U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler has issued a warning to investors considering crypto investments. This comes in the wake of a series of cautionary statements made by Gensler the day before regarding the risks associated with crypto investing. The SEC is expected to approve multiple spot bitcoin exchange-traded funds (ETFs) on Wednesday.
Gary Gensler's Advice to Crypto Investors
Gary Gensler, the chairman of the U.S. Securities and Exchange Commission (SEC), has released another statement regarding crypto investing. This statement comes at a time when there are high expectations for the approval of spot bitcoin exchange-traded funds (ETFs).
On a social media platform, Gensler urged investors to exercise caution when considering investments involving crypto assets. He emphasized that there are serious risks involved in crypto asset securities, despite them being marketed as new investment opportunities.
Gensler shared an article by Lori Schock, the Director of the SEC's Office of Investor Education and Advocacy, titled "Thinking About Buying the Latest New Cryptocurrency or Token?" The article highlights the various risks associated with crypto investing and offers advice on what investors should do.
One key piece of advice given is to not be swayed by high-pressure sales tactics, promises of guaranteed returns, or claims that seem too good to be true. Schock emphasized the importance of proceeding with caution, conducting thorough research, evaluating financial goals, and making informed investment decisions.
This is the second consecutive day that Gensler has addressed the risks of crypto investing. He issued warnings about these risks on Monday, and over the weekend, the SEC cautioned investors against falling into the fear of missing out (FOMO).
A Prelude to Imminent Spot Bitcoin ETF Approval?
Gensler's statements on crypto twice in one week have sparked optimism regarding the imminent approval of spot bitcoin ETFs by the SEC. A decision is expected to be made on Wednesday, which is the deadline for the joint proposal submitted by Cathie Wood's Ark Invest and 21shares.
Charles Gasparino, a reporter from Fox Business, shared on a social media platform that top securities lawyers who deal with the SEC believe Gensler's recent warnings are a prelude to the impending approval of 'spot' BTC ETFs.
According to one lawyer, there are no longer any impediments to SEC approval. The SEC is a regulator that focuses on disclosure and process, and the risks associated with crypto investing are now known. The trading processes are deemed adequate. However, it is important to note that risks remain high, especially with processes outside of the U.S. that cannot be effectively regulated.
On Tuesday evening, the official SEC account on X announced the approval of spot bitcoin ETFs. However, Gensler quickly posted on X, stating that the ETF approval post was unauthorized and that the agency's social media account had been compromised.
What are your thoughts on Gensler's repeated statements about crypto ahead of the spot bitcoin ETF decision deadline? Share your opinions in the comments section below.
Frequently Asked Questions
What is a Precious Metal IRA?
A precious metal IRA allows you to diversify your retirement savings into gold, silver, platinum, palladium, rhodium, iridium, osmium, and other rare metals. These metals are known as “precious” because they are rare and extremely valuable. These are good investments for your cash and will help you protect yourself from economic instability and inflation.
Bullion is often used to refer to precious metals. Bullion refers actually to the metal.
Bullion can be purchased through many channels including online retailers and large coin dealers as well as some grocery stores.
An IRA for precious metals allows you to directly invest in bullion instead of purchasing stock shares. This will ensure that you receive annual dividends.
Unlike regular IRAs, precious metal IRAs don't require paperwork or annual fees. Instead, you pay only a small percentage tax on your gains. Additionally, you have access to your funds at no cost whenever you need them.
What is the benefit of a gold IRA?
There are many advantages to a gold IRA. You can diversify your portfolio with this investment vehicle. You control how much money goes into each account and when it's withdrawn.
Another option is to rollover funds from another retirement account into a IRA with gold. This makes for an easy transition if you decide to retire early.
The best part about gold IRAs? You don't have to be an expert. They are offered by most banks and brokerage companies. Withdrawals can happen automatically, without any fees or penalties.
That said, there are drawbacks too. Gold has always been volatile. It is important to understand why you are investing in gold. Are you looking for safety or growth? Do you want to use it as an insurance strategy or for long-term growth? Only when you are clear about the facts will you be able take an informed decision.
If you want to keep your gold IRA open for life, you might consider purchasing more than one ounce. A single ounce isn't enough to cover all of your needs. You could need several ounces depending on what you plan to do with your gold.
You don't need to have a lot of gold if you are selling it. Even one ounce is enough. However, you will not be able buy any other items with those funds.
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 available. Some are better suited to college savings. Some are for investors who seek higher returns. Roth IRAs, for example, allow people to contribute after they turn 59 1/2. They also pay taxes on any earnings when they retire. However, once they begin withdrawing funds, these earnings are not taxed again. This type of account might be a good choice if your goal is to retire early.
Because you can invest money in many asset classes, a gold IRA works similarly to other IRAs. Unlike a regular IRA, you don't have to worry about paying taxes on your gains while you wait to access them. This makes gold IRA accounts excellent options for people who prefer to keep their money invested instead of spending it.
