Grayscale Investments CEO Discusses Bitcoin ETF Conversion
Grayscale Investments CEO Michael Sonnenshein recently spoke about the company's plan to convert its flagship bitcoin trust (GBTC) into a spot bitcoin exchange-traded fund (ETF). In an interview with Bloomberg at DC Fintech Week, Sonnenshein revealed that the company is engaging with the U.S. Securities and Exchange Commission (SEC) regarding its application.
The SEC had initially rejected Grayscale's spot bitcoin ETF application, but a court ruling ordered the regulator to reevaluate the company's application. Sonnenshein expressed his respect for the court process and highlighted that the SEC did not challenge the court's decision.
Grayscale has submitted the necessary filings, including the S-3 filing, to the SEC, allowing for a constructive dialogue with the regulator. Sonnenshein emphasized that the timelines are not yet discussed, but he confirmed that the SEC is engaging in a positive manner.
Advantage of Grayscale's Bitcoin Trust
Sonnenshein believes that Grayscale has an advantage over other spot bitcoin ETF applicants. The company's bitcoin trust, GBTC, has been a well-known seasoned issuer for several years. This gives Grayscale the ability to file an S-3, a simplified registration statement, instead of the comprehensive S-1 filing required by other issuers.
Unlike other applicants, Grayscale already has a product, investors, and a trading history. Sonnenshein expressed optimism that Grayscale will overcome any final hurdles and provide its investors with the product they have been patiently waiting for.
The CEO also acknowledged the presence of other issuers attempting to launch spot bitcoin products, stating that competition is fantastic. Grayscale has long been prepared for a world with multiple spot bitcoin products, similar to the existence of multiple bitcoin futures products.
SEC's Consideration of Bitcoin ETF Applications
SEC Chairman Gary Gensler recently mentioned that the regulator is reviewing between eight and ten spot bitcoin ETF applications. Analysts, including those at JPMorgan, anticipate the approval of multiple spot bitcoin ETFs simultaneously in early 2022. Additionally, global asset management firm Alliance Bernstein predicts that the price of bitcoin will reach $150,000 by 2025, expecting imminent approvals of spot bitcoin ETFs.
Grayscale Investments is engaging constructively with the SEC to convert its flagship bitcoin trust into a spot bitcoin ETF. With its advantage as a well-known seasoned issuer and operational readiness, Grayscale believes it is well-positioned to navigate the regulatory process and provide investors with the product they have been eagerly awaiting.
Frequently Asked Questions
How is gold taxed in an IRA?
The fair market value at the time of sale is what determines how much tax you pay on gold sales. You don't pay taxes when you buy gold. It is not considered income. If you decide to sell it later, there will be a taxable gain if its price rises.
You can use gold as collateral to secure loans. Lenders look for the highest return when you borrow against assets. Selling gold is usually the best option. There's no guarantee that the lender will do this. They might just hold onto it. Or, they may decide to resell the item themselves. You lose potential profits in either case.
In order to avoid losing your money, only lend against your precious metal if you plan to use it to secure other collateral. It is better to leave it alone.
Can I buy gold using my self-directed IRA
Your self-directed IRA can be used to purchase gold, but first you need to open an account with a brokerage firm such as TD Ameritrade. You can also transfer funds from an existing retirement fund.
Individuals can contribute as much as $5,500 per year ($6,500 if married filing jointly) to a traditional IRA. Individuals are allowed to contribute $1,000 each ($2,000 if married or filing jointly) to a Roth IRA.
If you do decide you want to invest your money in gold, you should look into purchasing physical bullion instead of futures contracts. Futures contracts, which are financial instruments based upon the price of gold, are financial instruments. They let you speculate on future price without having to own the metal. You can only hold physical bullion, which is real silver and gold bars.
What is the value of a gold IRA
A gold IRA has many benefits. You can diversify your portfolio with this investment vehicle. You decide how much money is put in each account and when it is withdrawn.
You also have the option to transfer funds from other retirement plans into a IRA. This is a great way to make a smooth transition if you want to retire earlier.
