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Former Citigroup Executives Launch Bitcoin Depositary Receipts as Complementary Product to Bitcoin ETFs

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Introducing Bitcoin Depositary Receipts

A group of former Citigroup executives have recently unveiled a new product known as bitcoin depositary receipts. Unlike bitcoin exchange-traded funds (ETFs), this innovative crypto product does not require registration with the U.S. Securities and Exchange Commission (SEC). The introduction of bitcoin depositary receipts aims to provide a complementary offering to spot bitcoin ETFs, which are expected to receive approval from the securities regulator in the near future.

Receipts Depositary Corporation (RDC)

The launch of the first-ever bitcoin depositary receipt (BTC DR) was announced by Receipts Depositary Corporation (RDC), a startup founded by former Citigroup executives. RDC explains that bitcoin depositary receipts function similarly to American Depositary Receipts (ADRs) for foreign stocks. These receipts operate within the U.S.-regulated market infrastructure and are cleared through the Depository Trust Company (DTC).

Issuance and Institutional Backing

RDC plans to issue its first BTC DRs in transactions exempt from registration under the Securities Act of 1933. These receipts will be offered to qualified institutional buyers (QIBs) in the coming weeks. Notably, RDC is backed by prominent institutions such as Franklin Templeton, BTIG, and Broadhaven Ventures. Furthermore, Broadridge Corporate Issuer Solutions will serve as the transfer agent, while Anchorage Digital Bank National Association will handle the custody of bitcoin.

Partnership with Anchorage Digital

Anchorage Digital, an OCC-chartered digital asset bank, has independently announced its partnership with Receipts Depository Corporation. Anchorage Digital expresses its pride in collaborating with RDC and looks forward to supporting the launch of the first-ever bitcoin depositary receipt.

RDC's Complementary Offering

Ankit Mehta, co-founder and CEO of RDC and a former Citigroup executive, explains that their product serves as a conversion tool for asset owners. Hedge funds, family offices, corporations, and large institutional investors can utilize RDC to convert their bitcoin into a DTC-eligible security, thereby enabling direct ownership within the U.S. clearance system.

What are your thoughts on this new product? Share your opinions in the comments section below.

Frequently Asked Questions

How much of your IRA should include precious metals?

Protect yourself against inflation by investing in precious metals like gold and silver. It's more than just an investment in retirement. It also prepares you for any economic downturn.

While silver and gold have seen significant increases in the last few years, they are still safe investments since they don’t fluctuate as often as stocks. Plus, there's always a demand for these materials.

Predictable and stable prices for gold and silver are common. They are more stable when the economy is growing than they are during recessions. This makes them excellent money-savers, and long-term investment options.

Your total portfolio should be 10 percent in precious metals. This percentage can be increased if your portfolio is more diverse.

How do I Withdraw from an IRA of Precious Metals?

You may consider withdrawing your funds if you have an account with a precious metal IRA company such as Goldco International Inc. If you decide to sell your metals this way, they will be much more valuable than if they were inside the account.

Here are the steps to help you withdraw money from your precious-metal IRA.

First, check to see if your precious metal IRA provider permits withdrawals. Some companies will allow withdrawals, while others won't.

The second step is to determine if selling your metals will allow you tax-deferred gain. This benefit is provided by almost all IRA providers. Some providers do not offer this benefit.

To find out if fees apply, thirdly check with your precious-metal IRA provider. Extra fees may apply for withdrawals.

Fourth, you should keep track of precious metal IRA investments for at minimum three years after they are sold. For capital gains to be calculated, wait until January 1, each year. You will then need to file Form 8949 which contains instructions on how to calculate the amount of gain that you have realized.

Not only must you file Form 8949 but also have to report to the IRS the sale of precious metals. This ensures you pay tax on any profits from your sales.

Finally, consult a trusted accountant or attorney before selling your precious metals. They will ensure you are following all the procedures and avoid making costly mistakes.

Are gold and silver IRAs a good idea?

This could be a great way to simultaneously invest in gold and silver. But there are other options. You can contact us at any time with questions about these types investments. We are always happy to assist!

Is a gold IRA worth it?

Yes, it is possible. But not as many as you might think. It depends on what level of risk you are willing take. A $10,000 investment per year for 20 years could lead to $1 million by retirement age. However, if you have all your eggs in one place, you could lose everything.

Diversifying your investments is essential. Inflation can make gold perform well. You want to invest in an investment asset that rises with inflation. Stocks do this well because they rise when companies increase profits. This is also true of bonds. They pay interest each year. They're great for economic growth.

What happens when inflation is absent? During deflationary periods, bonds fall in value while stocks fall further. Investors should refrain from putting all their savings into one type of investment such as a mutual fund or bond.

Instead, they should diversify their investments by investing in different types of funds. They could also invest in bonds and stocks. They could invest in both cash as well as bonds.

This way, they have exposure to both sides of the coin. They can see both the inflation and the deflation sides of the coin. They will still see a return in time.

What are the fees associated with an IRA for gold?

An average annual fee for an individual retirement plan (IRA) is $1,000. There are many types available: SIMPLE IRAs (SEP-IRAs), Roth IRAs, Traditional IRAs and Roth IRAs. Each type has its own set of rules and requirements. If you don't have tax-deferred investments, then earnings may need to be taxed. Consider how long you will keep the money. You will save money if you intend to keep your funds longer than a Roth IRA.

A traditional IRA lets you contribute up to $5,500 each year ($6,500 if your age is 50+). The Roth IRA allows unlimited contributions each year. The difference between them is simple: With a traditional IRA, you can withdraw the money after you retire without paying taxes. However, Roth IRA withdrawals are subject to tax.

Statistics

  • You can only purchase gold bars of at least 99.5% purity. (forbes.com)
  • Same tax rules as traditional IRA SEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less Before setting up a Silver IRA, understand the fees and IRS restrictions. (sltrib.com)
  • The IRS also allows American Eagle coins, even though they do not meet gold's 99.5% purity standard. (forbes.com)
  • If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal so that 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

en.wikipedia.org

forbes.com

takemetothesite.com

regalassets.com

How To

Things to Remember: Best Precious Metals Ira, 2022

Precious Metals Ira is one of the most popular investment options among investors. This article will help you understand what makes this asset class so attractive and how to make wise decisions when investing in precious metals.

These assets are renowned for their long-term potential growth. The historical data shows incredible returns for gold prices. Gold prices have increased by almost $1900 per troy ounce in the past 200 year, from $20 an ounce to nearly $1900 over that time. The S&P 500 Index, however, grew by only around half of that amount.

During times of economic uncertainty, people consider gold a safety net. When the stock markets is down, people tend not to hold onto their stocks but rather move into the safety and security of gold. As an inflation hedge, gold is also thought to be a good investment. Many economists believe in inflation. Therefore, they see owning physical gold as a way to protect your savings from future price increases.

Before you buy any precious metal, such as silver, gold, palladium or platinum, there are some things you should consider. First, you should know whether you want to invest in bullion bars or coins. Bullion bars can be bought in large quantities (like 100-ounces) and kept aside until required. You can also buy bullion bars in smaller quantities with coins.

The second is to think about where you intend to store precious metals. Some countries are safer than others. If you are in the US, it might be a good idea to store your precious metals abroad. You might also want to consider why you would store them in Switzerland if they aren't already.

Finally, you should decide whether you want to invest directly in precious metals or through “precious metals exchange-traded funds” (ETFs). ETFs are financial instruments that track the performance of different commodities, such as gold. These are a way to have exposure to precious metals but not necessarily own them.

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