Pantera Capital's Dan Moorehead Sees a Transformative Leap in Bitcoin Accessibility
In the world of digital assets, the approval of a spot bitcoin ETF (exchange-traded fund) is seen as a significant milestone. According to Dan Moorehead, the founder and CEO of Pantera Capital, this development represents more than just another chapter in the crypto narrative. It is a transformative leap in the recognition and accessibility of bitcoin for investors. Moorehead's recent investor letter sheds light on the potential of bitcoin ETFs to reshape perceptions towards digital currencies.
Moorehead's Take on 'Buy the Rumor, Sell the News'
Moorehead's investor letter focuses on the concept of "buy the rumor, sell the news," a well-known adage on Wall Street. This saying suggests that by the time major events occur, their impact is already priced into the market, limiting further gains. However, Moorehead argues that the introduction of a spot bitcoin ETF could disrupt this pattern, providing a new investment avenue in the blockchain space.
Breaking Away from the Expected Trajectory
Historically, significant regulatory developments in the crypto sector have followed a predictable trajectory. Moorehead points out that events like the launch of CME futures and Coinbase's initial public offering (IPO) were accompanied by initial surges and subsequent sharp declines. However, he believes that the potential approval of spot bitcoin ETFs will deviate from this norm, ushering in a new era in BTC market behavior.
The Game-Changing Nature of Spot Bitcoin ETFs
Moorehead emphasizes the transformative impact of spot bitcoin ETFs, comparing it to the inclusion of commodities and emerging markets in mainstream investment portfolios. He stresses the importance of a spot bitcoin ETF for digital assets to be recognized as a legitimate asset class. In his investor letter, Moorehead asserts that once an ETF exists, not having exposure to it effectively means being short on bitcoin.
Drawing a parallel to the introduction of gold ETFs, Moorehead predicts that a spot bitcoin ETF will streamline investing in digital currencies. It is expected to bring about legitimization and increased demand, similar to the boost in gold investments following the launch of its ETF. However, there are concerns among bitcoin enthusiasts that ETFs may dampen the value of the leading cryptocurrency, echoing the impact of gold ETFs on the price of gold.
A Different Event with Far-Reaching Consequences
Moorehead firmly believes that the approval of a spot bitcoin ETF will be unlike any previous experiences in the sector. He concludes that the change in ownership of Coinbase stock did not increase access to bitcoin, but a Blackrock ETF would fundamentally change access to the cryptocurrency. This, in turn, will have a significant positive impact.
What are your thoughts on Dan Moorehead's perspective regarding the prospects of spot bitcoin ETFs? Share your opinions in the comments section below.
Frequently Asked Questions
Is physical gold allowed in an IRA.
Gold is money. Not just paper currency. People have been using gold for thousands of years to store their wealth and protect it from economic instability and inflation. Gold is a part of a diversified portfolio that investors can use to protect their wealth from financial uncertainty.
Today, Americans prefer precious metals like silver and gold to stocks and bonds. It is possible to make money by investing in gold. However, it doesn't guarantee that you'll make a lot of money.
One reason is that gold has historically performed better than other assets during periods of financial panic. The S&P 500 declined 21 percent during the same period. Gold prices increased nearly 100 per cent between August 2011 – early 2013. Gold was one asset that outperformed stocks in turbulent market conditions.
Another advantage of investing in gold is that it's one of the few assets with virtually zero counterparty risk. Even if your stock portfolio is down, your shares are still yours. However, if you have gold, your value will rise even if the company that you invested in defaults on its loans.
Finally, gold provides liquidity. You can sell your gold at any time without worrying about finding a buyer, which is a major advantage over other investments. It makes sense to buy small quantities of gold, as it is more liquid than other investments. This allows for you to benefit from the short-term fluctuations of the gold market.
Is buying gold a good retirement plan?
While buying gold as an investment may seem unattractive at first glance it becomes worth the effort when you consider how much gold is consumed worldwide each year.