The best part? You don’t need to have any special skills to invest into gold IRAs. They're readily available at almost all banks and brokerage firms. Withdrawals are made automatically without having to worry about fees or penalties.
But there are downsides. Gold has always been volatile. Understanding why you invest in gold is crucial. Are you seeking safety or growth? Are you trying to find safety or growth? Only after you have this information will you make an informed decision.
If you plan on keeping your gold IRA alive for a while, you may want to consider purchasing more than 1 ounce of pure gold. You won't need to buy more than one ounce of gold to cover all your needs. You could need several ounces depending on what you plan to do with your gold.
A small amount is sufficient if you plan to sell your gold. You can even manage with one ounce. However, you will not be able buy any other items with those funds.
What are the benefits of a Gold IRA?
An Individual Retirement Account (IRA) is the best way to put money towards retirement. It's not subject to tax until you withdraw it. You have complete control over how much you take out each year. There are many types of IRAs. Some are better suited for people who want to save for college expenses. Some are better suited for investors who want higher returns. For example, Roth IRAs allow individuals to contribute after age 59 1/2 and pay taxes 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.
Because it allows you money to be invested in multiple asset classes, a ‘gold IRA' is similar to any other IRAs. Unlike a regular IRA you don't need to worry about taxes while you wait for your gains to be available. This makes gold IRA accounts excellent options for people who prefer to keep their money invested instead of spending it.
You can also enjoy automatic withdrawals, which is another benefit of owning your gold through an IRA. It means that you don’t have to remember to make deposits every month. You could also set up direct debits to never miss a payment.
Gold is one of today's most safest investments. Because it isn’t tied to any specific country, gold’s value tends to stay stable. Even during economic turmoil, gold prices tend to stay relatively stable. As a result, it's often considered a good choice when protecting your savings from inflation.
What Should Your IRA Include in Precious Metals?
It is important to remember that precious metals can be a good investment for anyone. 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 could also consider buying physical coins like bullion bars, rounds or bullion bars. Also, you could buy shares in companies producing precious metals. You might also want to use an IRA rollover program offered through your retirement plan provider.
You'll still get the benefit of precious metals no matter which country you live in. Although they aren’t stocks, they offer the possibility for long-term gains.
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.
Can the government seize your gold?
Your gold is yours, so the government cannot confiscate it. You have earned it by working hard for it. It belongs to you. This rule may not apply to all cases. If you are convicted of fraud against the federal government, your gold can be forfeit. Additionally, your precious metals may be forfeited if you owe the IRS taxes. However, even though your taxes have not been paid, you can still keep your precious metals, even though they are considered the property of United States Government.
- You can only purchase gold bars at least 99.5% purity. (forbes.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)
- 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)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- 7 U.S. Code SS7 – Designation boards of trade as contract market authorities
- 26 U.S. Code SS 408 – Individual retirement funds
Three ways to invest in gold for retirement
It's important to understand how gold fits in with your retirement plan. There are many ways to invest in gold if you have a 401k account at work. You might also be interested to invest in gold outside the workplace. One example is opening a custodial accounts at Fidelity Investments if an IRA (Individual Retirement Account), if you already own one. You might also consider purchasing precious metals directly from a trusted dealer if they are not already yours.
These are three easy rules to remember if you invest in gold.
- Buy Gold With Your Cash – Do not use credit cards to purchase gold. Instead, deposit cash into your accounts. This will help protect you against inflation and keep your purchasing power high.
- Physical Gold Coins – Physical gold coins are better than a paper certificate. Physical gold coins can be sold much faster than paper certificates. There are no storage fees for physical gold coins.
- Diversify Your Portfolio. Never place all your eggs in the same basket. Also, diversify your wealth and invest in different assets. This helps reduce risk and gives you more flexibility during market volatility.
By: Kevin Helms
Title: Grayscale Investments Engages with SEC on Bitcoin ETF Application
Sourced From: news.bitcoin.com/grayscale-constructively-engaging-with-sec-on-spot-bitcoin-etf-says-ceo/
Published Date: Sat, 11 Nov 2023 03:30:37 +0000