The Potential Impact of Spot Bitcoin ETFs
Cryptocurrency exchange Coinbase has expressed its belief that spot bitcoin exchange-traded funds (ETFs) could have a significant positive impact on the overall crypto market cap. According to Coinbase, the chances of the U.S. Securities and Exchange Commission (SEC) approving one or more spot bitcoin ETFs by the end of the fourth quarter of 2023 have greatly improved.
Coinbase's Prediction on Spot Bitcoin ETFs
Coinbase Institutional, a division of Coinbase (Nasdaq: COIN) that caters to institutional investors, released its November Monthly Outlook titled "Why an ETF Matters" on Sunday. David Duong, the Head of Institutional Research at Coinbase, explained that spot bitcoin ETFs have the potential to bring BTC further into the mainstream, making it accessible to millions of investors through broker-dealer, RIA (registered investment advisor), and tax-advantaged account structures.
Duong further stated that spot bitcoin ETFs could contribute billions of dollars to the total crypto market cap and generate new investment opportunities for the asset class. He emphasized that while this transformation will take time, ETFs will establish a more regulated environment, promote greater inclusion, and drive substantial demand growth.
Additionally, Duong highlighted the significance of spot bitcoin ETF approvals, as they would unlock a massive opportunity for the wealth management community, responsible for managing over a third of all wealth in the U.S. He also expressed the belief that ETFs could pave the way for the development of new financial products, such as lending and derivatives.
The Outlook for Spot Bitcoin ETF Approvals
According to Coinbase's report, the chances of the SEC approving one or more spot bitcoin ETFs before the end of the fourth quarter of 2023 have significantly improved. However, the report acknowledges that the current timeline has been complicated by the gridlock in the U.S. House of Representatives, which could potentially lead to a government shutdown on November 17. In this context, Coinbase suggests that there is currently an open window for the SEC to proactively approve ETF applications before any potential shutdown.
Coinbase also points out that recent weeks have seen applicants amending their prospectuses with updated language, indicating meaningful dialogue between these applicants and the SEC. While this is a common practice for applications in other asset classes, it is a first for the crypto industry, according to Coinbase's citation of Bloomberg Intelligence.
Share Your Thoughts
Do you agree with Coinbase's prediction that spot bitcoin ETFs will significantly contribute to the crypto market cap? Do you believe the SEC will approve some ETF applications this year? Let us know your thoughts in the comments section below.
Frequently Asked Questions
How much is gold taxed under a Roth IRA
An investment account's tax rate is determined based upon its current value, rather than what you originally paid. All gains, even if you have invested $1,000 in a mutual funds stock, are subject to tax.
The money can be withdrawn tax-free if it's deposited in a traditional IRA (or 401(k)). Only earnings from capital gains and dividends are subject to tax. These taxes do not apply to investments that have been held for more than one year.
Each state has its own rules regarding these accounts. Maryland's rules require that withdrawals be taken within 60 days after you turn 59 1/2. In Massachusetts, you can wait until April 1st. New York offers a waiting period of up to 70 1/2 years. To avoid any penalties, plan your retirement savings and take your distributions as early as possible.
Should You Get Gold?
Gold was once considered an investment safe haven during times of economic crisis. Many people are shifting away from traditional investments like bonds or stocks to instead look toward precious metals such gold.
While gold prices have been rising in recent years they are still low relative to other commodities, such as silver and oil.
Experts believe this could change soon. They believe gold prices could increase dramatically if there is another global financial crises.
They also pointed out that gold is gaining popularity due to its perceived value, and potential return.
Consider these things if you are thinking of investing in gold.
- Consider whether you will actually need the money that you are saving for retirement. It is possible to save enough money to retire without investing in gold. Gold does offer an extra layer of protection for those who reach retirement age.
- Second, ensure you fully understand the risks involved in buying gold. Each one offers different levels security and flexibility.
- Keep in mind that gold may not be as secure as a bank deposit. You may lose your gold coins and never be able to recover them.
Do your research before you buy gold. And if you already own gold, ensure you're doing everything possible to protect it.
What are the fees associated with an IRA for gold?
