JPMorgan Downgrades Coinbase Stock
Global investment bank JPMorgan has downgraded Coinbase Global (Nasdaq: COIN) from Neutral to Underweight, citing a difficult time ahead for the crypto market. The bank also set a price target of $80 for Coinbase stock.
Reasons for the Downgrade
JPMorgan analyst Kenneth Worthington explained in a note that the current crypto prices are already under pressure, and there is a greater potential for cryptocurrency ETF enthusiasm to further deflate. This could lead to lower crypto prices and trading volume.
Impact of Bitcoin ETFs
Worthington highlighted the approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) on January 10 as a potential threat to Coinbase. He mentioned that despite the launch of these ETFs, the initial net inflow into these funds has been lower than expected. Worthington believes that the expectations set by the crypto industry for the ETF launches are too high and unrealistic.
Concerns for Coinbase
Worthington acknowledged Coinbase's dominance in the U.S. exchange and its leadership in cryptocurrency trading globally. However, he sees a declining crypto market cap as a significant risk for the company. He expressed concerns about the potential impact on token prices, trading volume, and ancillary revenue opportunities for Coinbase.
Bitcoin Selloff Warning
Last week, another JPMorgan analyst warned of an incoming bitcoin selloff, anticipating a $3 billion outflow from Grayscale. Grayscale converted its bitcoin trust (GBTC) into a spot ETF following the SEC's approval. However, this conversion has resulted in massive outflows for Grayscale, while newly launched spot bitcoin ETFs like Blackrock's Ishares Bitcoin Trust (IBIT) have seen strong inflows.
Conclusion
JPMorgan's downgrade of Coinbase stock reflects the bank's concerns about the crypto market and the potential impact of bitcoin ETFs. The bank believes that the current enthusiasm for these ETFs may not meet expectations, leading to lower prices and trading volume. Coinbase will need to navigate these challenges in order to maintain its position as a leader in the crypto ecosystem.
What are your thoughts on JPMorgan's view on the crypto market, spot bitcoin ETFs, and Coinbase? Let us know in the comments section below.
Frequently Asked Questions
Is it possible to hold a gold ETF within a Roth IRA
A 401(k) plan may not offer this option, but you should consider other options, such as an Individual Retirement Account (IRA).
Traditional IRAs allow for contributions from both employees and employers. Another way to invest in publicly traded companies is through an Employee Stock Ownership Plan.
An ESOP offers tax benefits because employees can share in the company stock and any profits that it generates. The money invested in the ESOP is then taxed at lower rates than if it were held directly in the hands of the employee.
A Individual Retirement Annuity is also possible. An IRA lets you make regular, income-generating payments to yourself over your life. Contributions to IRAs can be made without tax.
How to Open a Precious Metal IRA
The first step in opening an Individual Retirement Account, (IRA), is to decide if it's something you want. Once you have decided to open an Individual Retirement Account (IRA), you will need to complete Form 806. You will then need to complete Form 5204 in order to determine which type IRA you are eligible. This form must be submitted within 60 days of the account opening. Once this has been completed, you can begin investing. You can also contribute directly to your paycheck via payroll deduction.
Complete Form 8903 if your Roth IRA option is chosen. The process for an ordinary IRA will not be affected.
To qualify for a precious-metals IRA, you'll need to meet some requirements. You must be at least 18 years of age and have earned income to qualify for a precious metals IRA. Your annual earnings cannot exceed $110,000 ($220,000 if you are married and file jointly) for any tax year. Contributions must be made regularly. These rules will apply regardless of whether your contributions are made through an employer or directly out of your paychecks.
You can use a precious-metals IRA to purchase gold, silver and palladium. However, physical bullion will not be available for purchase. This means you won't be allowed to trade shares of stock or bonds.
To invest directly in precious metals companies, you can also use precious metals IRA. This option is offered by some IRA providers.
However, investing in precious metals via an IRA has two serious drawbacks. First, they don't have the same liquidity as stocks or bonds. This makes it harder to sell them when needed. Second, they don’t produce dividends like stocks or bonds. Also, they don't generate dividends like stocks and bonds. You will eventually lose money rather than make it.
How does a gold IRA account work?
The Gold Ira Accounts are tax-free investment options for those who want to make investments in precious metals.
You can purchase physical bullion gold coins at any point in time. You don’t have to wait to begin investing in gold.
Owning gold as an IRA has the advantage of allowing you to keep it forever. Your gold holdings won't be subject to taxes when you pass away.
Your heirs inherit your gold without paying capital gains taxes. Because your gold doesn't belong to the estate, it's not necessary to include it on your final estate plan.
To open a IRA for gold, you must first create an individual retirement plan (IRA). Once you've completed this step, an IRA administrator will be appointed to your account. This company acts in the role of a middleman between your IRS agent and you.
Your gold IRA custodian is responsible for handling all paperwork and submitting the required forms to the IRS. This includes filing annual returns.
