Investment bank TD Cowen predicts that the U.S. Securities and Exchange Commission (SEC) will approve spot bitcoin exchange-traded funds (ETFs) by the Jan. 10 deadline, viewing it as a "political necessity." TD Cowen's research team expects this approval to solidify the SEC's role as a crypto regulator before Congress considers broader crypto legislation.
SEC Approval and Political Necessity
In a note published on Tuesday, TD Cowen's Washington Research Group, led by financial analyst Jaret Seiberg, stated that the approval of spot bitcoin ETFs by the SEC is essential from a political standpoint. The agency needs to establish itself as a crypto regulator before Congress can move forward with comprehensive crypto legislation. Additionally, TD Cowen believes that the SEC wants to avoid losing any legal challenges to its refusal to approve bitcoin ETFs.
Past Legal Battle and Congressional Consideration
Last year, the SEC faced a legal battle with Grayscale Investments over the conversion of its bitcoin trust (GBTC) into a spot bitcoin ETF. The regulator initially denied the application but had to reconsider its decision after a court ruling. Currently, Congress is reviewing various cryptocurrency-related bills, indicating the increasing focus on crypto regulation. The U.S. House Financial Services Committee passed four digital asset bills, highlighting the need for regulatory clarity and innovation in the crypto market.
Opportunity for Comprehensive Crypto Market Structure Bill
TD Cowen suggests 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 refers to the time between the election and the inauguration of a new government. To gain support from the Senate and the White House, the SEC must take the lead in ensuring investor protections.
What are your thoughts on the SEC approving spot bitcoin ETFs as a political necessity? Share your opinions in the comments section below.
Frequently Asked Questions
What precious metals can you invest in for retirement?
These precious metals are among the most attractive investments. Both can be easily bought and sold, and have been around since forever. These are great options to diversify your portfolio.
Gold: The oldest form of currency known to man is gold. It's also very safe and stable. It is a good way for wealth preservation during uncertain times.
Silver: Silver has always been popular among investors. This is a great choice for people who want to avoid volatility. Silver tends to move up, not down, unlike gold.
Platinium: Another form of precious metal is platinum, which is becoming more popular. It's resistant to corrosion and durable, similar to gold and silver. It is, however, more expensive than its competitors.
Rhodium: Rhodium can be used in catalytic convertors. It is also used for jewelry making. It is also very affordable in comparison to other types.
Palladium: Palladium is similar to platinum, but it's less rare. It's also less expensive. For these reasons, it's become a favorite among investors looking to add precious metals to their portfolios.
How much of your portfolio should be in precious metals?
First, let's define precious metals to answer the question. Precious elements are those elements which have a high price relative to other commodities. This makes them very valuable in terms of trading and investment. Gold is currently the most widely traded precious metal.
There are also many other precious metals such as platinum and silver. The price of gold fluctuates, but it generally remains stable during times of economic turmoil. It is also relatively unaffected both by inflation and deflation.
All precious metals prices tend to rise with the overall market. They do not always move in the same direction. The price of gold tends to rise when the economy is not doing well, but the prices of the other precious metals tends downwards. This is because investors expect lower interest rates, making bonds less attractive investments.
When the economy is healthy, however, the opposite effect occurs. Investors prefer safe assets such as Treasury Bonds and demand fewer precious metals. They are more rare, so they become more expensive and less valuable.
It is important to diversify your portfolio across precious metals in order to maximize your profit from precious metals investments. Because precious metals prices are subject to fluctuations, it is best to invest across multiple precious metal types, rather than focusing on one.
How do you withdraw from an IRA that holds precious metals?
You first need to decide if you want to withdraw money from an IRA account. Then make sure you have enough cash to cover any fees or penalties that may come with withdrawing funds from your retirement plan.
If you are willing to pay a penalty for early withdrawal, you should consider opening a taxable brokerage account instead of an IRA. This option will require you to pay taxes on the amount that you withdraw.
Next, you need to determine how much money is going to be taken out from your IRA. The calculation is influenced by several factors such as your age at withdrawal, the length of time you have owned the account and whether or not you plan to continue contributing to retirement plans.
