The Chairman of SEC Warns Investors
U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler has advised investors to be cautious when considering crypto investments. His advice followed a series of warnings he issued the day before regarding the risks of crypto investing. The SEC is expected to green-light multiple spot bitcoin exchange-traded funds (ETFs) on Wednesday.
A Call for Caution in Crypto Investing
In a statement on social media platform X, Gary Gensler, Chairman of the SEC, urged investors to be cautious if they are considering an investment involving crypto assets. He emphasized that crypto asset securities may be marketed as new investment opportunities, but there are serious risks involved.
Gensler shared an article written by Lori Schock, Director of the SEC's Office of Investor Education and Advocacy, titled "Thinking About Buying the Latest New Cryptocurrency or Token?" The article highlights various risks associated with crypto investing and offers advice on what investors should do. One key piece of advice is to avoid falling for high-pressure sales tactics, guaranteed returns, or too good to be true claims.
According to Gensler, cryptocurrencies may present shiny new opportunities, but investors should proceed with caution, conduct thorough research, evaluate financial goals, and make informed investment decisions.
Gensler's Ongoing Warnings
Gensler's statements about crypto investing on Tuesday mark the second consecutive day of addressing the matter. On Monday, he warned about the various risks associated with crypto investing, and over the weekend, the SEC cautioned investors against succumbing to the fear of missing out (FOMO).
Possible Approval of Spot Bitcoin ETFs
Gensler issuing statements on crypto twice this week has fueled optimism surrounding the imminent approval of spot bitcoin ETFs by the SEC. A decision is anticipated on Wednesday, which is the deadline for the joint proposal by Cathie Wood's Ark Invest and 21shares.
According to Fox Business reporter Charles Gasparino, top securities lawyers who deal with the SEC believe that Gary Gensler's recent crypto warnings are a prelude to the imminent approval of spot BTC ETFs. These lawyers explain that there are no more SEC impediments to approval, as the risks are now known, and adequate trading processes are in place. However, they also caution that risks are super high and processes outside the U.S. cannot be effectively policed.
However, it is worth noting that the official SEC account on X announced the approval of spot bitcoin ETFs on Tuesday evening. But Gensler quickly posted on X that the ETF approval post was unauthorized, stating that the agency's social media account was compromised.
Conclusion
Gary Gensler's repeated warnings about crypto investing highlight the serious risks involved in this volatile market. As the SEC moves closer to potentially approving spot bitcoin ETFs, investors need to exercise caution, conduct thorough research, and make informed decisions to navigate the ever-evolving landscape of cryptocurrencies.
What are your thoughts on Gensler's statements about crypto investing and the upcoming spot bitcoin ETF decision? Share your opinions in the comments section below.
Frequently Asked Questions
What are the benefits of a Gold IRA?
The best way to save money for retirement is to place it in an Individual Retirement Account. It is tax-deferred until it's withdrawn. You can decide how much money you withdraw each year. There are many types to choose from when it comes to IRAs. Some are more suitable for students who wish to save money for college. Others are made for investors seeking higher returns. Roth IRAs let individuals contribute after age 591/2 and pay tax on any earnings at retirement. But once they start withdrawing funds, those earnings aren't taxed again. This account is a good option if you plan 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 you don't need to worry about taxes while you wait for your gains to be available. People who want to invest their money rather than spend it make gold IRA accounts a great option.
Another benefit to owning IRA gold is the ability to withdraw automatically. That means you won't have to think about making deposits every month. To make sure you don't miss any payments, you can also set up direct deductions.
Finally, gold remains one of the best investment options today. Because it's not tied to any particular country, its value tends to remain steady. Even during economic turmoil the gold price tends to remain fairly stable. Therefore, gold is often considered a good investment to protect your savings against inflation.
Are gold investments a good idea for an IRA?
If you are looking for a way to save money, gold is a great investment. You can also diversify your portfolio by investing in gold. But there is more to gold than meets the eye.
It has been used throughout history as currency and it is still a very popular method of payment. It is often called “the oldest currency in the world.”
Gold is not created by governments, but it is extracted from the earth. It is very valuable, as it is rare and hard to create.
The supply-demand relationship determines the gold price. The economy that is strong tends to be more affluent, which means there are less gold miners. As a result, the value of gold goes up.
On the flip side, when the economy slows down, people hoard cash instead of spending it. This leads to more gold being produced which decreases its value.
This is why both individuals as well as businesses can benefit from investing in gold. You'll reap the benefits of investing in gold when the economy grows.
In addition to earning interest on your investments, this will allow you to grow your wealth. Plus, you won't lose money if the value of gold drops.
Can I have a gold ETF in a Roth IRA
Although a 401k plan might not provide this option, you should still consider other options like an Individual Retirement Account (IRA).
A traditional IRA allows contributions from both employee and employer. Another option is to invest in publicly traded corporations with an Employee Stockownership Plan (ESOP).
An ESOP offers tax benefits because employees can share in the company stock and any profits that it generates. The tax rate on money that is invested in an ESOP is lower than if it was held in the employees' hands.
Also available is an Individual Retirement Annuity. An IRA allows for you to make regular income payments during your life. Contributions to IRAs do not have to be taxable
How do you withdraw from an IRA that holds precious metals?
