Introduction
The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, recently discussed the approval of spot bitcoin exchange-traded funds (ETFs) and the irony surrounding it. In an interview with CNBC, Gensler highlighted the contradiction between the decentralized nature of bitcoin and the centralization resulting from the approval of these ETFs. He also emphasized the speculative and volatile nature of bitcoin and its association with illicit activities.
The Irony of Centralization
Gensler pointed out the irony in the approval of spot bitcoin ETFs, stating that bitcoin was initially designed to be a decentralized system. However, the approval of these ETFs has led to centralization in the cryptocurrency market. He emphasized that the recent developments were about centralization and traditional means of finance, which contradicted the decentralized vision of bitcoin.
The Centralization Concern
Gensler highlighted the increasing centralization in the cryptocurrency market as a result of spot bitcoin ETFs. He noted that investors could already invest in bitcoin through major brokerage houses, but the approval of these ETFs introduced another centralized investment option. Gensler expressed concern about the level of centralization in the market.
SEC Approval and Endorsement
The SEC recently approved 11 spot bitcoin ETFs, with Gensler being the deciding vote. However, Gensler clarified that the approval was not an endorsement of bitcoin itself. Instead, it was an approval of exchange-traded products that allowed investors to invest in the underlying non-security commodity, bitcoin. He emphasized that the approval did not signify an endorsement of the cryptocurrency.
The Speculative and Volatile Nature of Bitcoin
Gensler warned investors about the highly speculative and volatile nature of bitcoin. He emphasized that bitcoin was a speculative store of value and was not widely used as a payment mechanism. Gensler stated that the primary use cases of bitcoin were associated with illicit activities such as money laundering, sanctions evasion, and ransomware.
Conclusion
SEC Chairman Gary Gensler's comments shed light on the irony surrounding the approval of spot bitcoin ETFs. While bitcoin was intended to be decentralized, the approval of these ETFs has resulted in increased centralization in the cryptocurrency market. Gensler also highlighted the speculative and volatile nature of bitcoin, cautioning investors about its association with illicit activities. As the cryptocurrency industry continues to evolve, regulatory bodies like the SEC play a crucial role in ensuring investor protection and market stability.
What are your thoughts on SEC Chairman Gary Gensler's statements? Let us know in the comments section below.
Frequently Asked Questions
Is gold a good investment IRA option?
Gold is an excellent investment for any person who wants to save money. It can be used to diversify your portfolio. 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.”
But gold, unlike paper currency, which is created by governments, is mined out from the ground. It's hard to find and very rare, making it extremely valuable.
The supply-demand relationship determines the gold price. When the economy is strong, people tend to spend more money, which means fewer people mine gold. As a result, the value of gold goes up.
The flip side is that people tend to save money when the economy slows. This results in more gold being produced, which drives down its value.
It is this reason that gold investing makes sense for businesses and individuals. If you have gold to invest, you will reap the rewards when the economy expands.
You'll also earn interest on your investments, which helps you grow your wealth. If gold's value falls, you don't have to lose any of your investments.
What are the benefits of a gold IRA
Many benefits come with a gold IRA. It's an investment vehicle that allows you to diversify your portfolio. You have control over how much money goes into each account.
You also have the option to transfer funds from other retirement plans into a IRA. This will allow you to transition easily if it is your decision to retire early.
The best thing is that investing in gold IRAs doesn't require any special skills. They are offered by most banks and brokerage companies. Withdrawals can happen automatically, without any fees or penalties.
There are also drawbacks. Gold is historically volatile. Understanding why you want to invest in gold is essential. Are you looking for growth or safety? Are you trying to find safety or growth? Only once you know, that will you be able to make an informed decision.
If you want to keep your gold IRA open for life, you might consider purchasing more than one ounce. A single ounce isn't enough to cover all of your needs. Depending on the purpose of your gold, you might need more than one ounce.
You don’t necessarily need a lot if you’re looking to sell your gold. Even one ounce is enough. But, those funds will not allow you to buy anything.
Who owns the gold in a Gold IRA?
The IRS considers anyone who owns gold to be “a form money” and therefore subject to taxation.
This tax-free status is only available to those who have owned at least $10,000 of gold and have kept it for at minimum five years.
The purchase of gold can protect you from inflation and price volatility. But it's not smart to hold it if your only intention is to use it.
If you plan to sell the gold one day, you will need to report its worth. This will affect how much capital gains tax you owe on cash you have invested.
It is a good idea to consult an accountant or financial planner to learn more about your options.
How much tax is gold subject to in an IRA
The tax on the sale of gold is based on its fair market value when sold. If you buy gold, there are no taxes. It is not income. If you decide to sell it later, there will be a taxable gain if its price rises.
