The Decline of GUSD
In recent years, the stablecoin market has faced significant challenges, particularly with the decline of Terra's stablecoin in mid-2022. Additionally, the New York Department of Financial Services (NYDFS) instructed Paxos to halt the issuance of BUSD last year. Alongside these setbacks, three other stablecoin assets have experienced substantial reductions in their supplies, resulting in diminished attention. Gemini's stablecoin, GUSD, for example, has seen a staggering 93% decrease in its supply.
GUSD's Ranking and Market Capitalization
As of the close of June 2023, GUSD was the ninth largest stablecoin by market capitalization. It also received an A grade from Bluechip, an independent stablecoin rating firm. However, the report noted that GUSD is not widely used in the crypto markets, leading to a lack of significant liquidity on exchanges. At that time, GUSD had a market capitalization of approximately $564.86 million, but it has since plummeted by 93.10% to $38.93 million.
By comparison, GUSD now represents only 0.0423% of USDT's $92.10 billion market cap. Furthermore, GUSD's global trade volume in the past day barely exceeded one million dollars, while USDT's volume reached $52.51 billion. Consequently, GUSD's ranking dropped from ninth to 24th among stablecoins and currently sits at 667th among 12,000 crypto assets. Although GUSD primarily trades on Gemini, it is also available on Coinbase and Curve.
The Decline of USDP
Another stablecoin that has experienced a decline this year is Paxos' pax dollar (USDP). It once had a market valuation of one billion dollars, but it has since decreased to $369 million, reflecting a 63% downturn or a loss of $631 million. Despite this decline, USDP remains the ninth largest stablecoin by market valuation, although it ranked seventh in June 2023. The contraction of BUSD issued by Paxos was expected, but the subsequent shrinkage of USDP was unexpected.
Paxos, however, recently received approval from NYDFS and plans to expand the presence of its stablecoin on Solana. Nevertheless, USDP's global trade volume is only $3.87 million, significantly lower than that of major stablecoins like USDC, which had $9.49 billion in trades in the past day.
The Descent of MIM
Magic internet money (MIM), a digital currency pegged to fiat and created by the defi project Abracadabra Money, has also fallen in the stablecoin hierarchy. Before Terra's downfall, MIM was the sixth largest stablecoin, but it has now dropped to the 21st spot. Its market valuation has decreased from $2.81 billion in April 2022 to $51 million today. Earlier this year, MIM's market cap was twice its current size before experiencing a sharp contraction.
MIM's trading volume is approximately $309,079, which is notably low even compared to smaller volumes. Trader Joe is currently the most active platform for trading MIM, with other notable platforms including Camelot and Uniswap V3, primarily paired with wrapped avalanche (WAVAX).
The Market's Uncertain Future
GUSD, USDP, and MIM have all experienced significant declines over the past year, creating a sense of impermanence in the stablecoin market. The downward trend for MIM began after Terra's UST lost its value, while GUSD's and USDP's downturns occurred in 2023. The failure of UST had a significant impact on the crypto industry, and even USDC faced a depegging incident when Silicon Valley Bank collapsed in March 2023. As a result, the stablecoin market is at a crossroads, with an uncertain future ahead.
What are your thoughts on the descent of GUSD, USDP, and MIM over the past year? Share your opinions in the comments section below.
Frequently Asked Questions
How much money should I put into my Roth IRA?
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. There are some rules that you need to keep in mind if you want to withdraw funds from these accounts before you reach 59 1/2. First, your principal (the original deposit amount) cannot be touched. No matter how much money you contribute, you cannot take out more than was originally deposited to the account. If you decide to withdraw more money than what you contributed initially, you will need to pay taxes.
You cannot withhold your earnings from income taxes. So, when you withdraw, you'll pay taxes on those earnings. Let's assume that you contribute $5,000 each year to your Roth IRA. Let's also say that you earn $10,000 per annum after contributing. On the earnings, you would be responsible for $3,500 federal income taxes. This leaves you with $6,500 remaining. You can only take out what you originally contributed.
So, if you were to take out $4,000 of your earnings, you'd still owe taxes on the remaining $1,500. You would also lose half of your earnings because they are subject to another 50% tax (half off 40%). So even though you received $7,000 in Roth IRA contributions, you only received $4,000.
There are two types if Roth IRAs: Roth and Traditional. Traditional IRAs allow pre-tax contributions to be deducted from your taxable tax income. To withdraw your retirement contribution balance plus interest, your traditional IRA is available to you. There are no restrictions on the amount you can withdraw from a Traditional IRA.
