only for wealthy people. It doesn’t matter how rich you are to invest in precious metals. In fact, there are many ways to make money from gold and silver investments without spending much money.

You might consider purchasing physical coins, such as bullion bars and rounds. It is possible to also purchase shares in companies that make precious metals. Another option is to make use of the IRA rollover programs offered by your retirement plan provider.

You will still reap the benefits of owning precious metals, regardless of which option you choose. Even though they aren’t stocks, they still offer the possibility of 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 are some of the benefits of a gold IRA

An Individual Retirement Account (IRA) is the best way to put money towards retirement. It is tax-deferred until it’s withdrawn. You can decide how much money you withdraw each year. There are many types of IRAs. Some are more suitable for students who wish to save money for college. Some are better suited for investors who want higher returns. Roth IRAs, for example, allow people to contribute after they turn 59 1/2. They also pay taxes on any earnings when they retire. Once they start withdrawing money, however, the earnings aren’t subject to tax again. This type account may make sense if it is your intention to retire early.

A gold IRA is similar to other IRAs because it allows you to invest money in various asset classes. Unlike a regular IRA which requires taxes to be paid on gains as you wait to withdraw them, a IRA with gold allows you to invest in multiple asset classes. For people who would rather invest than spend their money, gold IRA accounts are a good option.

An additional benefit to owning gold through an IRA, is the ease of automatic withdrawals. It means that you don’t have to remember to make deposits every month. Direct debits could be set up to ensure you don’t miss a single payment.

Finally, gold remains one of the best investment options today. It is not tied to any country so its value tends stay steady. Even in times of economic turmoil gold prices tend to remain stable. As a result, it’s often considered a good choice when protecting your savings from inflation.

What is a Precious Metal IRA (IRA)?

An IRA with precious metals allows you to diversify retirement savings into gold and silver, palladium, rhodiums, iridiums, osmium, or other rare metals. These precious metals are extremely rare and valuable. They are great investments for your money, and they can protect you from inflation or economic instability.

Precious metals are often referred to as “bullion.” Bullion refers to the actual physical metal itself.

Bullion can be purchased via a variety of channels including online sellers, large coin dealers, and grocery stores.

You can invest directly in bullion with a precious metal IRA instead of buying shares of stock. This ensures that you will receive dividends each and every year.

Precious metal IRAs do not require paperwork nor annual fees, unlike regular IRAs. You pay only a small percentage of your gains tax. Plus, you can access your funds whenever you like.

Statistics

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)
You can only purchase gold bars at least 99.5% purity. (forbes.com)
(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)
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)