Introduction
The U.S. Securities and Exchange Commission (SEC) has recently announced a delay in its decision on the Global X Bitcoin Trust's application to list a spot bitcoin exchange-traded fund (ETF). The delay, which was made public on November 17, 2023, further extends the period of uncertainty surrounding the spot bitcoin ETF space.
Global X Spot Bitcoin ETF Delayed by SEC
The Global X Bitcoin Trust has put forth a proposal to offer investors exposure to bitcoin (BTC) through an ETF structure. This move has the potential to attract a wider investor base and increase the appeal of the crypto asset. The proposal was initially filed by the Cboe BZX Exchange on August 4, 2023, with the intention of listing and trading shares of the trust under the exchange's commodity-based trust shares rules.
SEC's Rationale for the Delay
The SEC has provided its reasoning for the delay, citing the need for further analysis to determine whether the proposed ETF aligns with the requirements of the Securities Exchange Act. The commission is specifically evaluating the proposal's consistency with the Act's mandates, which focus on preventing fraudulent and manipulative acts, as well as protecting investors and the public interest.
The SEC's concerns primarily revolve around the liquidity and transparency of the BTC market, as well as its susceptibility to manipulation. The commission's proceedings will allow for additional public input and a thorough assessment of these concerns. In the order, the SEC poses a question to the public, asking for their agreement or disagreement with the exchange's statements regarding the bitcoin market's resistance to price manipulation.
Reviewing the Proposal's Structure and Safeguards
One key aspect of the SEC's review is the sufficiency of the exchange's statements supporting the proposal, along with the overall structure and safeguards of the proposed Trust. The objective of the trust is to replicate the performance of bitcoin's price, while considering the trust's operational expenses. The trust's assets will mainly consist of BTC held by its custodian. Furthermore, the SEC is scrutinizing the Trust's unique mechanism of "in-kind" transactions for selling or redeeming shares.
SEC's Decision and Public Comments
It is important to note that the SEC's decision to delay does not indicate a final disapproval. The regulator is actively seeking public comments on the proposal and encourages interested parties to submit their views, data, and arguments. The SEC will have an additional 35-day period to review the Global X filing before making a decision, during which the public can provide their comments.
Conclusion
The SEC's decision to delay the approval of the Global X Bitcoin Trust's spot bitcoin ETF application prolongs the uncertainty in the spot bitcoin ETF space. The commission is focused on assessing the proposal's alignment with the Securities Exchange Act's requirements, particularly with regards to preventing fraudulent acts and protecting investors. The public is invited to share their thoughts and opinions on this matter by submitting comments during the review period.
Frequently Asked Questions
What are the benefits of a gold IRA
There are many benefits to a gold IRA. You can diversify your portfolio with this investment vehicle. You decide how much money is put in each account and when it is withdrawn.
You also have the option to transfer funds from other retirement plans into a IRA. If you are planning to retire early, this makes it easy to transition.
The best thing is that investing in gold IRAs doesn't require any special skills. They are readily available at most banks and brokerages. You do not need to worry about fees and penalties when you withdraw money.
However, there are still some drawbacks. The volatility of gold has been a hallmark of its history. Understanding why you invest in gold is crucial. Are you looking for safety or growth? Is it for insurance purposes or a long-term strategy? Only after you have this information will you make an informed decision.
If you plan to keep your gold IRA indefinitely, you'll probably want to consider buying more than one ounce of gold. One ounce won't be enough to meet all your needs. Depending upon what you plan to do, you could need several ounces.
You don't have to buy a lot of gold if your goal is to sell it. You can even get by with less than one ounce. You won't be capable of buying anything else with these funds.
How much are gold IRA fees?
An Individual Retirement Account (IRA) fee is $6 per month. This fee covers account maintenance fees, as well any investment costs that may be associated with your investments.
You may have to pay additional fees if you want to diversify your portfolio. The fees you pay will vary depending on the type of IRA that you choose. Some companies offer free check accounts, but charge monthly fee for IRA accounts.
Most providers also charge annual management costs. These fees range from 0% to 1%. The average rate per year is.25%. These rates can be waived if the broker is TD Ameritrade.
