Investment bank TD Cowen predicts that the U.S. Securities and Exchange Commission (SEC) will approve spot bitcoin exchange-traded funds (ETFs) by the January 10 deadline. The bank's analyst views this approval as a "political necessity" for the SEC to solidify its role as a crypto regulator before Congress considers broader crypto legislation.
TD Cowen's Research Expectations
TD Cowen's research team, led by financial analyst Jaret Seiberg, expects the SEC to approve a spot bitcoin ETF by the January 10 deadline. This decision deadline is for a proposal submitted by Cathie Wood's Ark Invest and 21shares. The bank believes that this approval is crucial for the SEC to establish itself as a crypto regulator.
SEC's Need to Cement its Role
According to TD Cowen, the SEC's approval of bitcoin ETFs is a political necessity. The agency needs to solidify its position as a crypto regulator before Congress considers broader crypto legislation. Additionally, the bank believes that the SEC does not want to risk losing a legal challenge to its refusal to approve bitcoin ETFs, as seen in the case against Grayscale Investments.
Congress and Cryptocurrency Legislation
Congress is currently considering various cryptocurrency-related bills. Last year, the U.S. House Financial Services Committee passed four digital asset bills. TD Cowen believes that there is an opportunity for lawmakers to negotiate a comprehensive crypto market structure bill during the "lame duck" period following an election. This period refers to the time between the election and the inauguration of a new government.
SEC's Role in Investor Protections
In order to gain support from the Senate and the White House, TD Cowen suggests that the SEC needs to take the lead on investor protections. By demonstrating its commitment to safeguarding investors, the SEC can help pave the way for broader crypto legislation and market structure reform.
TD Cowen predicts that the SEC will approve spot bitcoin ETFs as a political necessity. By doing so, the SEC can solidify its role as a crypto regulator and avoid potential legal challenges. This approval could also contribute to the negotiation of comprehensive crypto market structure bills in Congress. The SEC's focus on investor protections will be key in gaining support from other branches of government.
What are your thoughts on the SEC's potential approval of spot bitcoin ETFs? Share your opinions in the comments section below.
Frequently Asked Questions
What is the best way to hold physical gold?
Gold is money, not just paper currency or coinage. 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. Today, investors invest in gold as part a diversified portfolio. This is because gold tends do better in financial turmoil.
Today, Americans prefer precious metals like silver and gold to stocks and bonds. It's not guaranteed that you'll make any money investing gold, but there are several reasons it might be worthwhile to add gold to retirement funds.
One reason is that gold historically performs better than other assets during financial panics. Gold prices rose nearly 100 percent between August 2011 and early 2013, while the S&P 500 fell 21 percent over the same period. Gold was one of the few assets that performed better than stocks during turbulent market conditions.
Gold is one of the few assets that has virtually no counterparty risks. You still have your shares even if your stock portfolio falls. However, if you have gold, your value will rise even if the company that you invested in defaults on its loans.
Finally, gold offers 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 take advantage of the short-term fluctuations that occur in the gold markets.
How to Open a Precious Metal IRA
First, you must decide if your Individual Retirement Account (IRA) is what you want. Once you have decided to open an Individual Retirement Account (IRA), you will need to complete Form 806. Then you must fill out Form 5204 to determine what type of IRA you are eligible for. This form should be completed within 60 days after opening the account. Once you have completed this form, it is possible to begin investing. You may also choose to contribute directly from your paycheck using payroll deduction.
You must complete Form 8903 if you choose a Roth IRA. Otherwise, the process will look identical to an existing IRA.
You'll need to meet specific requirements to qualify for a precious metals IRA. The IRS stipulates that you must have earned income and be at least 18-years old. You cannot earn more than $110,000 annually ($220,000 if married filing jointly) in any one tax year. And, you have to make contributions regularly. These rules are applicable whether you contribute through your employer or directly from the paychecks.
A precious metals IRA can be used to invest in palladium or platinum, gold, silver, palladium or rhodium. But, you'll only be able to purchase physical bullion. This means you won't be allowed to trade shares of stock or bonds.
Your precious metals IRA may also be used to invest in precious-metal companies. This option may be offered by some IRA providers.
However, investing in precious metals via an IRA has two serious drawbacks. First, they aren't as liquid than stocks and bonds. It's also more difficult to sell them when they are needed. They don't yield dividends like bonds and stocks. So, you'll lose money over time rather than gain it.
How much should your IRA include precious metals
It's important to understand that precious metals aren't only for wealthy people. You don't have to be rich to invest in them. There are many methods to make money off of silver and gold investments.
You may consider buying physical coins such as bullion bars or rounds. You could also buy shares in companies that produce precious metals. You may also be interested in an IRA transfer program offered by your retirement provider.
You can still get benefits from precious metals regardless of what choice you make. Even though they aren't stocks, they still offer the possibility of long-term growth.
Their prices rise with time, which is a different to traditional investments. If you decide to make a sale of your investment in the future, you will likely realize more profit than with traditional investments.
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (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)
How to Hold Physical Gold in an IRA
The best way of investing in gold is to purchase shares from companies that produce gold. However, this method comes with many risks because there's no guarantee that these companies will continue to survive. Even if the company survives, they still face the risk of losing their investment due to fluctuations in gold's price.
Alternative options include buying physical gold. This requires you to either open up your account at a bank or an online bullion dealer or simply purchase gold from a reputable seller. The advantages of this option include the ease of access (you don't need to deal with stock exchanges) and the ability to make purchases when prices are low. It is easier to view how much gold has been stored. You will receive a receipt detailing exactly what you paid. There's also less chance of theft than investing in stocks.
However, there are some disadvantages too. For example, you won't benefit from banks' interest rates or investment funds. Additionally, you won’t be able diversify your holdings. You will remain with the same items you bought. Finally, tax man may want to ask where you put your gold.
If you'd like to learn more about buying gold in an IRA, visit the website of BullionVault.com today!
By: Kevin Helms
Title: Investment Bank TD Cowen Predicts SEC Approval of Bitcoin ETFs as “Political Necessity”
Sourced From: news.bitcoin.com/sec-will-approve-spot-bitcoin-etf-to-maintain-regulatory-control-over-crypto-industry-analyst-says/
Published Date: Thu, 04 Jan 2024 05:30:40 +0000