Once you know what percentage of your total savings you'd like to convert into cash, you'll need to determine which type of IRA you want to use. Traditional IRAs let you withdraw money tax-free after you turn 59 1/2, while Roth IRAs require you to pay income taxes upfront but allow you access the earnings later without paying any additional taxes.
Once these calculations have been completed you will need to open an account with a brokerage. To encourage customers to open accounts, brokers often offer signup bonuses and promotions. Avoid unnecessary fees by opening an account with your debit card, rather than your credit card.
When it comes time to withdraw your precious metal IRA funds, you will need a safe location where you can keep your coins. Some storage facilities can accept bullion bar, while others require you buy individual coins. Before choosing one, consider the pros and disadvantages of each.
Bullion bars require less space, as they don't contain individual coins. You will need to count each coin individually. However, you can easily track the value of individual coins by storing them in separate containers.
Some prefer to store their coins in a vault. Others prefer to place them in safe deposit boxes. No matter what method you use, it is important to keep your bullion safe so that you can reap its benefits for many more years.
Can I purchase gold with my self directed IRA?
However, gold can only be purchased with your self-directed IRA. To do so, you must first open a brokerage account at TD Ameritrade. If you already have a retirement account, funds can be transferred to it.
The IRS allows individuals contributing up to $5.500 each ($6,500 if married, filing jointly) into a traditional IRA. Individuals may contribute up to $1,000 ($2,000 if married, filing jointly) directly into a Roth IRA.
If you do decide that you want to invest, it is a good idea to buy physical bullion and not in futures. Futures contracts can be described as financial instruments that are determined by the gold price. These financial instruments allow you to speculate about future prices without actually owning the metal. However, physical bullion is real gold or silver bars you can hold in your hands.
Is buying gold a good option for retirement planning?
Although buying gold as an investment might not sound appealing at first, when you look at the average annual gold consumption worldwide, it is worth looking into.
Physical bullion bars are the most popular way to invest in gold. But there are many other options for investing in gold. Research all options carefully and make an informed decision about what you desire from your investments.
If you don’t have the funds to invest in safe places, such as a safe deposit box or mining equipment companies, buying shares of these companies might be a better investment. If you require cash flow, gold stocks can work well.
ETFs are an exchange-traded investment that allows you to gain exposure to the market for gold. You hold gold-related securities and not actual gold. These ETFs typically include stocks from gold miners, precious metallics refiners, commodity trading companies, and other commodities.
What is a gold IRA account?
Gold Ira accounts are tax-free investment vehicles for people who want to invest in precious metals.
You can buy physical gold bullion coins at any time. You don't have a retirement date to invest in gold.
An IRA allows you to keep your gold forever. Your gold holdings will not be subject to tax when you are gone.
Your heirs will inherit your gold, and not pay capital gains taxes. Because your gold doesn't belong to the estate, it's not necessary to include it on your final estate plan.
To open a IRA for gold, you must first create an individual retirement plan (IRA). Once you've done so, you'll be given an IRA custodian. This company acts as an intermediary between you and IRS.
Your gold IRA custodian can handle all paperwork and submit necessary forms to IRS. This includes filing annual reporting.
After you have established your gold IRA you will be able purchase gold bullion coin. The minimum deposit is $1,000. The minimum deposit is $1,000. However, you will receive a higher percentage of interest if your deposit is greater.
You will pay taxes when you withdraw your gold from your IRA. You'll have to pay income taxes and a 10% penalty if you withdraw the entire amount.
However, if you only take out a small percentage, you may not have to pay taxes. However, there are exceptions. For example, taking out 30% or more of your total IRA assets, you'll owe federal income taxes plus a 20 percent penalty.
You should avoid taking out more than 50% of your total IRA assets yearly. A violation of this rule can lead to severe financial consequences.
Statistics
- 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)
- 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)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
External Links
law.cornell.edu
- 7 U.S. Code SS7 – Designation Boards of Trade as Contract Markets
- 26 U.S. Code SS 408 – Individual retirement accounts
irs.gov
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear in 1990 – WSJ
- You want to keep gold in your IRA at home? It's Not Exactly Legal – WSJ
