Ethereum's Recent Price Surge and Factors Behind It
Veteran trader Peter Brandt recently announced on social media platform X (formerly known as Twitter) that he has taken a short position on ethereum (ETH), the second-largest cryptocurrency by market capitalization. Brandt, who has a following of 707,000 on X, also shared a technical chart to explain his strategy.
Since the beginning of 2023, ethereum's value has surged by 85% against the U.S. dollar. This significant increase can be attributed to various factors. The crypto community has been abuzz with discussions about a potential ethereum exchange-traded fund (ETF) receiving approval from the U.S. Securities and Exchange Commission (SEC), which has created a bullish sentiment in the market. Additionally, onchain analytics indicate a notable increase in ETH accumulation by major holders, suggesting a positive shift in market dynamics.
Recent Dip in ETH's Price and Peter Brandt's Analysis
However, over the past two weeks, ethereum's upward momentum has stalled, with a minor 1.4% dip in its value against the U.S. dollar. On December 18, 2023, Peter Brandt, a seasoned trader with experience since 1975, shared an ETH/USD chart from Tradingview. Brandt mentioned that while classical chart patterns do not always perform as expected, if the rising wedge in ethereum complies with the script, the target price could be $1,000, then $650.
Brandt further stated that he has already shorted ETH and has a protective break-even stop in place. Shorting involves betting against an asset, in this case, ETH, and anticipating a decline in its value to profit from the short position. Other experts, including Tuur Demeester, founder of Adamant Capital, and Colin Talks Crypto, have also expressed bearish sentiments about ethereum's performance against bitcoin (BTC).
Potential Reversal and Bearish Pattern
Although Brandt's chart indicates a potential reversal for ethereum, the pattern is not yet fully formed. Currently, there is a bearish pattern characterized by consistently flat lower highs and a series of lower lows, suggesting that sellers are more dominant than buyers. However, it is common for crypto assets to experience low trading volume during holidays, which bears may take advantage of. Therefore, it is possible that the descending triangle formation in ethereum's price might be temporary.
Peter Brandt's Views on Crypto Assets
Peter Brandt has been vocal about his opinions on crypto assets and economic matters for a long time. In the past, he has referred to the Bitcoin halving as a "non-event" and advocated for a 100 basis point increase in the benchmark interest rate by the U.S. Federal Reserve. He has also expressed the view that bitcoin is a legacy coin, while dismissing most other cryptocurrencies as "make-believe crypto wannabees."
What are your thoughts on Peter Brandt shorting ethereum? Do you agree with his analysis? Share your opinions in the comments section below.
Frequently Asked Questions
How do I Withdraw from an IRA of Precious Metals?
If you have a precious IRA company such Goldco International Inc. account, you may be tempted to withdraw your funds. When you sell your metals, the value of those funds will be higher than if it was kept in the account.
Here are the steps to help you withdraw money from your precious-metal IRA.
First, verify that your precious metal IRA allows withdrawals. Some companies allow this option, while others don't.
Second, find out if you are eligible for tax-deferred gains from selling your metals. This benefit is offered by most IRA providers. However, some don't.
Third, make sure to check with your precious metal IRA provider if there are any fees associated with these steps. Extra fees may apply for withdrawals.
Fourth, it is important to keep track of your precious-metal IRA investments for at most three years after you have sold them. In other words, wait until January 1st each year to calculate capital gains on your investment portfolio. You will then need to file Form 8949 which contains instructions on how to calculate the amount of gain that you have realized.
You must file Form 8949 and also report any sale of precious metals to IRS. This step ensures that you pay taxes on all profits earned from your sales.
Before selling precious metals, it is a good idea to consult an attorney or trusted accountant. They can assist you in following the correct procedures and avoiding costly mistakes.
How much should your IRA include precious metals
Investing in precious metals such as gold and silver is the best way to protect yourself from inflation. It's not just for retirement. It can also be used to prepare for economic downturns.
While silver and gold have seen significant increases in the last few years, they are still safe investments since they don’t fluctuate as often as stocks. There is always demand for these materials.
Gold and silver prices are usually stable and predictable. They tend to rise during economic growth and drop during recessions. This makes them excellent money-savers, and long-term investment options.
Ten percent should go into precious metals. If you want to diversify even further your portfolio, that percentage could rise.
How to Open a Precious Metal IRA?
A self-directed Roth Individual Retirement Account is the best way to open a IRA for precious metals.
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 appealing to those who want to both save money and get a tax cut.
You are not limited to investing in gold or silver. If it meets the IRS guidelines, you can invest in any asset that interests you.
