Following the recent approval of spot bitcoin exchange-traded funds (ETFs), SEC Chairman Gary Gensler issued a statement to clarify the regulator's position on bitcoin and cryptocurrency. Gensler emphasized that the approval of spot bitcoin ETFs should not be interpreted as an endorsement of bitcoin itself.
The SEC had previously disapproved more than 20 exchange rule filings for spot bitcoin ETPs since 2018. However, Gensler highlighted that circumstances have changed, referring to a ruling by the U.S. Court of Appeals for the District of Columbia. The court held that the SEC had failed to adequately explain its reasoning in disapproving the listing and trading of Grayscale's proposed ETP.
The Sustainable Path Forward
Based on this ruling and the changing circumstances, Gensler expressed his belief that the most sustainable path forward is to approve the listing and trading of spot bitcoin ETP shares. As a result, the SEC authorized 11 issuers, including Grayscale Investments, to list and trade their spot bitcoin ETFs on major exchanges such as NYSE Arca, Nasdaq, and Cboe BZX Exchange.
No Indication of Approval for Crypto Asset Securities
Gensler made it clear that the approval of spot bitcoin ETFs should not be interpreted as a signal of the SEC's willingness to approve listing standards for crypto asset securities. He emphasized that the approval does not reflect the SEC's views on the status of other crypto assets under federal securities laws or the compliance of certain market participants with these laws.
Most Crypto Assets Considered Securities
Gensler reiterated his long-standing view that the majority of crypto assets are investment contracts and therefore subject to federal securities laws. He stated that while he does not prejudge any specific crypto asset, it is important for investors to remain cautious about the risks associated with bitcoin and products tied to crypto.
Gensler's Warnings and Investment Advice
Aside from the statement, Gensler has been active in issuing warnings and offering investment advice to crypto investors. He has highlighted the various risks in the crypto industry and emphasized the need for caution when engaging in crypto investing.
What are your thoughts on SEC Chairman Gary Gensler's statement regarding bitcoin and spot bitcoin ETF approvals? Share your opinions in the comments section below.
Frequently Asked Questions
Are precious metal IRAs a good way to invest?
The answer depends on how much you are willing to risk an IRA account losing value. If you have $10,000 cash, they make sense as long as you don’t expect your IRA account to grow rapidly. These may not be the best option if you are looking to save for retirement over many decades and invest in assets that will increase in value (e.g. gold). They can also come with fees that could cut into any gains.
Can I physically possess gold in my IRA account?
Many people are curious if they can possess physical gold in an IRA. This is a fair question because there isn't any legal way to do it.
But if you carefully examine the law, there's nothing stopping you from owning gold in your IRA.
Most people don't realize the cost savings they could make by putting their gold into an IRA rather than keeping it in their homes.
It's simple to throw out gold coins but difficult to put them into an IRA. If you decide to keep your gold in your own home, you'll pay taxes on it twice. Two taxes will be charged: one to the IRS, one to the state you live in.
There are two ways to lose your gold: pay taxes twice and keep it in your house. Why would you want it to stay in your home?
You might argue that it is important to know that your gold remains safe in your house. However, to guard yourself against theft, it is worth considering storing your gold in a more secure location.
If you're planning on visiting frequently, it is best to keep your gold safe at home. Theft can easily take your gold when you're not home.
Better yet, store your gold inside an insured vault. Then, your gold will be protected from fire, flood, earthquake, and robbery.
You won't be responsible for paying any property tax if you store your gold in a vault. Instead, you'll have to pay income tax on any gains you make from selling your gold.
An IRA is a way to avoid paying taxes on gold. You won't be subject to income tax if you earn interest from your gold with an IRA.
Since you aren't required to pay capital gains tax on your gold, you'll have access to the full value of your investment whenever you want to cash it out.
And since IRAs are federally regulated, you won't have any trouble getting your gold transferred to another bank if you move.
Bottom line: You can have gold in an IRA. Your fear of it being stolen is what holds you back.
What precious metal should I invest in?
The investment of gold is high-returning and has high capital appreciation. It is also immune to inflation and other risk factors. People become more concerned about inflation and the gold price tends to go up.
It is a smart move to purchase gold futures. These contracts will guarantee that you will receive a specific amount of gold at an agreed price.
Gold futures are not for everyone. Some prefer physical gold.
They can easily trade their gold with others. They can also sell their gold whenever they wish.
Some people also prefer to avoid paying taxes on their gold. They purchase gold directly from governments to achieve this.
This will require several trips to your local Post Office. You must first convert any existing gold into coins or bars.
Finally, you'll need to get a stamp to put on the bars or coins. Finally, send the coins or bars to the US Mint. They melt the bars and coins into new coins.
These new bars and coins have the original stamps stamped on them. This means they are legal tender.