Do you need to open a Precious Metal IRA
It is essential to be aware of the fact that precious metals do not have insurance coverage before opening an IRA. You cannot recover any money you have invested. This includes losing all your investments due to theft, fire, flood, etc.
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.
Choose a reputable company with competitive rates and quality products if you are looking to open 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.
Do not open an account unless you're ready to retire. Do not forget about the future!
How is gold taxed in Roth IRA?
An investment account's tax is calculated based on the current value of the account, and not on what you paid originally. If you invest $1,000 in mutual funds or stocks and then later sell them, all gains are subjected to taxes.
However, if the money is deposited into a traditional IRA/401(k), the tax on the withdrawal of the money is not applicable. Dividends and capital gains are exempt from tax. Capital gains only apply to investments more than one years old.
These rules vary from one state to another. In Maryland, for example, withdrawals must be made within 60 days of reaching the age of 59 1/2 in order to qualify. Massachusetts allows you to wait until April 1. And in New York, you have until age 70 1/2 . To avoid penalties, you should plan ahead and take distributions as soon as possible.
How is gold taxed in an IRA?
The fair market value at the time of sale is what determines how much tax you pay on gold sales. Gold is not subject to tax when it's purchased. It is not income. If you sell it later you will have a taxable profit if the price goes down.
Loans can be secured with gold. Lenders try to maximize the return on loans that you take against your assets. For gold, this means selling it. This is not always possible. They might keep it. Or, they may decide to resell the item themselves. Either way you will lose potential profit.
To avoid losing money, only lend against gold if you intend to use it for collateral. If you don't plan to use it as collateral, it is better to let it be.
Is physical gold allowed in an IRA.
Gold is money and not just paper currency. It's an asset that people have used for thousands of years as a store of value, a way to keep wealth safe from inflation and economic uncertainty. Investors use gold today as part of their diversified portfolio, because it tends to perform better in times of financial turmoil.
Today, many Americans invest in precious metals such as gold and silver rather than stocks and bonds. Although owning gold does not guarantee that you will make money investing in it, there are many reasons to consider adding gold into your retirement portfolio.
One reason is that gold historically performs better than other assets during financial panics. The S&P 500 declined 21 percent during the same period. Gold prices increased nearly 100 per cent between August 2011 – early 2013. Gold was one of the few assets that performed better than stocks during turbulent market conditions.
The best thing about gold investing is the fact that there's virtually no counterparty risk. Your stock portfolio can fall, but you will still own your shares. You can still own your gold even if the company where you invested fails to pay its debt.
Finally, gold provides liquidity. This allows you to sell your gold whenever you want, unlike many other investments. Gold is liquid and therefore it makes sense to purchase small amounts. This allows you to take advantage of short-term fluctuations in the gold market.
Statistics
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- 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)
- (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)
- 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)
External Links
finance.yahoo.com
law.cornell.edu
- 7 U.S. Code SS7 – Designation board of trade as contract marketplaces
- 26 U.S. Code SS 408 – Individual retirement funds
cftc.gov
wsj.com
- Saddam Hussein’s InvasionHelped Uncage a Bear In 1989 – WSJ
- Are you interested in keeping gold in your IRA at-home? It's not exactly legal – WSJ
How To
Tips for Investing in Gold
Investing in Gold is a popular investment strategy. There are many advantages to investing in Gold. There are several ways to invest in gold. Some people buy physical gold coins, while others prefer investing in gold ETFs (Exchange Traded Funds).
Before you purchase any type or gold, here are some things to think about.
- First, verify that your country permits gold ownership. If the answer is yes, you can go ahead. You can also look at buying gold abroad.
- Secondly, you should know what kind of gold coin you want. You can go for yellow gold, white gold, rose gold, etc.
- Thirdly, it is important to take into account the gold price. It is better to start small, and then work your way 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.
- Don't forget to keep in mind that gold prices often change. It is important to stay up-to-date with the latest trends.
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By: Jamie Redman
Title: SEC Delays Decision on Global X Bitcoin Trust’s Spot Bitcoin ETF Application
Sourced From: news.bitcoin.com/sec-postpones-verdict-on-global-x-spot-bitcoin-etf-cites-market-manipulation-concerns-and-need-for-public-insight/
Published Date: Sat, 18 Nov 2023 19:00:28 +0000
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