In a groundbreaking move, the U.S. Securities and Exchange Commission (SEC) has given its approval to 11 spot bitcoin exchange-traded funds (ETFs), a decision that has been eagerly awaited by cryptocurrency enthusiasts. Despite this significant regulatory milestone, the price of bitcoin has shown little movement over the past 24 hours. In contrast, ethereum has experienced a notable rally, surging by 9.1% on Wednesday and outperforming bitcoin.
A Turning Point in Cryptocurrency Regulation
The SEC's approval of these 11 ETFs marks a significant shift in the regulatory landscape for cryptocurrencies. It comes six years after the rejection of the Winklevoss Bitcoin Trust, the first Bitcoin ETF proposal, in March 2017. The approval of these new ETFs is seen as a watershed moment for the industry. However, the market's response has been unexpectedly muted. Normally, such approvals generate bullish sentiments, but bitcoin's price has remained relatively stagnant, suggesting a more complex market dynamic at play.
Possible Reasons for Bitcoin's Underperformance
Experts have been speculating on the reasons behind bitcoin's lackluster performance, pointing to various factors. One key factor is the role of two erroneous announcements: a false report by Cointelegraph regarding Blackrock's ETF, and the SEC's mistaken social media post on platform X. Additionally, the extended wait for the SEC's approval may have triggered a "buy the rumor, sell the news" effect, with the market anticipating the approval and subsequently selling off.
Ethereum's Surging Price
In stark contrast to bitcoin, ethereum has experienced a significant surge, highlighting the dynamic and ever-changing nature of the cryptocurrency market. This divergence in price trends following the approval of the ETFs raises important questions about future developments in the crypto industry. Immediately after the SEC's approval, the price of ETH soared to a high of $2,527 per unit.
Anticipation for a Spot-Based Ethereum ETF
Furthermore, there is a growing expectation of an imminent spot-based Ethereum ETF. This indicates a shift in investor attitudes and demonstrates the maturing nature of the market. The ongoing transformation of the crypto realm underscores the intriguing relationship between regulatory decisions and market reactions. Given the numerous misleading events that the crypto community has faced, it appears that a significant amount of speculative excitement has dissipated.
What are your thoughts on bitcoin's lackluster price performance? Share your opinions in the comments section below.
Frequently Asked Questions
Should You Open a Precious Metal IRA?
Before opening an IRA, it is important to understand that precious metals aren't covered by insurance. There is no way to recover money that you have invested in precious metals. This includes any loss of investments from theft, fire, flood or other circumstances.
Protect yourself against this type of loss by investing in physical gold or silver coins. These items are timeless and have a lifetime value. If you were to offer them for sale today, they would likely fetch you more than you paid when you bought them.
If you decide to open an IRA account, choose a reputable company that offers competitive rates and products. Consider using a third-party custody company to keep your assets safe and allow you to access them at any time.
You won't get any returns until you retire if you open an account. Do not forget about the future!
Can I buy or sell gold from my self-directed IRA
You can purchase gold with your self-directed IRA, but you must first open an account at a brokerage firm like TD Ameritrade. You can also transfer funds from an existing retirement fund.
The IRS allows individuals to contribute as high as $5,500 ($6,500 if they are married and jointly) to a traditional IRA. Individuals can contribute up $1,000 per annum ($2,000 if they are married and jointly) directly to a Roth IRA.
You might want to purchase physical bullion, rather than futures contracts if you are going to invest in gold. Futures contract are financial instruments that depend on the gold price. They let you speculate on future price without having to own the metal. However, physical bullion is real gold or silver bars you can hold in your hands.
Is gold a good IRA investment?
Gold is an excellent investment for any person who wants to save money. It can be used to diversify your portfolio. But there is more to gold than meets the eye.
It's been used as a form of payment throughout history. It is often called “the oldest currency in the world.”
Gold, unlike other paper currencies created by governments is mined directly from the earth. This makes it highly valuable as it is hard and rare to produce.
The price of gold fluctuates based on supply and demand. If the economy is strong, people will spend more money which means less people can mine gold. The result is that gold's value increases.
On the flipside, people may save cash rather than spend it when the economy slows. This causes more gold to be produced, which lowers its value.
