Spot Bitcoin ETF Approvals: Cathie Wood's Perspective
Cathie Wood, the CEO of Ark Investment Management, recently shared her insights on the potential approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC). In an interview with CNBC, Wood discussed the significance of these ETFs and their impact on institutional investors.
Spot Bitcoin ETF Decision Deadline Approaching
Wood's firm, Ark Investment Management, along with 21shares, has a joint proposal awaiting a decision on Wednesday. This deadline marks the first for spot bitcoin ETF applications this year. Wood's comments shed light on the potential market response to the approval of these ETFs.
Green Light for Institutions
Wood expressed her belief that if the SEC approves spot bitcoin ETFs, it will serve as a green light for institutional investors. She revealed that Ark Investment Management has been in discussions with several institutions, and their interest has grown significantly now that the SEC is paving the way for these ETFs.
High Probability of Approval
When asked about the probability of her firm's spot bitcoin ETF proposal being approved by the SEC, Wood stated that the probability is very high. She explained that the SEC, after previously denying similar proposals, has now begun asking detailed and technical questions. Wood believes that the SEC has obtained the necessary information and that approval is likely.
Spot Bitcoin ETF Approval Impact
Contrary to predictions of a "sell on the news" event, Wood believes that the approval of spot bitcoin ETFs may not result in a significant market sell-off. She explained that the anticipation of such a sell-off has already influenced market positioning. Wood emphasized that the long-term investment horizon and institutional flows into bitcoin will have a substantial impact on the asset's price.
Bitcoin's Potential for Growth
Wood outlined her reasons for expecting continued growth in the price of bitcoin. She compared bitcoin to digital gold, highlighting the potential for substitution as the cryptocurrency market continues to mature. Wood also emphasized the impact of institutional allocations, predicting that even small allocations of 2.5% to 5% could drive the price of bitcoin higher.
Bitcoin as a Scarce Asset
Wood highlighted the scarcity of bitcoin as a key factor contributing to its potential price appreciation. With a limited supply of 21 million units, and a significant portion of bitcoin already held by long-term investors, Wood sees bitcoin as a scarce asset. This scarcity, combined with growing institutional interest, could further fuel its value.
Share Your Opinion
What are your thoughts on Cathie Wood's perspective regarding the impact of spot bitcoin ETFs? Let us know in the comments section below.
Frequently Asked Questions
How to Open a Precious Metal IRA
You can open an IRA in precious metals by opening a Roth Individual Retirement Account (IRA), which you can self-direct.
This account is more advantageous than other types of IRAs, because you don’t have to pay taxes on any interest earned from your investments until they are withdrawn.
This makes it very attractive to people who want to save money but also need a tax break.
You do not have to only invest in gold and silver. You can invest anywhere you wish, as long as it is within the IRS guidelines.
People often think of silver and gold when they hear “precious metal” but there are many other precious metals.
Some examples include palladium, platinum, rhodium, osmium, iridium, and ruthenium.
Bullion Coins, Bars
One of your easiest ways to get into precious metals is to purchase bullion coins. Bullion refers to physical ounces (or grams) of gold and/or silver.
Bullion bars and coins can be purchased to receive actual pieces.
You might not notice any changes in your pocket when you buy bullion coins or bars from a store but you will see some benefits over the long-term.
You'll be able to see a piece tangible of history. Each coin and each bar have a story.
You'll often find that the face value of a coin is far lower than its nominal value. The American Eagle Silver Coin cost $1.00 an ounce in 1986 when it was first introduced. Today, however, the price of an American eagle is closer to $40.00 per ounce.
Bullion's price has risen dramatically since its inception, so many investors would rather invest in bullion coins than futures.
For those who want to purchase precious metals, another option is investing in shares of mining companies. You are investing in the ability of mining companies to produce gold or silver.
You will get dividends based off the company's profits in return. These dividends will then be paid out to shareholders.
Furthermore, the company has the potential to grow. As the demand for the product grows, the company's share price should increase.
You should diversify because these stocks have a tendency to fluctuate in their prices. This means you can spread your risk to multiple companies.
But, remember that mining companies, like all stock market investments, are susceptible to financial loss.
If gold prices drop significantly, your share of ownership could be worthless.
The Bottom Line
Precious metals such silver and gold provide an economic refuge from uncertainty.
Silver and gold, however, can experience wild swings in their prices. If you're looking to make a long-term, profitable investment in precious metallics, then consider opening a precious precious metals IRA Account with a reputable business.
This allows you to benefit from tax advantages and physical assets.
How do you choose an IRA.
Understanding the type of account you have is the first step towards finding an IRA that suits your needs. This is regardless of whether you are looking to invest in a Roth IRA. You will also need to know how much you can invest.
The next step is to choose the best provider for you. Some providers offer both accounts, while others specialize in just one type.
Finally, you should consider the fees associated with each option. Fees vary widely between providers and may include annual maintenance fees and other charges. A monthly fee may be charged by some providers depending on how many shares your company holds. Some providers charge only once a quarter.
What type of IRA are you using to buy precious metals stocks?
An Individual Retirement Account (IRA) is an investment vehicle most employers and financial institutions offer. You can contribute to an IRA account which grows tax-deferred and can be withdrawn at any time.
An IRA allows you to save taxes and pay them later when you retire. This allows for more money to be deposited in your retirement plan today than having to pay taxes tomorrow on it.
An IRA's beauty is that earnings and contributions grow tax-free up to the time you withdraw them. If you do withdraw the funds earlier than that, you will be subject to penalties.
