ARK Invest's CEO Cathie Wood has observed a notable change in investment preferences, with an increasing number of investors favoring bitcoin over traditional gold investments. This shift has become more pronounced following the introduction of spot bitcoin exchange-traded funds (ETFs), which offer investors a more convenient way to access the cryptocurrency.
Investors Shifting from Gold to Bitcoin
In a recent video on ARK Invest's Youtube channel, CEO Cathie Wood discussed the significant shift among investors from gold to bitcoin. She highlighted the introduction of spot bitcoin ETFs as a catalyst for this trend, as they provide a simpler and more streamlined method for investors to invest in bitcoin.
Bitcoin's Resilience and Growth
During a conversation with Brett Winton, ARK's chief futurist, Wood emphasized bitcoin's remarkable resilience and growth, particularly during times of financial instability. She recalled the instance of March 2023, when the U.S. faced a regional bank crisis. As the regional bank index plummeted, the value of bitcoin surged by 40%. Wood noted that history seems to be repeating itself, with bitcoin experiencing another surge in value as the regional bank index shows signs of instability. This highlights bitcoin's emerging role as a "flight to safety" asset.
Bitcoin's Price in Comparison to Gold
Wood presented a compelling chart that demonstrated bitcoin's price in relation to gold, revealing a strong and consistent upward trend. According to Wood, this trend indicates that bitcoin is gradually replacing gold as a preferred investment choice. She expressed her belief that this substitution will continue in the future.
Volatility Following the Launch of Spot Bitcoin ETFs
Wood addressed the volatility that followed the launch of spot bitcoin ETFs, including the ARK 21shares Bitcoin ETF on January 11. She explained that the subsequent price correction was expected. Despite a 20% drop in bitcoin's price after the launch, Wood remains optimistic. She pointed out that a significant portion of the circulating bitcoin supply, approximately 15 million out of 19.5 million, has not been moved for over 155 days, indicating strong investor confidence and a long-term holding pattern.
ARK Invest's Position in the Crypto Sector
ARK Invest's involvement in the cryptocurrency space extends beyond bitcoin. The firm has made significant investments in Coinbase stock (COIN), although it has reduced its holdings since June 2023. Currently, ARK holds 7.187 million shares in Coinbase, valued at $843 million. This demonstrates the company's continued bullish stance on the crypto sector, despite market fluctuations.
The shift from gold to bitcoin as the preferred investment choice is becoming increasingly evident. Cathie Wood, CEO of ARK Invest, believes that this trend will continue, as bitcoin offers investors a unique opportunity for growth and acts as a "flight to safety" asset during times of financial uncertainty. Share your thoughts and opinions on this topic in the comments section below.
Frequently Asked Questions
Should You Open a Precious Metal IRA?
Precious metals are not insured. This is the most important fact to know before you open an IRA account. If you lose money in your investment, nothing can be done to recover it. This includes any loss of investments from theft, fire, flood or other circumstances.
This type of loss can be avoided by investing in physical silver and gold coins. These items have been around thousands of years and are irreplaceable. You would probably get more if you sold them today than you paid when they were first created.
When opening an IRA account, make sure you choose a reputable company offering competitive rates and high-quality 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. Keep your eyes open for the future.
Is gold a good investment IRA?
Any person looking to save money is well-served by gold. You can also diversify your portfolio by investing in gold. But there is more to gold than meets the eye.
It's been used as a form of payment throughout history. It's sometimes called “the world's oldest money”.
But gold is mined from the earth, unlike paper currencies that governments create. That makes it very valuable because it's rare and hard to create.
Gold prices fluctuate based on demand and supply. The economy that is strong tends to be more affluent, which means there are less gold miners. This results in gold prices rising.
On the flipside, people may save cash rather than spend it when the economy slows. This results in more gold being produced, which drives down its value.
This is why it makes sense to invest in gold for individuals and companies. If you make an investment in gold, you can reap the economic benefits whenever the economy is growing.
Additionally, you'll earn interest on your investments which will help you grow your wealth. Additionally, you won't lose cash if the gold price falls.
What are the fees for an IRA that holds gold?
A monthly fee of $6 for an Individual Retirement Account is charged. This includes account maintenance fees and investment costs for your chosen investments.
You may have to pay additional fees if you want to diversify your portfolio. The fees you pay will vary depending on the type of IRA that you choose. Some companies offer free check accounts, but charge monthly fee for IRA accounts.
