SEC Commissioner Hester Peirce Slams Agency for Delay in Approving Spot Bitcoin ETFs
SEC Commissioner Hester Peirce has expressed her dissatisfaction with the U.S. Securities and Exchange Commission (SEC) for the prolonged delay in approving spot bitcoin exchange-traded funds (ETFs). According to Peirce, the agency's arbitrary and inconsistent treatment of applications in this area will not only harm its reputation within the crypto industry but also hinder its ability to effectively regulate the markets as a whole.
Commissioner Peirce Highlights the Negative Implications of Delayed Approval
Following the approval of 11 spot bitcoin exchange-traded funds (ETFs) by the SEC, Commissioner Hester Peirce issued a statement emphasizing the negative consequences of the agency's delayed decision-making process. She stated that the approval of these ETFs marked the end of an unnecessary and protracted saga, which had spanned over a decade. However, Peirce believes that this approval could have come much earlier if not for the agency's reluctance.
Peirce pointed out that bitcoin-based products have been successfully trading for years under different regulatory regimes. She argued that the Commission should have taken comfort in the smooth operation of these products, even during periods of market stress and volatility. Instead, the SEC remained steadfast in its refusal to allow spot bitcoin ETFs into the U.S. markets. This, in turn, forced retail investors to seek alternative, less efficient means of gaining exposure to bitcoin in the securities markets.
Spot Bitcoin ETPs versus Bitcoin Futures ETPs
Peirce also highlighted the disparity in the SEC's treatment of spot bitcoin ETFs compared to bitcoin futures ETFs. While the agency had no issue approving bitcoin futures ETFs, it consistently denied approval for spot bitcoin ETFs. According to Peirce, this is despite the fact that spot bitcoin ETFs are less complex and easier to manage than their futures-based counterparts. The SEC's unexplained bias against spot bitcoin ETFs was only challenged recently in court, prompting the agency to reconsider its stance.
Missed Opportunities and Rebuilding Trust
Commissioner Peirce criticized the SEC for squandering a decade of opportunities to approve spot bitcoin ETFs. She believes that if the agency had applied the same standards used for other commodity-based ETFs, these products could have been approved years ago. However, the SEC's prejudice against the underlying asset and concerns over market manipulation prevented such approvals until a court intervened. Peirce expressed frustration with the agency's weak explanation for its change of heart.
Peirce concluded by stating that the SEC's arbitrary and capricious treatment of spot bitcoin ETF applications will have lasting negative effects on the agency's reputation. Diminished trust from the public will impede the SEC's ability to effectively regulate the markets beyond just the crypto industry.
What are your thoughts on SEC Commissioner Hester Peirce's criticism of spot bitcoin ETFs? Share your opinions in the comments section below.
Frequently Asked Questions
Can I hold a gold ETF in a Roth IRA?
While a 401k may not offer this option for you, it is worth considering other options, such an Individual Retirement Plan (IRA).
Traditional IRAs allow contributions from both the employer and employee. A Employee Stock Ownership Plan, or ESOP, is another way to invest publicly traded companies.
An ESOP offers tax benefits because employees can share in the company stock and any profits that it generates. The money in the ESOP can then be subject to lower tax rates than if the money were in the individual's hands.
A Individual Retirement Annuity (IRA), is also available. You can make regular payments to your IRA throughout your life, and you will also receive income when you retire. Contributions made to IRAs are not taxable.
What are some of the advantages and disadvantages to a gold IRA
An Individual Retirement account (IRA) is a better option than regular savings accounts in that interest earned is exempted from tax. This makes an IRA a great choice for people who are looking to save money but don’t want to pay any tax on the interest earned. But, this type of investment comes with its own set of disadvantages.
To give an example, if your IRA is withdrawn too often, you can lose all your accumulated funds. You might also not be able to withdraw from your IRA until the IRS deems you to be 59 1/2. A penalty fee will be charged if you decide to withdraw funds.
Another problem is the cost of managing your IRA. Many banks charge between 0.5%-2.0% per year. Other providers charge monthly management fees ranging from $10 to $50.
If you prefer to keep your money outside a bank, you'll need to purchase insurance. In order to make a claim, most insurers will require that you have a minimum amount in gold. You might be required to buy insurance that covers losses up to $500,000.
If you decide to open a gold IRA, it is important to know how much you can use. Some providers limit the amount of gold that you are allowed to own. Some providers allow you to choose your weight.
It's also important to decide whether or not to buy gold futures contracts. Futures contracts for gold are less expensive than physical gold. Futures contracts, however, allow for greater flexibility in buying gold. You can set up futures contracts with a fixed expiration date.
Also, you will need to decide on the type of insurance coverage you would like. The standard policy does not include theft protection or loss caused by fire, flood, earthquake. It does offer coverage for natural disasters. You may consider adding additional coverage if you live in an area at high risk.
Additional to your insurance, you will need to consider how much it costs to store your gold. Insurance won't cover storage costs. Banks charge between $25 and $40 per month for safekeeping.
If you decide to open a gold IRA, you must first contact a qualified custodian. A custodian keeps track of your investments and ensures that you comply with federal regulations. Custodians aren't allowed to sell your assets. Instead, they must maintain them for as long a time as you request.