The Individual Retirement Account (IRA), fee is $6 per monthly. This includes account maintenance and any investment costs.
If you wish to diversify your portfolio, you may need to pay additional fees. These fees vary depending on what type of IRA you choose. For example, some companies offer free checking accounts but charge monthly fees for IRA accounts.
Most providers also charge annual management costs. These fees vary from 0% to 11%. The average rate is.25% per year. These rates are often waived if a broker like TD Ameritrade is used.
What Does Gold Do as an Investment Option?
The supply and the demand for gold determine how much gold is worth. It is also affected by interest rates.
Due to limited supplies, gold prices are subject to volatility. Additionally, physical gold can be volatile because it must be stored somewhere.
Is the government allowed to take your gold
Your gold is yours, so the government cannot confiscate it. You have earned it by working hard for it. It belongs entirely to you. This rule may not apply to all cases. You can lose your gold if you have been convicted for fraud against the federal governments. Your precious metals can also be lost if you owe tax to the IRS. However, if you do not pay your taxes, you can still keep your gold even though it is considered property of the United States Government.
Is gold a good IRA investment?
Anyone who is looking to save money can make gold an excellent investment. You can also diversify your portfolio by investing in gold. There is much more to gold than meets your eye.
It's been used throughout history as a currency, and even today, it remains a popular form of payment. It's often referred to as “the world's oldest currency.”
Gold is not created by governments, but it is extracted from the earth. It's hard to find and very rare, making it extremely valuable.
The supply and demand factors determine how much gold is worth. The strength of the economy means people spend more, and so, there is less demand for gold. This results in gold prices rising.
On the flipside, people may save cash rather than spend it when the economy slows. This increases the production of gold, which in turn drives down its value.
It is this reason that gold investing makes sense for businesses and individuals. You'll reap the benefits of investing in gold when the economy grows.
Also, your investments will earn you interest which can help increase your wealth. Plus, you won't lose money if the value of gold drops.
Is it a good retirement strategy to buy gold?
Although gold investment may not seem appealing at first glance due to the high average global gold consumption, it's worth considering.
The most popular form of investing in gold is through physical bullion bars. However, there are many other ways to invest in gold. You should research all options thoroughly before making a decision on which option you prefer.
If you're not looking to secure your wealth, it may be worth considering purchasing shares in mining equipment or companies that extract gold. If you require cash flow, gold stocks can work well.
You also can put your money into exchange-traded funds (ETFs), which essentially give you exposure to the price of gold by holding gold-related securities instead of actual gold. These ETFs usually include stocks of precious metals refiners or gold miners.
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (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)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- 7 U.S. Code SS7 – Designation Boards of Trade as Contract Markets
- 26 U.S. Code SS 408 – Individual retirement funds
3 Ways to Invest in Gold for Retirement
It's essential to understand how gold fits into your retirement plan. If you have a 401(k) account at work, there are several ways you can invest in gold. It is also possible to invest in gold from outside of your work environment. One example is opening a custodial accounts at Fidelity Investments if an IRA (Individual Retirement Account), if you already own one. You might also consider purchasing precious metals directly from a trusted dealer if they are not already yours.
These are three easy rules to remember if you invest in gold.
- Buy Gold with Cash – Avoid using credit cards or borrowing money to fund investments. Instead, cash in your accounts. This will help to keep your purchasing power high and protect you against inflation.
- Physical Gold Coins to Own – Physical gold coin ownership is better than having a paper certificate. Physical gold coins are easier to sell than certificates. Physical gold coins are also free from storage fees.
- Diversify Your Portfolio. – Do not put all your eggs into one basket. This is how you spread your wealth. You can invest in different assets. This can reduce market volatility and help you be more flexible.
By: Kevin Helms
Title: Coinbase Expects Spot Bitcoin ETFs to Boost Crypto Market Cap, SEC Approval Possible by Year-End
Sourced From: news.bitcoin.com/coinbase-expects-spot-bitcoin-etfs-to-add-billions-to-crypto-market-says-sec-approval-possible-by-year-end/
Published Date: Thu, 16 Nov 2023 04:30:35 +0000