An additional benefit to owning gold through an IRA, is the ease of automatic withdrawals. 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 in economic turmoil, gold prices tends to remain relatively stable. Gold is a good option for protecting your savings from inflation.
Should You Buy Gold?
In times past, gold was considered a safe haven for investors in times of economic trouble. Many people today are moving away from stocks and bonds to look at precious metals, such as gold, as a way to diversify their investments.
Although gold prices have shown an upward trend in recent years, they are still relatively low when compared to other commodities like oil and silver.
Some experts think that this could change in the near future. They believe gold prices could increase dramatically if there is another global financial crises.
They also point out that gold is becoming popular because of its perceived value and potential return.
These are some things you should consider when considering gold investing.
- Consider first whether you will need the money to save for retirement. It is possible to save for retirement while still investing your gold savings. However, when you retire at age 65, gold can provide additional protection.
- Second, you need to be clear about what you are buying before you decide to buy gold. Each account offers different levels of security and flexibility.
- Finally, remember that gold doesn't offer the same level of safety as a bank account. Your gold coins may be lost and you might never get them back.
You should do your research before buying gold. If you already have gold, make sure you protect it.
How to Open a Precious Metal IRA
The first step is to decide if you want an Individual Retirement Account (IRA). Once you have decided to open an Individual Retirement Account (IRA), you will need to complete Form 806. To determine which type of IRA you qualify for, you will need to fill out Form 5204. This form must be submitted within 60 days of the account opening. After this, you are ready to start investing. You could also opt to make a contribution directly from your paycheck by using payroll deduction.
You must complete Form 8903 if you choose a Roth IRA. Otherwise, it will be the same process as an ordinary 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. For any tax year, your earnings must not exceed $110,000 ($220,000 for married filing jointly). You must also contribute regularly. These rules apply to contributions made directly or through employer sponsorship.
You can use a precious metals IRA to invest in gold, silver, palladium, platinum, rhodium, or even platinum. However, you won't be able purchase physical bullion. This means you won’t be able to trade stocks and bonds.
You can also use your precious metals IRA to invest directly in companies that deal in precious metals. This option may be offered by some IRA providers.
An IRA is a great way to invest in precious metals. However, there are two important drawbacks. First, they are not as liquid or as easy to sell as stocks and bonds. They are therefore more difficult to sell when necessary. Second, they don't generate dividends like stocks and bonds. You'll lose your money over time, rather than making it.
How does a gold IRA account work?
For people who are looking to invest in precious materials, Gold Ira account accounts provide tax-free investments.
You can purchase gold bullion coins in physical form at any moment. You don't have to wait until retirement to start investing in gold.
Owning gold as an IRA has the advantage of allowing you to keep it forever. Your gold assets will not be subjected tax upon your death.
Your heirs can inherit your gold and avoid capital gains taxes. You don't need to include your gold in your final estate report, as it isn't part of the estate.
To open a Gold IRA, you'll need to first set up an Individual Retirement Account (IRA). Once you've done that, you'll receive an IRA custody. This company acts like a middleman between the IRS and you.
Your gold IRA custody will take care of the paperwork and send the forms to IRS. This includes filing annual reporting.
Once your gold IRA is established, you can purchase gold bullion coins. Minimum deposit is $1,000 You'll get a higher rate of interest if you deposit more.
Taxes will apply to gold that you take out of an IRA. If you're withdrawing the entire balance, you'll owe income taxes plus a 10 percent penalty.
Even if your contribution is small, you might not have to pay any taxes. There are exceptions. For example, taking out 30% or more of your total IRA assets, you'll owe federal income taxes plus a 20 percent penalty.
It's best not to take out more 50% of your total IRA investments each year. A violation of this rule can lead to severe financial consequences.
Statistics
- 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)
- (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)
- 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)
- 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)
- 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)
External Links
wsj.com
- Saddam Hussein’s InvasionHelped Uncage a Bear In 1989 – WSJ
- You want to keep gold in your IRA at home? It's Not Exactly Lawful – WSJ
investopedia.com
bbb.org
finance.yahoo.com
How To
Guidelines for Gold Roth IRA
The best way to invest for retirement is by starting early. Start saving as soon as possible, usually at age 50. You can continue to save throughout your career. You must contribute enough each year to ensure that you have adequate growth.
You also want to take advantage of tax-free opportunities such as a traditional 401(k), SEP IRA, or SIMPLE IRA. These savings vehicles enable you to make contributions while not paying any taxes on the earnings, until they are withdrawn. They are a great option for those who do not have access to employer matching money.
Save regularly and continue to save over time. You will lose any potential tax advantages if you don't contribute enough.
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By: Kevin Helms
Title: SEC Chairman Gary Gensler Advises Caution for Crypto Investors
Sourced From: news.bitcoin.com/sec-chair-gary-gensler-issues-crypto-investing-advice-lawyers-see-as-prelude-to-spot-bitcoin-etf-approval/
Published Date: Wed, 10 Jan 2024 02:00:55 +0000
