Ark Invest CEO's Optimistic Outlook on Bitcoin ETFs
Cathie Wood, the CEO of Ark Investment Management, believes that institutional investors will embrace spot bitcoin exchange-traded funds (ETFs) once they are approved by the U.S. Securities and Exchange Commission (SEC). In a recent interview with Yahoo Finance, Wood expressed her perspective on the potential impact of Bitcoin ETFs on the market.
Spot Bitcoin ETFs and Ark Invest
Ark Investment Management, also known as Ark Invest, is one of the applicants seeking approval from the SEC to launch a spot bitcoin ETF. The SEC is expected to make a decision on Ark's application by January 10. Wood mentioned that the SEC's attitude towards spot bitcoin ETFs has shifted in recent months. Previously, the SEC had denied several applications without providing any feedback. However, more recently, the SEC has been actively engaging with applicants, asking detailed and technical questions. Wood considers this change in approach to be positive and believes it indicates a potential approval of spot bitcoin ETFs.
Positive Interactions with the SEC
Wood expressed her satisfaction with the SEC's research team and their efforts to understand crypto assets. She mentioned that Ark Invest, along with other applicants, has had the opportunity to meet with SEC researchers focused on digital assets. Wood praised their knowledge and thoughtful approach, stating that their input provides comfort to applicants like Ark Invest. She emphasized that it is important for the SEC to address any uncertainties they may have before approving a spot bitcoin ETF.
Outlook for Spot Bitcoin ETF Approvals
Wood is optimistic about the SEC's decision regarding spot bitcoin ETF applications. She believes that multiple spot bitcoin ETFs will be approved in January. While she acknowledges that she does not have insider knowledge, Wood's optimism is based on the actions and engagement of the SEC with the applicants.
Current Status of Spot Bitcoin ETF Proposals
At present, the SEC is considering 13 spot bitcoin ETF proposals. The regulator has been actively meeting with issuers, including Ark Invest, Blackrock, Fidelity, and Grayscale Investments, to discuss their applications. These issuers have been given a deadline to file their amendments, which will be considered for the first wave of spot bitcoin ETF decisions.
Anticipatory Price Movements and Institutional Involvement
Wood highlighted the recent price movements of bitcoin, driven by anticipation of spot bitcoin ETF approval. She explained that there may be a short-term sell-off after the Jan. 10 deadline as traders "sell on the news." However, Wood expects institutional investors to participate in the crypto asset world once a spot bitcoin ETF receives approval. She believes that allocating a small percentage of institutional assets to a bitcoin ETF will be an easy and efficient way for institutions to gain exposure to bitcoin. Wood concluded that this increased institutional involvement will have a significant impact on the price of bitcoin.
Bitcoin's Scarcity Value
Wood also discussed the scarcity value of bitcoin, noting that there are currently 19.5 million bitcoin in circulation, with a maximum limit of 21 million units. She highlighted the increasing number of long-term holders who have not moved their bitcoin in over a year, amounting to 15 million bitcoin. Wood believes that this scarcity value, combined with institutional interest, will continue to drive the price of bitcoin.
What are your thoughts on Cathie Wood's optimistic outlook for spot bitcoin ETFs? Share your opinion in the comments section below.
Frequently Asked Questions
How Much of Your IRA Should Include Precious Metals?
Investing in precious metals such as gold and silver is the best way to protect yourself from inflation. It's more than just an investment in retirement. It also prepares you for any economic downturn.
Although silver and gold prices have increased in recent years, they can still be considered safe investments as they don't fluctuate nearly as much as stocks. Plus, there's always a demand for these materials.
The prices of gold and silver are generally predictable and stable. They tend to rise during economic growth and drop during recessions. This makes them great long-term investors and money-savers.
You should invest 10 percent of your total portfolio into precious metals. That percentage could go higher if you want to diversify your portfolio further.
Are precious metals allowed in an IRA?
This question is dependent on whether an IRA owner wishes to diversify into gold or silver, or keep them safe.
If he does want to diversify, then there are two options available to him. He could either buy physical bars of silver and gold from a dealer, or he could sell the items to the dealer at year's end. He doesn't wish to sell any of his precious metal investments. He should keep them, as they are perfectly safe to be stored in an IRA account.
How do I choose the right IRA for me?
Understanding your account type is the first step to finding the best IRA. This is regardless of whether you are looking to invest in a Roth IRA. Also, you should know how much money is available for investment.