Most providers also charge an annual management fee. These fees range between 0% and 1 percent. The average rate is.25% each year. These rates can often be waived if a broker, such as TD Ameritrade, is involved.
Should You Invest in Gold for Retirement?
How much money you have saved, and whether or not gold was an option when you first started saving will determine the answer. If you're unsure about which option to choose then consider investing in both.
In addition to being a safe investment, gold also offers potential returns. This makes it a worthwhile choice for retirees.
While most investments offer fixed rates of return, gold tends to fluctuate. Therefore, its value is subject to change over time.
However, this does not mean that gold should be avoided. Instead, it just means you should factor the fluctuations into your overall portfolio.
Another benefit to gold is its tangible value. Gold is less difficult to store than stocks or bonds. It can also be transported.
You can always access your gold as long as it is kept safe. Additionally, physical gold does not require storage fees.
Investing in gold can help protect against inflation. Because gold prices tend to rise along with other commodities, it's a good way to hedge against rising costs.
Also, you'll reap the benefits of having some savings invested in something with a stable value. Gold usually rises when stocks fall.
Gold investment has another advantage: You can sell it anytime. Like stocks, you can sell your position anytime you need cash. You don't even need to wait for your retirement.
If you do decide to invest in gold, make sure to diversify your holdings. Do not put all your eggs in one basket.
Do not buy too much at one time. Start by purchasing a few ounces. Continue adding more as necessary.
Remember, the goal here isn't to get rich quickly. Instead, the goal here is to build enough wealth to not need to rely upon Social Security benefits.
And while gold might not be the best investment for everyone, it could be a great supplement to any retirement plan.
What is a Precious Metal IRA (IRA)?
A precious metal IRA lets you diversify your retirement savings to include gold, silver, palladium, rhodium, iridium, osmium, osmium, rhodium, iridium and other rare metallics. These are called “precious” metals because they're very hard to find and very valuable. These are excellent investments that will protect your wealth from inflation and economic instability.
Bullion can be bought via various channels, such as online retailers, large coin dealers and grocery stores.
A precious metal IRA allows you to invest directly in bullion, rather than buying stock shares. This will ensure that you receive annual dividends.
Precious metal IRAs have no paperwork or annual fees. Instead, you only pay a small percentage on your gains. You also have unlimited access to your funds whenever and wherever you wish.
- 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)
- (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)
- 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)
- 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)
- 7 U.S. Code SS 7 – Designation of boards of trade as contract markets
- 26 U.S. Code SS 408 – Individual retirement accounts
Online buying gold and silver is the best way to purchase it.
To buy gold, you must first understand how it works. Gold is a precious metal similar to platinum. It is rare and used as money due to its durability and resistance against corrosion. It's hard to use, so most people prefer buying jewelry made out of it to actual bars of gold.
Today, there are two types available in gold coins: one is legal tender and the other is bullion. The legal tender coins are issued for circulation in a country. They usually have denominations such as $1, $5, $10, and so on.
Bullion coins can only be used as investment currency. They increase in value due to inflation.
They are not exchangeable in any currency exchange system. One example is that if someone buys $100 worth gold, they get 100 grams with a $100 value. Every dollar spent on gold purchases, the buyer receives one gram of gold.
When looking to buy precious metals, the next thing you should be aware of is where it can be purchased. If you want to purchase gold directly from a dealer, then a few options are available. You can start by visiting your local coin shop. You can also try going through a reputable website like eBay. Finally, you can look into purchasing gold through private sellers online.
Individuals who sell gold at wholesale and retail prices are called private sellers. Private sellers typically charge 10% to 15% commission on each transaction. That means you would get back less money from a private seller than from a coin shop or eBay. This option is often a great one for investors in gold, as it gives you greater control over the item's value.
You can also invest in gold physical. While physical gold is easier than paper certificates to store, you still need to make sure it is safe. You need to make sure that your physical gold is safe by storing it in an impenetrable container like a vault or safety depositbox.
A bank or pawnshop can help you buy gold. A bank can give you a loan up to the amount you intend to invest in Gold. Small establishments that allow customers to borrow money for items they have brought are called pawnshops. Banks usually charge higher interest rates that pawn shops.
Finally, another way to buy gold is to simply ask someone else to do it! Selling gold can also be done easily. You can contact a company like GoldMoney.com to set up an account and receive payments right away.
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