SEC Commissioner Caroline A. Crenshaw dissents from the commission's decision to approve spot bitcoin ETFs, raising concerns about market manipulation, bitcoin ownership concentration, and inadequate regulatory measures to protect investors.
SEC Commissioner Criticizes Approval of Spot Bitcoin ETF
Following the mass approval of spot bitcoin ETFs by the SEC, Commissioner Caroline A. Crenshaw has expressed her dissent through a letter, highlighting significant concerns regarding investor protection and market integrity.
Commissioner Crenshaw's dissent comes after the SEC's approval of rule changes that allow the listing and trading of bitcoin-based Exchange Traded Products (ETPs) on national securities exchanges. In her statement, she argues that these actions contradict the SEC's responsibility to safeguard investors and the public interest.
The primary concern of Commissioner Crenshaw revolves around the global spot markets for bitcoin, which she believes are susceptible to fraud and manipulation. She provides examples, such as the alleged manipulation of bitcoin prices by the former CEO of FTX, who kept the price below $20,000 for personal gain. Additionally, Crenshaw mentions the recent hacking incident of an SEC social media account, which resulted in a false announcement of spot bitcoin ETFs, causing significant volatility in bitcoin prices. Although the false announcement was later revealed as a hack, some members of the crypto community jokingly suggested that the SEC might use it as evidence to withhold approval.
Crenshaw also raises concerns about the concentration of bitcoin ownership:
The concentration of ownership among spot bitcoin holders leaves investors vulnerable to the trading practices of a few individuals. Analysis shows that bitcoin mining and holdings are highly concentrated.
She argues that the susceptibility to manipulation in spot bitcoin markets, combined with inadequate oversight, makes it challenging to consider the approved rule changes as effective investor protection measures.
In her critique of the recent Grayscale vs. SEC case, Crenshaw points out that the correlation analysis used to justify the approval of spot bitcoin ETPs is insufficient. She highlights significant differences in investor protection between futures and spot bitcoin ETPs, likening the latter to an unregulated, global free-for-all with limited recourse for investors in cases of fraud or manipulation.
Crenshaw also criticizes the creation of a new regulatory standard without clear guidelines and questions the reliability of the data used in the SEC's correlation analysis. In a broader critique of the cryptocurrency ecosystem, she expresses concerns about the tendency to replicate the existing financial system with less regulation and more risk, deviating from Bitcoin's original ideals as a peer-to-peer, censorship-resistant digital currency. She fears that closely linking Bitcoin to the traditional financial system may not serve investors' interests but rather inflate the prices of these investment products.
What are your thoughts on Commissioner Crenshaw's concerns? Please share your opinions in the comments section below.
Frequently Asked Questions
What proportion of your portfolio should you have in precious metals
To answer this question, we must first understand what precious metals are. Precious metals have elements with an extremely high worth relative to other commodity. They are therefore very attractive for investment and trading. Gold is today the most popular precious metal.
However, many other types of precious metals exist, including silver and platinum. The price for gold is subject to fluctuations, but stays relatively stable in times of economic turmoil. It also remains relatively unaffected by inflation and deflation.
The general trend is for precious metals to increase in price with the overall market. But they don't always move in tandem with one another. For example, when the economy is doing poorly, the price of gold typically rises while the prices of other precious metals tend to fall. Investors expect lower interest rates which makes bonds less appealing investments.
However, when an economy is strong, the reverse 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.
Diversifying across precious metals is a great way to maximize your investment returns. Additionally, since the prices of precious metals tend to rise and fall together, it's best to invest in several different types of precious metals rather than just focusing on one type.
What does gold do as an investment?
Gold's price fluctuates depending on the supply and demand. Interest rates are also a factor.
Due to limited supplies, gold prices are subject to volatility. You must also store physical gold somewhere to avoid the risk of it becoming stale.
What are the advantages of a gold IRA
You can save money on retirement by putting your money into an Individual Retirement Account. It's tax-deferred until you withdraw it. 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 designed for investors looking for higher returns. Roth IRAs are a way for individuals to make contributions after the age of 59 1/2, and then pay taxes on any earnings upon retirement. The earnings earned after they withdraw the funds aren't subject to any tax. This type of account might be a good choice if your goal is to retire early.
An IRA with a gold status is like any other IRA because you can put money into different asset classes. 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 a great choice for those who want their money to be invested, not spent.
Another benefit to owning IRA gold is the ability to withdraw automatically. This means that you don't need to worry about making monthly deposits. To ensure that you never miss a payment, you could set up direct debits.
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 the gold price tends to remain fairly stable. As a result, it's often considered a good choice when protecting your savings from inflation.
How do I Withdraw from an IRA with Precious Metals?
First decide if your IRA account allows you to withdraw funds. Next, ensure you have enough cash on hand to pay any penalties or fees that could be associated with withdrawing funds.
An IRA is not the best option if you don't mind paying a penalty for early withdrawal. Instead, open a taxable brokerage. This option is also available if you are willing to pay taxes on the amount 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 have determined the percentage of your total savings that you would like to convert to cash, you can then decide which type of IRA 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.
After these calculations have been completed, you will need to open a brokerage bank account. Many brokers offer signup bonuses or other promotions to encourage people to open accounts. However, a debit card is better than a card. This will save you unnecessary fees.
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. You will need to weigh each one before making a decision.
Bullion bars, for example, require less space as you're not dealing with individual coins. However, you'll need to count every coin individually. However, you can easily track the value of individual coins by storing them in separate containers.
Some people prefer to keep coins safe in a vault. Others prefer to store them in a safe deposit box. Whichever method you choose, make sure you store your bullion safely so you can enjoy its benefits for years to come.
Statistics
- 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)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- 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)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
External Links
irs.gov
wsj.com
- Saddam Hussein’s InvasionHelped Uncage a Bear In 1989 – WSJ
- Do you want to keep your IRA gold at home? It's Not Exactly Legal – WSJ
forbes.com
- Gold IRA: Add some sparkle to your retirement nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
investopedia.com
- Do You Need a Gold IRA to Get Retirement?
- What are the Options Types, Spreads. Example. And Risk Metrics
How To
Tips to Invest in Gold
Investing in Gold is one of the most popular investment strategies worldwide. There are many benefits to investing in gold. There are many ways you can invest in gold. Some people purchase physical gold coins. Others prefer to invest their money in gold ETFs.
You should consider some things before you decide to purchase any type of gold.
- First, find out if your country allows gold ownership. If the answer is yes, you can go ahead. Or, you might consider buying gold overseas.
- The second thing you need to do is decide what type of gold coins you want. You have options: you can choose from yellow gold, white or rose gold.
- Thirdly, you should take into consideration the price of gold. It is best to begin small and work your ways up. One thing that you should never forget when purchasing gold is to diversify your portfolio. Diversify your investments in stocks, bonds or real estate.
- Remember that gold prices are subject to change regularly. Be aware of the current trends.
—————————————————————————————————————————————————————————————–
By: David Sencil
Title: SEC Commissioner Crenshaw Disagrees with Approval of Spot Bitcoin ETF
Sourced From: news.bitcoin.com/sec-commissioner-crenshaw-dissents-from-spot-bitcoin-etf-approval/
Published Date: Fri, 12 Jan 2024 09:00:57 +0000
Leave a Reply