Roth IRAs won't let you deduct your contributions. Once you are retired, however, you may withdraw all of your contributions plus accrued interest. There is no minimum withdrawal amount, unlike traditional IRAs. It doesn't matter if you are 70 1/2 or older before you withdraw your contribution.
What's the advantage of a Gold IRA?
A gold IRA has many benefits. It is an investment vehicle that can diversify your portfolio. You decide how much money is put in each account and when it is withdrawn.
You also have the option to transfer funds from other retirement plans into a IRA. This is a great way to make a smooth transition if you want to retire earlier.
The best part? You don’t need to have any special skills to invest into gold IRAs. They're available at most banks and brokerage firms. Withdrawals are made automatically without having to worry about fees or penalties.
There are, however, some drawbacks. The volatility of gold has been a hallmark of its history. It is important to understand why you are investing in gold. Do you want safety or growth? Are you looking for growth or insurance? Only then will you be able make informed decisions.
If you want to keep your gold IRA open for life, you might consider purchasing more than one ounce. One ounce doesn't suffice to cover all your needs. Depending on your plans for using your gold, you may need multiple ounces.
You don’t necessarily need a lot if you’re looking to sell your gold. You can even live with just one ounce. But you won't be able to buy anything else with those funds.
How do I Withdraw from an IRA with Precious Metals?
First, determine if you would like to withdraw money directly from an IRA. You should also ensure that you have enough money to cover any fees and penalties associated with withdrawing funds.
You should open a taxable brokerage account if you're willing to pay a penalty if you withdraw early. If you choose this option, you'll also need to consider taxes owed on the amount withdrawn.
Next, determine how much money you plan to withdraw from your IRA. The calculation is influenced by several factors such as your age at withdrawal, the length of time you have owned the account and whether or not you plan to continue contributing to retirement plans.
Once you have an idea of the amount of your total savings you wish to convert into cash you will need to decide what type of IRA you want. While traditional IRAs are tax-free, Roth IRAs can be withdrawn at any time after you reach 59 1/2. However, Roth IRAs will charge income taxes upfront and allow you to access your earnings later without additional taxes.
After these calculations have been completed, you will need to open a brokerage bank account. To encourage customers to open accounts, brokers often offer signup bonuses and promotions. Avoid unnecessary fees by opening an account with your debit card, rather than your credit card.
When it comes time to withdraw your precious metal IRA funds, you will need a safe location where you can keep your coins. Some storage facilities will accept bullion bars, others require you to buy individual coins. Before you choose one, weigh the pros and cons.
Because you don't have to store individual coins, bullion bars take up less space than other items. You will need to count each coin individually. On the flip side, storing individual coins allows you to easily track their value.
Some prefer to keep their money in a vault. Others prefer to store them in a safe deposit box. Whichever method you choose, make sure you store your bullion safely so you can enjoy its benefits for years to come.
Can I buy gold with my self-directed IRA?
Your self-directed IRA can be used to purchase gold, but first you need to open an account with a brokerage firm such as TD Ameritrade. You can also transfer funds from an existing retirement fund.
The IRS allows individuals up to $5.500 annually ($6,500 if you are married and filing jointly). This can be contributed to a traditional IRA. Individuals can contribute as much as $1,000 per year ($2,000 if married filing jointly) to a Roth IRA.
If you do decide to invest in gold, you'll want to consider purchasing physical bullion rather than investing in futures contracts. Futures contracts, which are financial instruments based upon the price of gold, are financial instruments. These financial instruments allow you to speculate about future prices without actually owning the metal. But, physical bullion is real bars of gold or silver that you can hold in one's hand.
Statistics
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- 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)
- 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)
- 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)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
External Links
finance.yahoo.com
bbb.org
forbes.com
- Gold IRA, Add Sparkle to Your Retirement Nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
irs.gov
How To
A rising trend in gold IRAs
As investors look for ways to diversify their portfolios and protect themselves against inflation, the gold IRA trend is on the rise.
The gold IRA allows owners to invest in physical gold bullion and bars. It can be used as a tax-free way to grow and it is an alternative investment option for people who are not comfortable with stocks or bonds.
A gold IRA allows investors the freedom to manage their wealth without worrying about volatility in the markets. Investors can protect themselves from inflation and other possible problems by using the gold IRA.
Investors also have the benefit of physical gold, which has unique properties such durability, portability and divisibility.
Additionally, the gold IRA has many benefits. It allows you to quickly transfer your gold ownership to your heirs. The IRS doesn't consider gold a commodity or currency.
Investors who seek financial stability and a safe haven are finding the gold IRA increasingly attractive.
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Paxos Expands to Solana Following NYDFS Approval, Opening Up New Possibilities for Stablecoin
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