Gold can be used as collateral for loans. Lenders will seek the highest return on your assets when you borrow against them. Selling gold is usually the best option. The lender might not do this. They may hold on to it. They might decide that they want to resell it. Either way you will lose potential profit.
So to avoid losing money, you should only lend against your gold if you plan to use it as collateral. Otherwise, it's better to leave it alone.
Are You Ready to Invest in Gold?
The answer will depend on how many dollars you have saved so far and whether you had gold as an investment option at the time. If you are unsure which option to choose, consider investing in both options.
Gold is a safe investment and can also offer potential returns. Retirees will find it an attractive investment.
While most investments offer fixed rates of return, gold tends to fluctuate. Its value fluctuates over time.
However, it doesn't necessarily mean that you shouldn't invest your money in gold. You should just factor the fluctuations into any overall portfolio.
Another benefit of gold is that it's a tangible asset. Gold is much easier to store than bonds and stocks. It can be easily transported.
Your gold will always be accessible as long you keep it in a safe place. Additionally, physical gold does not require storage fees.
Investing in gold can help protect against inflation. Because gold prices tend to rise along with other commodities, it's a good way to hedge against rising costs.
You'll also benefit from having a portion of your savings invested in something that isn't going down in value. Gold rises in the face of a falling stock market.
You can also sell gold anytime you like by investing in it. Like stocks, you can sell your position anytime you need cash. You don't even need to wait for your retirement.
If you do decide to invest in gold, make sure to diversify your holdings. Don't put all your eggs on one basket.
You shouldn't buy too little at once. Start by purchasing a few ounces. Add more as you're able.
The goal is not to become rich quick. It is to create enough wealth that you no longer have to depend on Social Security.
Even though gold is not the best investment, it could be an excellent addition to any retirement plan.
What is the best precious metal to invest in?
Answering this question will depend on your willingness to take some risk and the return you seek. Gold is a traditional haven investment. However, it is not always the most profitable. If you are looking for quick profits, gold might not be the right investment. If patience and time are your priorities, silver is the best investment.
If you don’t desire to become rich quickly, gold may be your best option. Silver might be a better investment option if steady returns are desired over a long period of time.
What Does Gold Do as an Investment Option?
The supply and demand for gold affect the price of gold. Interest rates can also affect the gold price.
Gold prices are volatile due to their limited supply. Physical gold is not always in stock.
Statistics
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (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)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.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)
External Links
finance.yahoo.com
bbb.org
irs.gov
investopedia.com
How To
The best place to buy silver or gold online
First, understand the basics of gold. It is a precious metal that is very similar to platinum. It is rare and used as money due to its durability and resistance against corrosion. It is very difficult to use and most people prefer to purchase jewelry made of it over actual bars of Gold.
There are two types of gold coins available today – one type is legal tender, while the other is called bullion. Legal tender coins are minted for circulation in a country and usually include denominations like $1, $5, $10, etc.
Bullion coins are only minted to be used for investment purposes. Their value increases over time because of inflation.
They aren't circulated in any currency exchange systems. A person can buy 100 grams of gold for $100. Every dollar spent on gold purchases, the buyer receives one gram of gold.
You should also know where to buy your gold. If you want to purchase gold directly from a dealer, then a few options are available. First, your local currency shop is a good place to start. You might also consider going through a reputable online seller like eBay. You might also consider buying gold from an online private seller.
Private sellers are individuals who offer gold for sale, either at wholesale prices or retail prices. Private sellers charge a 10% to 15% commission per transaction. That means you would get back less money from a private seller than from a coin shop or eBay. This option is often a great one for investors in gold, as it gives you greater control over the item's value.
The other option is to purchase physical gold. Physical gold is much easier to store than paper certificates, but you still have to worry about storing it safely. Physical gold should be stored in an impenetrable container, such a vault and safety deposit box to ensure its safety.
When buying gold on your own, you can visit a bank or a pawnshop. A bank can offer you a loan for the amount that you need to buy gold. Customers can borrow money from pawnshops to purchase items. Banks often charge higher interest rates then pawnshops.
Another way to purchase gold is to ask another person to do it. Selling gold is easy too. You can contact a company like GoldMoney.com to set up an account and receive payments right away.
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By: Kevin Helms
Title: SEC Chair Gary Gensler on Spot Bitcoin ETF Approval and Centralization
Sourced From: news.bitcoin.com/sec-chair-gary-gensler-sees-irony-in-spot-bitcoin-etf-approval-this-was-about-centralization/
Published Date: Tue, 16 Jan 2024 02:30:19 +0000
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