First, decide if it is possible to withdraw funds from an IRA. After that, you need to decide if you want to withdraw funds from an IRA account. Next, make sure you have enough money in order for you pay any fees or penalties.
Consider opening a taxable brokerage instead of an IRA if it is possible to pay a penalty if your withdrawal is made before the deadline. You will also have to account for taxes due on any amount you withdraw if you choose this option.
Next, figure out how much money will be taken out of your IRA. This calculation depends on several factors, including the age when you withdraw the money, how long you've owned the account, and whether you intend to continue contributing to your retirement plan.
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 allow for you to withdraw funds without tax when you turn 59 1/2. Roth IRAs, on the other hand, charge income taxes upfront but you can access your earnings later and pay no additional taxes.
Finally, you'll need to open a brokerage account once these calculations are completed. To encourage customers to open accounts, brokers often offer signup bonuses and promotions. You can save money by opening an account with a debit card instead of a credit card to avoid paying unnecessary fees.
When you do finally decide to withdraw from your precious metallic IRA, you will need a safe space where you can safely store your coins. While some storage facilities accept bullion bars and others require that you purchase individual coins, others will allow you to store your coins in their own safe. You will need to weigh each one before making a decision.
Bullion bars are easier to store than individual coins. But, each coin must be counted separately. However, you can easily track the value of individual coins by storing them in separate containers.
Some people prefer to keep their coins in a vault. Others prefer to store them in a safe deposit box. You can still enjoy the benefits of bullion for many years, regardless of which method you choose.
What's the advantage of a Gold IRA?
Many benefits come with a gold IRA. You can diversify your portfolio with this investment vehicle. You can control how much money is deposited into each account as well as when it's withdrawn.
You also have the option to roll over funds from other retirement accounts into a gold IRA. This is a great way to make a smooth transition if you want to retire earlier.
The best thing about investing in gold IRAs is that you don’t need any special skills. They are offered by most banks and brokerage companies. You do not need to worry about fees and penalties when you withdraw money.
There are also drawbacks. Gold is known for being volatile in the past. It is important to understand why you are investing in gold. Are you looking for growth or safety? Are you trying to find safety or growth? Only by knowing the answer, you will be able to make an informed choice.
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. One ounce doesn't suffice to cover all your needs. Depending on the purpose of your gold, you might need more than one ounce.
A small amount is sufficient if you plan to sell your gold. You can even manage with one ounce. You won't be capable of buying anything else with these funds.
How much of your portfolio should be in precious metals?
To answer this question, we must first understand what precious metals are. Precious elements are those elements which have a high price relative to other commodities. This makes them valuable in investment and trading. Today, gold is the most commonly traded precious metal.
However, many other types of precious metals exist, including silver and platinum. The price volatility of gold can be unpredictable, but it is generally stable during periods of economic turmoil. It also remains relatively unaffected by inflation and deflation.
All precious metals prices tend to rise with the overall market. That said, they do not always move in lockstep with each other. When the economy is in trouble, for example, gold prices tend to rise while other precious metals fall. Investors expect lower interest rate, making bonds less appealing investments.
However, when an economy is strong, the reverse effect occurs. Investors choose safe assets such Treasury Bonds over precious metals. They become less expensive and have a lower value because they are limited.
Diversifying across precious metals is a great way to maximize your investment returns. It is also a good idea to diversify your investments in precious metals, as prices tend to fluctuate.
Statistics
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- (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)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.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)
External Links
cftc.gov
investopedia.com
wsj.com
- Saddam Hussein's Invasion Helped Uncage a Bear In 1990 – WSJ
- Are you interested in keeping gold in your IRA at-home? It's Not Exactly Lawful – WSJ
law.cornell.edu
- 7 U.S. Code SS7 – Designation board of trade as contract marketplaces
- 26 U.S. Code SS 408 – Individual retirement accounts
How To
The History of Gold as an Asset
From ancient times to the beginning of the 20th century, gold was used as a currency. It was widely accepted around the world and enjoyed its purity, divisibility and uniformity. Aside from its inherent value, it could be traded internationally. However, since there were no international standards for measuring gold at this point, different weights and measures existed worldwide. For example in England, a pound sterling equals 24 carats. In France, a livre tournois equals 25. Carats of golden. Germany had one mark which equals 28. Carats.
In the 1860s, the United States began to issue American coins made from 90% copper, 10% Zinc, and 0.942 Fine Gold. This led to a decline in demand for foreign currencies, which caused their price to increase. This was when the United States started minting large quantities of gold coins. The result? Gold prices began to fall. Due to the excessive amount of money flowing into the United States, they had to find a way for them to repay some of their debt. They decided to return some of the gold they had left to Europe.
Many European countries began accepting gold in exchange for the dollar because they did not trust it. Many European countries started to accept paper money as a substitute for gold after World War I. The value of gold has significantly increased since then. Even though gold's price fluctuates, it is still one of the most secure investments you could make.
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By: Kevin Helms
Title: Gary Gensler's Advice to Crypto Investors: Be Cautious, Serious Risks Involved
Sourced From: news.bitcoin.com/sec-chair-gary-gensler-issues-crypto-investing-advice-lawyers-see-as-prelude-to-spot-bitcoin-etf-approval/
Published Date: Wed, 10 Jan 2024 02:00:55 +0000
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