You can also make additional contributions to your IRA after age 50 without penalty. If you choose to take withdrawals from your IRA during retirement, you'll owe income taxes and a 10% federal penalty.
A 5% IRS penalty is applicable to withdrawals made before the age of 59 1/2. A 3.4% IRS penalty is applicable to withdrawals made between the ages of 59 1/2 and 701/2.
The IRS will penalize withdrawals of more than $10,000 annually.
Which is stronger, 14k or sterling gold?
Sterling silver, which contains 92% pure sterling silver instead of just 24%, is a stronger metal than gold or silver.
Sterling silver, also known as fine or sterling silver, is made of a combination of silver and other metals like copper and zinc.
It is generally believed that gold is very strong. It is very difficult to separate it from its metal counterpart. If you dropped an object onto a piece or gold, it would break into thousands instead of two halves.
But silver isn’t nearly as sturdy as gold. A sheet of silver would likely bend and fold if you dropped an item on it.
Silver is usually used in jewelry and coins. Silver's value can fluctuate depending on the supply and demand.
Can I physically possess gold in my IRA account?
Many people ask themselves whether it is possible to physically own gold in an IRA. This is a fair question because there isn't any legal way to do it.
But when you look closely at the law, nothing stops you from owning gold in an IRA.
Problem is, most people don’t realize how much they can save by putting gold in an IRA and not keeping it in their home.
It's simple to throw out gold coins but difficult to put them into an IRA. If you decide to keep your precious metal in your own home you will have to pay two taxes. Two taxes will be charged: one to the IRS, one to the state you live in.
You can also lose your gold and have to pay twice the taxes. So why would anyone want to keep their gold in their home?
You might argue that you need the security of knowing that your gold is safe in your home. You can protect your gold from theft by storing it somewhere more secure.
If you intend to visit often, don't leave your gold unattended in your home. Thieves can easily steal your gold if you don't keep it safe.
It is better to keep your gold in an insured vault. Your gold will be protected against fire, floods, earthquakes, and robbery.
Another advantage to storing your gold in a vault is that you won't have to worry about paying property tax. Instead, income tax will be charged on any gains made from the sale of your precious metal.
A IRA can be a great option if you want to avoid paying tax on your gold. You won't be subject to income tax if you earn interest from your gold with an IRA.
Capital gains tax is not required on gold. If you decide to cash it out, you will have full access to its value.
Because IRAs have federal regulation, it won't be difficult to transfer your gold to another bank if there is a move.
The bottom line is that you can own gold in your IRA. Fear of theft is all that holds you back.
Are precious metal IRAs a good way to invest?
It all depends on your willingness to take the risk of an IRA account losing its value. These are good if you have $10,000 of cash and don't expect them grow quickly. These are not the best investments if there is a long-term plan for saving money (like gold) or if you want to invest more in assets that will rise in value over time. They can also come with fees that could cut into any gains.
- 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)
- Silver must be 99.9% pure • (forbes.com)
- To qualify as IRA allowable precious metals and be accepted by STRATA, the following minimum fineness requirements must be met: Gold must be 99.5% pure, silver must be 99.9% pure, and platinum and palladium must both be 99.95% pure. (stratatrust.com)
- You can only purchase gold bars of at least 99.5% purity. (forbes.com)
How to Buy Gold For Your Gold IRA
Precious metal is a term used to describe gold, silver, platinum, palladium, rhodium, iridium, osmium, ruthenium, rhenium, and others. It's any element naturally occurring with atomic numbers 79 to 110 (excluding helium), that is valued for its rarity or beauty. Precious metals include gold and silver. Precious metals can be used to make money, jewelry, industrial products, and art objects.
Supply and demand affect the gold price daily. There has been a significant demand for precious metals over the past decade as investors look for safe havens in unstable economies. This increased demand has caused prices to rise significantly. Some are concerned about the increased cost of production and have resisted investing in precious materials.
Gold is a solid investment as it is both rare and long-lasting. Unlike many investments, gold never loses value. Plus, you can buy and sell gold without paying taxes on your profits. There are two ways to invest in gold. There are two ways to invest in gold: buy gold bars and coins; or, you can invest directly in gold futures.
You can instantly have liquidity with physical gold bars and coins. They are easy to trade and keep. But they don't offer much protection against inflation. Consider purchasing gold bullion if you want to be protected from rising prices. Bullion, also known as physical gold and available in different sizes, is physical. One-ounce pieces are available for billions, while larger quantities such as kilobars and tens of thousands can be purchased. Bullion is often stored in vaults, which are safe from fire and theft.
Buy gold futures to own shares and not actual gold. Futures allow you to speculate on how the price of gold might change. You can expose yourself to the price of gold by buying gold futures without having to own the physical commodity.
If I wanted to speculate about whether gold's price would rise or fall, I could buy a gold contract. When the contract expires, my position will either be “long” or “short.” A long contract indicates that I believe the price for gold will rise. Therefore, I'm willing give money to someone now in exchange of the promise that I will get more money after the contract ends. A shorter contract will mean that I expect the price to fall. I'm willing and able to take the money now, in return for the promise that I will make less money later.
When the contract expires, I'll receive the amount of gold specified in the contract plus interest. I am now exposed to the price of gold, without actually holding it.
Precious metals are great investments because they're extremely hard to counterfeit. Precious metals can't be counterfeited like paper currency. However, new bills can be printed to make them look more authentic. Because of this, precious metals have traditionally held their value well over time.
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