Introduction
An independent nonprofit organization has expressed its disappointment and concern over the recent approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC). Better Markets, a nonprofit organization dedicated to promoting public interest in financial markets and the economy, argues that the approval has allowed for the mass marketing of a financial product that it deems worthless, volatile, and fraudulent.
Concerns Raised by Better Markets
In a press statement dated January 11, 2024, Better Markets stated that the SEC's approval of ETF applications for bitcoin does not align with existing laws. The organization also refuted claims that a court ruling in favor of Grayscale, a crypto asset manager, had forced the SEC's hand in approving the ETFs. Better Markets asserts that the court ruling simply criticized the SEC's lack of sufficient explanation for its previous rejection of the Grayscale's spot Bitcoin ETF.
According to Better Markets, the SEC should have rejected the ETF applications and provided a more detailed explanation for doing so. The organization argues that evidence of wash trading, where traders artificially inflate the trading volume to manipulate prices, should have been presented to support the rejection. Better Markets claims that as much as 77.5% of the total trading volume on unregulated exchanges was due to wash trading, and up to 95% of Bitcoin trading could be attributed to this practice.
Government Endorsement of Cryptocurrencies
The nonprofit organization also suggests that proponents of bitcoin and cryptocurrencies may use the SEC's approval as a government endorsement of these digital assets. However, Better Markets asserts that bitcoin remains a worthless financial product that primarily attracts speculators, gamblers, and criminals.
Lack of Effective Regulation
According to Better Markets, the crypto industry lacks effective regulatory oversight. The organization criticizes Rostin Behnam, the chairman of the Commodities Futures Trading Commission (CFTC), accusing him of being biased in favor of cryptocurrencies rather than fulfilling his role as an impartial regulator.
Conclusion
The approval of bitcoin ETFs by the SEC has drawn criticism from Better Markets, an independent nonprofit organization. The organization argues that the approval enables the mass marketing of a financial product that it considers worthless, volatile, and fraudulent. Better Markets also raises concerns about the lack of effective regulation in the crypto industry and the potential misinterpretation of the SEC's approval as a government endorsement of cryptocurrencies.
What are your thoughts on Better Markets' perspective? Share your opinions in the comments section below.
Frequently Asked Questions
What precious metals could you invest in to retire?
The best precious metal investments are gold and silver. 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: One of the oldest forms of currency, gold, is one of mankind's most valuable. 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. This is a great choice for people who want to avoid volatility. Silver tends to move up, not down, unlike gold.
Platinum: This precious metal is also becoming more popular. It is very durable and resistant against corrosion, much like silver and gold. It is however more expensive than its counterparts.
Rhodium: Rhodium is used in catalytic converters. It's also used in jewelry making. 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 is also cheaper. Investors looking to add precious and rare metals to their portfolios love it for these reasons.
Who holds the gold in a gold IRA?
The IRS considers any individual who holds gold “a form of income” that is subject to taxation.
This tax-free status is only available to those who have owned at least $10,000 of gold and have kept it for at minimum five years.
The purchase of gold can protect you from inflation and price volatility. But it's not smart to hold it if your only intention is to use it.
If you plan to eventually sell the gold, you'll need a report on its value. This could impact the amount of capital gains taxes your owe if you cash in your investments.
You should consult a financial planner or accountant to see what options are available to you.
What is a Precious Metal IRA (IRA)?
A precious metal IRA lets you diversify your retirement savings to include gold, silver, palladium, rhodium, iridium, osmium, osmium, rhodium, iridium and other rare metallics. These are “precious metals” because they are hard to find, and therefore very valuable. These are good investments for your cash and will help you protect yourself from economic instability and inflation.
Precious metals are often referred to as “bullion.” Bullion is the physical metal.
Bullion can be bought through many channels, including online retailers, large coins dealers, and some grocery shops.
You can invest directly in bullion with a precious metal IRA instead of buying shares of stock. This means you'll receive dividends every year.
Precious Metal IRAs don’t require paperwork nor have annual fees. You pay only a small percentage of your gains tax. You also have unlimited access to your funds whenever and wherever you wish.
What is the tax on gold in Roth IRAs?
A tax assessment for an investment account will be based on the current market value, and not what you paid initially. Any gains made by you after investing $1,000 in a stock or mutual fund are subject to tax.
If you place the money in a traditional IRA, 401(k), or other retirement plan, there is no tax when you take it out. 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. Maryland requires that you withdraw funds within 60 business days after reaching the age of 59 1/2. Massachusetts allows you to wait until April 1. New York is open until 70 1/2. To avoid penalty fees, it is important to plan and take distributions in time to pay all your retirement savings.
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 best form of investing is physical bullion, which is the most widely used. There are many ways to invest your gold. It's best to thoroughly research all options before you make a decision.
If you don't want to keep your wealth safe, buying shares in companies that extract gold and mining equipment could be a better choice. Owning gold stocks should work well if you need cash flow from your investment.
ETFs are an exchange-traded investment that allows you to gain exposure to the market for gold. You hold gold-related securities and not actual gold. These ETFs often include stocks of gold miners, precious metals refiners, and commodity trading companies.
Statistics
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (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)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- 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)