It is this reason that gold investing makes sense for businesses and individuals. If you invest in gold, you'll benefit whenever the economy grows.
Also, your investments will earn you interest which can help increase your wealth. You won't lose your money if gold prices drop.
What proportion of your portfolio should you have in precious metals
To answer this question we need to first define precious metals. Precious metals are those elements that have an extremely high value relative to other commodities. This makes them very valuable in terms of trading and investment. Gold is today the most popular precious metal.
There are also many other precious metals such as platinum and silver. The price for gold is subject to fluctuations, but stays relatively stable in times of economic turmoil. It is also relatively unaffected both by inflation and deflation.
As a general rule, the prices for all precious metals tend to increase with the overall market. However, the prices of precious metals do not always move in sync with one another. When the economy is in trouble, for example, gold prices tend to rise while other precious metals fall. Investors expect lower interest rate, making bonds less appealing investments.
However, when an economy is strong, the reverse effect occurs. Investors want safe assets such Treasury Bonds and are less inclined to demand precious metals. These precious metals are rare and become more costly.
Therefore, to maximize profits from investing in precious metals, you must diversify across multiple precious metals. Additionally, since the prices of precious metals tend to rise and fall together, it's best to invest in several different types of precious metals rather than just focusing on one type.
How much should I contribute to my Roth IRA account?
Roth IRAs are retirement accounts that allow you to withdraw your money tax-free. You cannot withdraw funds from these accounts until you reach 59 1/2. However, if you do decide to take out some of your contributions before then, there are specific rules you must follow. First, your principal (the deposit amount originally made) is not transferable. You cannot withdraw more than the original amount you contributed. If you take out more than the initial contribution, you must pay tax.
The second rule is that you cannot withdraw your earnings without paying income taxes. Also, taxes will be due on any earnings you take. Let's take, for example, $5,000 in annual Roth IRA contributions. In addition, let's assume you earn $10,000 per year after contributing. You would owe $3,500 in federal income taxes on the earnings. You would have $6,500 less. Since you're limited to taking out only what you initially contributed, that's all you could take out.
Therefore, even if you take $4,000 out of your earnings you still owe taxes on $1,500. You would also lose half of your earnings because they are subject to another 50% tax (half off 40%). You only got back $4,000. Even though you were able to withdraw $7,000 from your Roth IRA,
There are two types of Roth IRAs: Traditional and Roth. Traditional IRAs allow pre-tax contributions to be deducted from your taxable tax income. Your traditional IRA can be used to withdraw your balance and interest when you are retired. There is no limit on how much you can withdraw from a traditional IRA.
Roth IRAs don't allow you deduct contributions. Once you are retired, however, you may withdraw all of your contributions plus accrued interest. Unlike a traditional IRA, there is no minimum withdrawal requirement. You don’t have to wait for your turn 70 1/2 years before you can withdraw your contributions.
Statistics
- (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)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- 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)
- 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 1991 – WSJ
- Want to Keep Gold in Your IRA at Home? It's Not Exactly Legal – WSJ
investopedia.com
irs.gov
law.cornell.edu
- 7 U.S. Code SS7 – Designation of boards for trade as contract markets
- 26 U.S. Code SS 408 – Individual retirement accounts
How To
How to Keep Physical Gold in an IRA
The best way to invest in Gold is by purchasing shares of companies that produce it. But this investment method has many risks as there is no guarantee of survival. If they survive, there's still the risk of losing money due to fluctuations in the price of gold.
You can also buy gold directly. You will need to either open an online or bank account or simply buy gold from a reliable seller. This option offers the advantages of being able to purchase gold at low prices and easy access (you don’t need to deal directly with stock exchanges). It's also easier to see how much gold you've got stored. The receipt will show exactly what you paid. You'll also know if taxes were not paid. You also have a lower chance of theft than stocks.
However, there are disadvantages. You won't be able to benefit from investment funds or interest rates offered by banks. You can't diversify your holdings, and you are stuck with the items you have bought. Finally, the tax man might ask questions about where you've put your gold!
BullionVault.com is the best website to learn about gold purchases in an IRA.
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