Once you have chosen the right type of IRA to suit your needs, it is time to fill out paperwork defining your goals. You must include information about what investments you would like to make (e.g. stocks, bonds and mutual funds). The plan should also include information about how much you are willing to invest each month.
After filling in the forms, please send them to the provider. After reviewing your application, the company will send you a confirmation mail.
A financial planner is a good idea when opening a gold IRA. Financial planners are experts in investing and will help you decide which type of IRA works best for your situation. They can also help reduce your costs by suggesting cheaper options for purchasing insurance.
How much money should I put into my Roth IRA?
Roth IRAs allow you to deposit your money tax-free. These accounts are not allowed to be withdrawn before the age of 59 1/2. However, if your goal is to withdraw funds before that time, there are certain rules you must observe. First, your principal (the deposit amount originally made) is not transferable. You cannot withdraw more than the original amount you contributed. If you decide to withdraw more money than what you contributed initially, you will need to pay taxes.
The second rule says that you cannot withdraw your earnings without paying income tax. So, when you withdraw, you'll pay taxes on those earnings. Let's suppose that you contribute $5,000 annually to your Roth IRA. Let's also assume that you make $10,000 per year from your Roth IRA contributions. On the earnings, you would be responsible for $3,500 federal income taxes. You would have $6,500 less. Because you can only withdraw what you have initially contributed, this is all you can take out.
If you took $4,000 from your earnings, you would still owe taxes for the $1,500 remaining. In addition, 50% of your earnings will be subject to tax again (half of 40%). Even though you had $7,000 in your Roth IRA account, you only received $4,000.
There are two types if Roth IRAs, Roth and Traditional. Traditional IRAs allow you to deduct pretax contributions from your taxable income. To withdraw your retirement contribution balance plus interest, your traditional IRA is available to you. A traditional IRA can be withdrawn up to the maximum amount allowed.
A Roth IRA doesn't allow you to deduct your contributions. Once you are retired, however, you may withdraw all of your contributions plus accrued interest. There is no minimum withdrawal limit, unlike traditional IRAs. You don’t have to wait for your turn 70 1/2 years before you can withdraw your contributions.
Do You Need to Open a Precious Metal IRA
You should be aware that precious metals cannot be covered by insurance. There is no way to recover money that you have invested in precious metals. This includes any loss of investments from theft, fire, flood or other circumstances.
Protect yourself against this type of loss by investing in physical gold or silver coins. These items can be lost because they have real value and have been around for thousands years. If you were to offer them for sale today, they would likely fetch you more than you paid when you bought them.
Consider a reputable business that offers low rates and good products when opening an IRA. It is also a smart idea to use a third-party trustee who will help you have access to your assets at all times.
When you open an account, keep in mind that you won't receive any returns until your retirement. So, don't forget about the future!
What precious metals do you have that you can invest in for your retirement?
Silver and gold are two of the most valuable precious metals. Both can be easily bought and sold, and have been around since forever. Consider adding them to the list if you're looking to diversify and expand your portfolio.
Gold: The oldest form of currency known to man is gold. It is also extremely safe and stable. This makes it a good option to preserve wealth in uncertain times.
Silver: Silver has been a favorite among investors for years. It's an ideal choice for those who prefer to avoid volatility. Silver is more volatile than gold. It tends to rise rather than fall.
Platinium: Another form of precious metal is platinum, which is becoming more popular. Like gold and silver, it's very durable and resistant to corrosion. It's also more expensive than the other two.
Rhodium. Rhodium is used as a catalyst. It is also used to make jewelry. It is also very affordable in comparison to other types.
Palladium (or Palladium): Palladium can be compared to platinum, but is much more common. It's also less expensive. It is a preferred choice among investors who are looking to add precious materials to their portfolios.
Statistics
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (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)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
External Links
forbes.com
- Gold IRA, Add Sparkle to Your Retirement Nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
irs.gov
bbb.org
cftc.gov
How To
3 Ways to Invest in Gold for Retirement
It is crucial to understand how you can incorporate gold into your retirement plans. You have many options for investing in gold if there is a 401K account at your workplace. You might also consider investing in gold outside your workplace. For example, if you own an IRA (Individual Retirement Account), you could open a custodial account at a brokerage firm such as Fidelity Investments. If precious metals aren't your thing, you may be interested in buying them from a dealer.
These are three easy rules to remember if you invest in gold.
- Buy Gold with Your Money – You don't need credit cards, or to borrow money to finance your investments. Instead, cash in your accounts. This will protect your against inflation and increase your purchasing power.
- Physical Gold Coins to Own – Physical gold coin ownership is better than having a paper certificate. It's easier to sell physical gold coins rather than certificates. Physical gold coins are also free from storage fees.
- Diversify Your Portfolio. Never place all your eggs in the same basket. By investing in multiple assets, you can spread your wealth. This will reduce your risk and give you more flexibility in times of market volatility.
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By: Kevin Helms
Title: SEC Commissioner Criticizes Delay in Spot Bitcoin ETF Approval — ‘We Squandered a Decade of Opportunities’
Sourced From: news.bitcoin.com/sec-commissioner-criticizes-delay-in-spot-bitcoin-etf-approval-we-squandered-a-decade-of-opportunities/
Published Date: Sat, 13 Jan 2024 05:00:44 +0000
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