If you buy gold from the US Mint directly, you won’t have to pay tax.
Decide which precious metal you would like to invest.
What precious metals can be allowed in an IRA?
Gold is the most widely used precious metal for IRA account accounts. You can also invest in gold bullion bars and coins.
Precious Metals include palladium, silver, and platinum. These metals all share similar properties. Each metal has its own use.
For instance, platinum can be used in jewelry manufacturing. You can create catalysts with palladium. It is used for producing coins.
Consider how much you plan to spend on gold when deciding on which precious metal to buy. It may be more cost-effective to purchase gold at lower prices per ounce.
It is also important to consider whether you would like to keep your investment confidential. If you do, you should choose palladium.
Palladium is more valuable than gold. However, it is also rarer. So you'll likely have to pay more for it.
Storage fees are another important consideration when choosing between silver and gold. You store gold by weight. For larger quantities of gold, you will be charged a higher storage fee.
Silver is best stored in volumes. Therefore, smaller amounts of silver will cost less.
You should follow all IRS rules if you plan to store precious metals in an IRA. This includes keeping track of transactions and reporting them to the IRS.
- Silver must be 99.9% pure • (forbes.com)
- The maximum yearly contribution to an individual's IRAs is currently $6,000 ($7,000 for those 50 years or older), or 100% of earned income, whichever is less. (monex.com)
- To qualify as IRA allowable precious metals and be accepted by STRATA, the following minimum fineness requirements must be met: Gold must be 99.5% pure, silver must be 99.9% pure, and platinum and palladium must both be 99.95% pure. (stratatrust.com)
- You can only purchase gold bars of at least 99.5% purity. (forbes.com)
- Gold IRA – Add Sparkle to Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
How to open a Precious Metal IRA
Precious Metals are one of today's most desired investment vehicles. Precious metals have a higher return than traditional investments like bonds or stocks, which is why they are so sought-after. However, precious metals investing requires careful planning and research. If you want to open your own precious metal IRA account, here's what you should know first.
There are two main types of precious metal accounts: physical precious metals accounts and paper gold and silver certificates (GSCs). Each type has its pros and cons. For example, physical precious metals accounts offer diversification benefits, while GSCs are easy to access and trade. You can read more about them below.
Physical precious metals accounts can be used to hold bullion, coins and bars. This option is great for diversification, but it has its drawbacks. It is expensive to buy, store, and sell precious metals. They can also be very difficult to transport due to their large size.
However, silver and gold certificates made of paper are quite affordable. Additionally, they can be easily traded online and accessible. They are ideal for those who don't wish to invest in precious metals. But they don't offer as much diversification as their physical counterparts. Also, since they're backed by government agencies such as the U.S. Mint, the value of these assets could decrease if inflation rates rise.
Make sure you choose the right account to suit your financial situation when opening a precious Metal IRA. Consider the following:
- Your tolerance level
- Your preferred asset-allocation strategy
- How much time will you invest?
- No matter if you intend to use the funds in short-term trading.
- Which tax treatment would you prefer?
- Which precious metals would you prefer to invest in
- How liquid do you need your portfolio to be
- Your retirement age
- Where you'll store your precious metals
- Your income level
- Current savings rate
- Your future goals
- Your net worth
- Consider any special circumstances that could affect your decision
- Your overall financial position
- Your preference between physical and paper assets
- Your willingness and ability to take risks
- Your ability to manage losses
- Your budget constraints
- Financial independence is what you want
- Your investment experience
- Your familiarity in precious metals
- Your knowledge about precious metals
- Your confidence in the economy
- Your personal preferences
Once you've determined which type of precious metal IRA best suits your needs, you can proceed to open an account with a reputable dealer. These companies can also be found online, through word-of mouth or referrals.
After opening your precious metal IRA you will need to decide how big you want it to be. There are different minimum deposits for precious metal IRA accounts. Some accounts will only accept $100, others will allow for you to invest as high as $50,000.
As stated above, the amount of money invested in your precious metal IRA is completely up to you. If you're looking to build wealth over a long period, you should probably opt for a larger initial deposit. On the other hand, if you're planning on investing smaller sums of money every month, a lower initial deposit might work better for you.
You can purchase a variety of investments, regardless of whether the precious metals are actually used in your IRA. Here are some of the most common:
- Gold – Bullion bars, rounds, and coins
- Silver – Rounds or coins
- Platinum – Coins
- Palladium – Round and bar forms
- Mercury – Round or bar forms
By: Kevin Helms
Title: SEC Chairman Gary Gensler Clarifies Stance on Bitcoin and Spot Bitcoin ETF Approvals
Sourced From: news.bitcoin.com/sec-chair-gary-gensler-warns-spot-bitcoin-etf-approval-isnt-btc-endorsement/
Published Date: Wed, 10 Jan 2024 23:30:33 +0000