The most popular form of investing in gold is through physical bullion bars. However, there are many other ways to invest in gold. You should research all options thoroughly before making a decision on which option you prefer.
If you're not looking to secure your wealth, it may be worth considering purchasing shares in mining equipment or companies that extract gold. If you are looking for cash flow from your investment, buying gold stocks will work well.
ETFs are an exchange-traded investment that allows you to gain exposure to the market for gold. You hold gold-related securities and not actual gold. These ETFs often include stocks of gold miners, precious metals refiners, and commodity trading companies.
Do you need to open a Precious Metal IRA
The most important thing you should know before opening an IRA account is that precious metals are not covered by insurance. You cannot recover any money you have invested. This includes losing all your investments due to theft, fire, flood, etc.
It is best to invest in physical gold coins and silver coins to avoid this type loss. These items are timeless and have a lifetime value. These items are worth more today than they were when first produced.
If you decide to open an IRA account, choose a reputable company that offers competitive rates and products. It is also a smart idea to use a third-party trustee who will help you have access to your assets at all times.
Do not open an account unless you're ready to retire. Do not forget about the future!
What is a Precious Metal IRA?
An IRA with precious metals allows you to diversify retirement savings into gold and silver, palladium, rhodiums, iridiums, osmium, or other rare metals. These are called “precious” metals because they're very hard to find and very valuable. These are good investments for your cash and will help you protect yourself from economic instability and inflation.
Bullion can be bought via various channels, such as online retailers, large coin dealers and grocery stores.
With a precious metal IRA, you invest in bullion directly rather than purchasing shares of stock. This means you'll receive dividends every year.
Precious metal IRAs are not like regular IRAs. They don't need paperwork and don't have to be renewed annually. You pay only a small percentage of your gains tax. Additionally, you have access to your funds at no cost whenever you need them.
Should You Buy Gold?
Gold was a safe investment option for those who were in financial turmoil. Many people are shifting away from traditional investments like bonds or stocks to instead look toward precious metals such gold.
The trend for gold prices has been upward in recent years but they still remain low relative to other commodities like silver and oil.
Some experts believe that this could change very soon. They say that gold prices could rise dramatically with another global financial crisis.
They also mention that gold is becoming more popular due to its perceived worth and potential return.
These are some important things to remember if your goal is to invest in gold.
- The first thing to do is assess whether you actually need the money you're putting aside for retirement. It is possible to save for retirement while still investing your gold savings. The added protection that gold provides when you retire is a good option.
- You should also be aware of what you are getting into before you buy gold. There are many types of gold IRA accounts. Each one offers different levels security and flexibility.
- Don't forget that gold does not offer the same safety level as a bank accounts. It is possible to lose your gold coins.
Don't buy gold unless you have done your research. Protect your gold if you already have it.
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- 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)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- (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)
- 7 U.S. Code SS7 – Designation of boards for trade as contract markets
- 26 U.S. Code SS 408 – Individual retirement account
- Gold IRA – Add Sparkle to Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
Three ways to invest in gold for retirement
It is important to understand the role of gold in your retirement plan. If you have a 401(k) account at work, there are several ways you can invest in gold. You may also want to consider investing in gold outside of your workplace. One example is opening a custodial accounts at Fidelity Investments if an IRA (Individual Retirement Account), if you already own one. You might also consider purchasing precious metals directly from a trusted dealer if they are not already yours.
These are the rules for gold investing:
- Buy Gold With Your Cash – Do not use credit cards to purchase gold. Instead, cash in your accounts. This will protect your against inflation and increase your purchasing power.
- Physical Gold Coins – Physical gold coins are better than a paper certificate. The reason for this is that physical gold coins are much more easily sold than certificates. Also, there are no storage fees associated with physical gold coins.
- Diversify Your Portfolio. Never place all your eggs in the same basket. Also, diversify your wealth and invest in different assets. This helps reduce risk and gives you more flexibility during market volatility.
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