Former Bitmex CEO Arthur Hayes Raises Concerns
Arthur Hayes, the former CEO of Bitmex and a prominent cryptocurrency market analyst, recently discussed the potential implications of an upcoming spot bitcoin exchange-traded fund (ETF) on the future of bitcoin. In his thought-provoking blog post titled "Expression," Hayes contemplates a scenario in which the custody of all bitcoin is concentrated in the hands of a few financial institutions, such as Blackrock.
Threat to Bitcoin's Existence
Hayes believes that if this situation were to occur, it would pose a significant threat to the existence of bitcoin as a store of value. He argues that bitcoin is unique among all monetary assets in human history because it only exists when it is in motion. However, if there were to be no further transactions involving bitcoin, miners would struggle to cover the energy costs required to secure the network.
This would ultimately lead to the shutdown of the entire Bitcoin network, as miners would no longer receive sufficient fees once the subsidy ends around the year 2140. Hayes warns that if users prioritize bitcoin as a financial asset rather than a store of value, opting for derivatives over the cryptocurrency itself, this grim scenario could become a reality.
The Birth of a New Financial System
In the event that bitcoin faces such a fate, Hayes envisions the emergence of a new asset that would enable people to transact within a non-state-owned financial system. He suggests that the lessons learned from this potential downfall would prompt users to be more cautious and avoid entrusting their private keys to centralized entities.
Hayes concludes by raising important questions about the success of a spot bitcoin ETF and its potential impact on the future of bitcoin. He invites readers to share their thoughts in the comments section below.
Frequently Asked Questions
Is it possible to hold precious metals in an IRA
The answer to that question will depend on whether the IRA owner plans to diversify his holdings to gold and/or keep them safekeeping.
Two options are available for him if diversification is something he desires. He could purchase physical bars of gold or silver from a dealer and then sell these items to him at the end. However, suppose he isn't interested in selling back his precious metal investments. In this case, he should hold onto the investments as they are perfect for storing inside an IRA account.
What is the best way to make money with a gold IRA?
The answer is yes, but not as much as you think. It all depends on how risky you are willing to take. 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. When there is inflation, gold does well. It is important to invest in assets that increase with inflation. Stocks do this well because they rise when companies increase profits. This is also true of bonds. They pay interest each year. They are great in times of economic growth.
But what happens when there isn't any inflation? When there is no inflation, stocks and bonds will lose even more value. This is why investors should not invest all of their savings in one investment, such a bond mutual fund or stock mutual fund.
Instead, they should consider investing in a mixture of different types and funds. They could invest in stocks or bonds. They could also invest both in bonds and cash.
So they can see both sides of each coin. Inflation and deflation. They will see a return over time.
What is the best precious-metal to invest?
The investment of gold is high-returning and has high capital appreciation. It protects against inflation as well as other risks. People become more concerned about inflation and the gold price tends to go up.
Gold futures are a great idea. These contracts guarantee you will receive a certain amount of gold at a fixed price.
Gold futures are not for everyone. Some people prefer to own physical gold instead.
They can trade their precious metals with others. They can also sell it whenever they want.
Some people would rather not pay tax on their gold. To avoid paying taxes on their gold, they purchase it directly from the government.
This requires that you make multiple trips to the local post office. You will first need to convert any existing gold in coins or bars.
Then, you need to get a stamp on those coins or bars. Finally, send the coins or bars to the US Mint. The US Mint will melt the coins and bars to make new ones.
These bars and coins are stamped with the original stamps. They are therefore legal tender.
You won't need to pay taxes if gold is purchased directly from the US Mint.
So, which precious metal would you like to invest in?
Which type of IRA could be used for precious metals
A Individual Retirement Account (IRA), is an investment vehicle offered by most financial institutions and employers. A IRA is a way to make money and allow it to grow tax-deferred, until you withdraw it.
An IRA allows for you to save taxes while still paying taxes when you retire. This means that you can deposit more money into your retirement plan than have to pay taxes on it tomorrow.
An IRA is a tax-free way to make contributions and earn income until you withdraw the funds. There are penalties for early withdrawal if you do.
You can also contribute to your IRA beyond 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.
Withdrawals that are made prior to the age of 60 1/2 are subjected to a 5% IRS tax penalty. For withdrawals made between the age of 59 1/2 & 70 1/2, a 3.4% IRS penalty will apply.
