Traditional Finance Professionals: Bitcoin Spot ETF Approved!

Kabir903

Taking a Positive View on the Inflow of Cryptocurrency Assets into 401(k) Retirement Plans

According to CNBC, several industry experts predict that, with the approval of a Bitcoin spot ETF by the SEC, Bitcoin will no longer be considered a game solely for high-risk traders, and there will be more 401(k) plans incorporating cryptocurrency assets.

Steven T. Larsen, founder of financial advisory firm Columbia Advisory Partners, stated that if approved, more companies are likely to decide to offer Bitcoin ETFs in their 401(k) series.

Institutional Concerns Regarding the U.S. Department of Labor Warning

Insiders point out that the warning issued by the Employee Benefits Security Administration (EBSA) of the U.S. Department of Labor in March of this year to retirement fund management companies, while not expressly prohibiting the introduction of cryptocurrencies into retirement plans, has been enough to make various industry players cautious.

Joshua Rubin, Legal Vice President at financial advisory firm Betterment, noted that while the Department of Labor did not explicitly ban it, 401(k) plan sponsors are quite attentive to the issue. A Bitcoin spot ETF could potentially alleviate some concerns raised by the Department of Labor.

The Department of Labor listed five major risks associated with cryptocurrencies at that time:

1. High volatility
2. Valuation concerns
3. Custody and trading records doubts
4. Evolving regulatory environment
5. Difficulty in making informed investment decisions

In its announcement, the Department of Labor mentioned that it is aware that fund companies are increasingly marketing cryptocurrencies to 401(k) retirement plans. Trustee fund institutions should adhere to and fully understand this, and retirement plans should prioritize the economic interests of users, ensure careful selection of investment targets, and not shift responsibility to users (trustees).

Tax Advantages for Long-Term Investors in Bitcoin

Mark Parthemer, Chief Investment Strategist at wealth management firm Glenmede, stated that investing in cryptocurrencies through retirement accounts for the long term can also enjoy tax advantages. In contrast, if the public stores cryptocurrency assets in regular brokerage accounts and sells them, capital gains tax may be due upon sale.

This aligns with the argument made by Sui Chung, CEO of Kraken subsidiary CF Benchmarks, who pointed out in a previous interview that purchasing Bitcoin ETFs through a 401(k) account would benefit from deferred taxation.

Kahn332

It's also a good thing if it gets approved.

Kalkin995

As long as it gets approval, there shouldn't be any issues.

Jiger955

This is talking about the possibility, right?