The next step is determining which provider fits your situation best. Some providers offer both accounts while others are specialized in one.
Last, consider the fees associated to each option. There may be annual maintenance fees, as well as other fees. Fees for each provider can vary widely. A monthly fee may be charged by some providers depending on how many shares your company holds. Others only charge once per quarter.
What is a Precious Metal IRA?
Precious metals are an excellent investment for retirement accounts. They have been around for centuries and are still very valuable today. Investing in precious metals such as gold, silver, and platinum is also a great way to diversify your portfolio and protect against inflation.
Some countries also allow citizens to keep their money in foreign currency. You can purchase gold bars from Canada and keep them at your home. You can then sell the same gold bars to Canadian dollars when you return home to visit your family.
This is a quick and easy way of investing in precious metals. It's especially useful for anyone who lives outside North America.
Does a gold IRA make money?
Yes, but not as often as you think. It all depends on your willingness to take on risk. You could have $1 million if you're willing to invest $10,000 each year for 20 years. However, if you have all your eggs in one place, you could lose everything.
You need to diversify your investments. Inflation can make gold perform well. You want to invest in an asset class that rises along with inflation. Stocks do this well because they rise when companies increase profits. Bonds also do this well. They pay annual interest. They are great during economic growth.
What happens if there is no inflation? In deflationary periods stocks and bonds both fall in value. Investors should not put all of their savings in one investment such as a stock mutual fund or bond.
Instead, they should combine different types funds. They could also invest in bonds and stocks. They could invest in both cash as well as bonds.
By doing so, they are exposed to both the positive and negative sides of the coin. They can see both the inflation and the deflation sides of the coin. They will still see a return in time.
- 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)
- Silver must be 99.9% pure • (forbes.com)
- 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)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal so that 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)
- Gold IRA: Add some sparkle to your retirement nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
How to determine if a Gold IRA works for you
Individual Retirement account (IRA), is the most widely used type of retirement plan. IRAs are available through employers, banks, mutual funds, and financial planners. Individuals are allowed to contribute up to $5,000 each year to IRAs without having to pay tax consequences. This amount can be contributed to any IRA, regardless of your age. There are limitations on the amount of money that you can contribute to certain IRAs. For example, a Roth IRA contribution is not allowed if you are less than 59 1/2. You must wait until your age 70 1/2 to make contributions if you are under 50. Some people may also be eligible for matching contributions if they work for their employer.
There are two main types of IRAs: Traditional and Roth. Traditional IRAs can be used to invest in stocks or bonds, as well other investments. Roth IRAs are only available for after-tax dollars. Roth IRA contributions don't get taxed as soon as they are made. However, withdrawals from a Roth IRA will be taxed again. A combination of both accounts may be preferred by some people. Each type of IRA has its pros and cons. What should you look at before deciding which type is best for you? Three things to bear in mind before you decide which type of IRA is best for you:
Traditional IRA Pros
- Companies have different options when it comes to contribution options
- Employer match possible
- Can save more than $5,000 per person
- Tax-deferred Growth until Withdrawal
- You may have income restrictions
- Maximum annual contribution is $5,500 ($6,500 for married couples filing jointly).
- Minimum investment is $1,000
- After the age of 70 1/2, mandatory distributions must be taken.
- An IRA can only be opened by someone who is at least five years older than you.
- Transfer assets between IRAs is not possible
Roth IRA pros:
- Contributions are tax-free
- Earnings grow without paying taxes
- Minimum distribution not required
- Stocks, bonds, and mutual fund investments are the only options.
- There is no maximum contribution limit
- There are no restrictions on the transfer of assets between IRAs
- You must be at least 55 to open an IRA
Considering opening a new IRA, it's essential to know that not all companies offer the same IRAs. Some companies allow you to choose between a Roth IRA or a traditional IRA. Others will give you the option to combine them. It is also important to note that different types IRAs will have different requirements. Roth IRAs do not require a minimum amount of investment, while traditional IRAs are limited to a maximum investment of $1,000.
The Bottom Line
When you are choosing an IRA, it is crucial to consider whether you will pay taxes now or in the future. If you're planning to retire in the next ten-years, a traditional IRA may be the best option. If you are not able to retire within ten years, a Roth IRA may work better for you. However, it's always a good idea for you to talk with a professional regarding your retirement plans. Someone who understands the market will be able to recommend the best options.
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