There is a 6.2% penalty for withdrawals over $10,000 per calendar year.
Which type of IRA is the best?
The most important thing when choosing an IRA for you is to find one that fits within your goals and lifestyle. You must consider whether you want to maximize tax-deferred growth on your contributions, minimize taxes now and pay penalties later, or just avoid taxes altogether.
If you're saving for retirement and don't have much money invested, the Roth option could make sense. It's also worth considering if your plan is to work after the age of 59 1/2.
Traditional IRAs might be more beneficial if you are looking to retire early. You'll likely owe income taxes. But if you're going to work well past age 65, the Roth IRA might make more sense since it allows you to withdraw some or all of your earnings without paying taxes.
What is a Precious Metal IRA (IRA)?
Precious metals make a great investment in retirement accounts. They are a timeless investment that has held its value since the beginning of time. A great way to diversify and protect your portfolio is to invest in precious metals such silver, gold, and platinum.
Many countries also permit citizens to store money in foreign currencies. You can buy gold bars in Canada, and then keep them at the home. Then, you can buy gold bars in Canada and sell them for Canadian dollars when your family is home.
This is a simple way to make investments in precious metals. It's particularly helpful for people who don't reside in North America.
- 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)
- The IRS also allows American Eagle coins, even though they do not meet gold's 99.5% purity standard. (forbes.com)
- SEP-IRA”Simplified employee pension” For self-employed people like independent contractors, freelancers, and small-business ownersSame tax rules as traditional IRASEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less4. (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)
How to Open a Precious Metal IRA
Precious metals are one of the most sought-after investment vehicles today. Precious metals are a popular investment option because they provide investors with higher returns than traditional bonds and stocks. However, precious metals investing requires careful planning and research. Here are the basics to help you open your precious metal IRA account.
There are two types of precious metal accounts. They are paper gold and silver certificates (GSCs) and physical precious metals accounts. Each type has its pros and cons. GSCs can be traded and access physical precious metals accounts, which offer diversification benefits. To learn more about these options, keep reading below.
Physical precious Metals accounts consist of bullion, bullion, and bars. This option is great for diversification, but it has its drawbacks. For instance, the costs associated with buying, storing, and selling precious physical metals are quite expensive. Due to their size, it can be difficult for them to be transported from one place to another.
On the other hand, paper gold and silver certificates are relatively inexpensive. They can also be traded online and are easily accessible. These make them ideal for people who don’t want to invest directly in precious metals. But, they're not as well-diversified as physical counterparts. These assets are also supported by government agencies, such as the U.S. Mint. Inflation rates could cause their value to drop.
Make sure you choose the right account to suit your financial situation when opening a precious Metal IRA. Before you make that decision, here are some things to consider:
- Your tolerance level
- Your preferred asset allocation strategy
- How much time do you have to invest
- You can decide whether or not to use the funds for trading purposes.
- What kind of tax treatment you'd prefer
- Which precious metals would you prefer to invest in
- How liquid is your portfolio?
- Your retirement date
- Where you will store precious metals
- Your income level
- Your current savings rates
- Your future goals
- Your net worth
- Consider any special circumstances that could affect your decision
- Your financial overall situation
- Preference between paper and physical assets
- Your willingness to accept risks
- Your ability to manage losses
- Your budget constraints
- Financial independence is your goal
- Your investment experience
- Your familiarity with precious and rare metals
- Your knowledge about precious metals
- Your confidence in economy
- Your personal preferences
Once you've chosen the right type of precious Metal IRA to suit your needs, it is time to open a dealer account. These dealers can be found via referrals, word-of-mouth, and online research.
After opening your precious metal IRA you will need to decide how big you want it to be. It's important to note that each precious metal IRA account carries different minimum initial deposit amounts. Some accounts only require $100, while others may allow you up to $50,000.
As you can see, your precious metal IRA IRA investment amount is completely up to the individual. A higher initial deposit will help you build wealth over a prolonged period. If you are planning to invest small amounts each month, a lower initial investment might be better.
There are many types of investments that can be purchased, as well as precious metals you can use in your IRA. Here are some of the most common:
- Bullion bars, coins, and rounds in gold
- Silver – Rounds and coins
- Platinum – Coins
- Palladium – Bar and round forms
- Mercury – Round and Bar Forms
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