After you have established your gold IRA you will be able purchase gold bullion coin. Minimum deposit required is $1,000 If you make more, however, you will get a higher interest rate.
Taxes will be charged on gold you have withdrawn from an IRA. If you take out the whole amount, you'll be subject to income taxes as well as a 10 percent penalty.
Even if your contribution is small, you might not have to pay any taxes. There are exceptions. If you take out 30% of your total IRA assets or more, you will owe federal income taxes and a 20 percent penalty.
It is best to not take out more than 50% annually of your total IRA assets. You could end up with severe financial consequences.
Do You Need to Open a Precious Metal IRA
It is essential to be aware of the fact that precious metals do not have insurance coverage before opening an IRA. There are no ways to recover the money you lost in an investment. This includes losing all your investments due to theft, fire, flood, etc.
This type of loss can be avoided by investing in physical silver and gold coins. These items are timeless and have a lifetime value. You would probably get more if you sold them today than you paid when they were first created.
If you decide to open an IRA account, choose a reputable company that offers competitive rates and products. You should also consider using a third party custodian to protect your assets and give you access at any time.
Do not open an account unless you're ready to retire. So, don't forget about the future!
How much gold do you need in your portfolio?
The amount of capital required will affect the amount you make. If you want to start small, then $5k-$10k would be great. You could then rent out desks and office space as your business grows. This way, you don't have to worry about paying rent all at once. Rent is only paid per month.
It is also important to decide what kind of business you want to run. My company is a website creator. We charge our clients about $1000-2000 per monthly depending on what they order. Consider how much you expect to make from each client, if you decide to do this kinda thing.
As freelance work requires you to be paid freelancers, your monthly salary won't be as high as mine. So you might only get paid once every 6 months or so.
You must first decide what kind and amount of income you are looking to generate before you can calculate how much gold will be needed.
I recommend starting with $1k to $2k of gold, and then growing from there.
What tax is gold subject in an IRA
The fair market value at the time of sale is what determines how much tax you pay on gold sales. You don't have tax to pay when you buy or sell gold. It is not considered income. If you sell it later, you'll have a taxable gain if the price goes up.
Loans can be secured with gold. When you borrow against your assets, lenders try to find the highest return possible. This often means selling gold. The lender might not do this. They might keep it. They may decide to resell it. Either way you will lose potential profit.
In order to avoid losing your money, only lend against your precious metal if you plan to use it to secure other collateral. It is better to leave it alone.
Should You Get Gold?
In the past, gold was considered a haven for investors during economic turmoil. Many people are now turning their backs on traditional investments like stocks and bonds, and instead look to precious metals like Gold.
The trend for gold prices has been upward in recent years but they still remain low relative to other commodities like silver and oil.
Experts think this could change quickly. According to them, gold prices could soar if there is another financial crisis.
They also mention that gold is becoming more popular due to its perceived worth and potential return.
Consider these things if you are thinking of investing in gold.
- The first thing to do is assess whether you actually need the money you're putting aside for retirement. It is possible to save for retirement while still investing your gold savings. Gold does offer an extra layer of protection for those who reach retirement age.
- Second, be sure to understand your obligations before you purchase gold. Each account offers different levels of security and flexibility.
- Remember that gold is not as safe as a bank account. If you lose your gold coins, you may never recover them.
Do your research before you buy gold. If you already have gold, make sure you protect it.
Statistics
- 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)
- (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)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
External Links
bbb.org
forbes.com
- Gold IRA: Add some sparkle to your retirement nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
investopedia.com
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear In 1991 – WSJ
- You want to keep gold in your IRA at home? It's Not Exactly Legal – WSJ
How To
Investing in gold or stocks
These days, it might seem quite risky to invest your money in gold. The reason behind this is that many people believe that gold is no longer profitable to invest in. This belief comes from the fact most people see gold prices falling due to the global economy. They feel that gold investment would cause them to lose money. There are many benefits to investing in gold. Let's take a look at some of the benefits.
One of the oldest forms known of currency is gold. Its use can be traced back to thousands of years ago. It was used by many people around the globe as a currency store. It's still used by countries like South Africa as a method of payment.
The first point to consider when deciding whether or not you should invest in gold is what price you want to pay per gram. If you're interested in buying gold bullion, it is crucial that you decide how much per gram. You can always ask a local jeweler what the current market rate is if you don't have it.
It is also worth noting that although gold prices have declined recently, the cost of producing gold has increased. So, although gold prices have declined in recent years, the cost of producing it has not changed.
Another thing to remember when thinking about whether or not you should buy gold is the amount of gold you plan on purchasing. If you plan to buy enough gold to cover your wedding rings then it is probably a good idea to wait before buying any more. If you plan to do so as long-term investments, it is worth looking into. You can profit if you sell your gold at a higher price than you bought it.
We hope that this article has helped you gain a better understanding and appreciation for gold as an investment option. We recommend that you investigate all options before making any major decisions. Only then can informed decisions be made.
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