People often think of silver and gold when they hear “precious metal” but there are many other precious metals.
Examples include platinum, palladium and rhodium.
You can invest in precious and base metals in many different ways. These include purchasing bullion coins and bars, as well as shares in mining companies.
Bullion Coins, Bars
Buying bullion coins and bars is one of the easiest ways to invest in precious metals. Bullion refers to physical ounces (or grams) of gold and/or silver.
Bullion bars and bullion coins are actual pieces of the metal.
While you might not feel any change when you buy bullion coin bars or coins from a retailer, you will experience some benefits over time.
This is an example of a tangible piece in history. Each coin and each bar have a story.
It is often worth less than its nominal price if you examine the face value. In 1986, the American Eagle Silver Coin was $1.00 per ounce. 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.
Mining Companies
Another option for people who are interested in buying precious metals is to invest in shares of mining corporations. When you invest in mining companies, you are investing in the company's ability to produce gold and silver.
You will then receive dividends, which are calculated based upon the company's profit. These dividends can then be used to pay out shareholders.
In addition, you will benefit from the growth potential of the company. As the demand for the product grows, the company's share price should increase.
These stocks can fluctuate in value so it is important to diversify your portfolio. This involves spreading your risk over multiple companies.
But, remember that mining companies, like all stock market investments, are susceptible to financial loss.
Your ownership stake could become worthless if the price of gold falls significantly.
The bottom line
Precious metals, such as silver and gold, can be a refuge during economic uncertainty.
Gold and silver can fluctuate in price. If you're interested in making a long-term investment in precious metals, consider opening up a precious metals IRA account with a reputable firm.
You will be able to take advantage of tax incentives while also benefiting from physical assets.
Are you able to keep precious metals in your IRA?
This depends on the IRA's owner's desire to diversify or keep his holdings in silver and gold.
He has two options if he wishes to diversify. He could either buy bars of physical gold and/or sterling from a dealer or simply sell these items back at the end. Imagine he doesn't desire to sell off his precious metals investments. In that case, he should continue holding onto them as they would be perfectly suitable for storing within an IRA account.
What type of IRA are you using to buy precious metals stocks?
Employers and financial institutions often offer Individual Retirement Accounts (IRA) as an investment vehicle. Through an IRA, you may contribute money to an account that grows tax-deferred until withdrawn.
You can save taxes and pay them later with an IRA. 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. You'll owe income tax and a 10% federal penalty if you withdraw from your IRA in retirement.
A 5% IRS penalty is applicable to withdrawals made before the age of 59 1/2. Between the ages of 591/2 and 70 1/2, withdrawals are subject to a 3.4% IRS penal.
The IRS will penalize withdrawals of more than $10,000 annually.
Statistics
- The maximum yearly contribution to an individual's IRAs is currently $6,000 ($7,000 for those 50 years or older), or 100% of earned income, whichever is less. (monex.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)
- 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)
External Links
wsj.com
en.wikipedia.org
takemetothesite.com
forbes.com
How To
Best Precious Metals Ira in 2022: Things to Remember
Precious Metals Ira, one of the most preferred investment options among investors, is one. This article will help you understand what makes this asset class so attractive and how to make wise decisions when investing in precious metals.
These assets' main appeal is their potential for long-term, sustainable growth. If we look at historical data, gold prices show incredible returns. Over the past 200-years, gold prices have gone from $20 per ounce up to $1900 per ounce. Comparatively, the S&P 500 Index has only grown by approximately 50%.
During times of economic uncertainty, people consider gold a safety net. People will sell stocks to move to safety and security in gold when the stock exchange is experiencing a downturn. Inflation is also a hedge, so gold can be used as a security measure. Many economists believe that there will always exist some level of inflation. Physical gold is a way to protect your money from future price increases.
You should be careful before you purchase precious metals such as palladium, gold, platinum or silver. You must first decide whether you wish to invest in bullion coins or bars. Bullion bars are often purchased in large quantities (like 100 grams) and stored until needed. Coins are smaller versions of bullion bars, which can then be used to buy small amounts of bullion.
Second, consider where you want to store your precious materials. Certain countries are more secure than others. For example, storing your precious metals overseas might make sense if you live in the US. If you are thinking of storing your precious metals in Switzerland, however, you might be wondering why.
Finally, decide whether you want investment in precious metals directly (or through precious metals exchange traded funds) (ETFs). ETFs, which track the performance different commodities like gold, are financial instruments. You can use these to get exposure to precious metals without having to own them.
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