An Increasing Interest in Bitcoin
The financial sector is closely monitoring the progress of several spot bitcoin (BTC) exchange-traded funds (ETFs) awaiting regulatory approval. These days, investors are increasingly convinced of the crypto asset's allure to institutional investors. Mike Novogratz of Galaxy Digital underscored this sentiment in the company's Q3 earnings call, predicting that "2024 literally is going to be a year of institutional adoption."
CME Group Takes the Lead
On November 9, 2023, BTC reached an 18-month high, with the price of bitcoin soaring to $37,978. The subsequent day, bitcoin's value has settled slightly above the $37K mark. This fluctuation aligns with heightened institutional attention, evidenced by the CME Group's bitcoin futures open interest exceeding that of Binance on Friday. Comparatively, 11 months prior, CME ranked third for bitcoin futures open interest, with Binance leading the market.
The current landscape has shifted, with CME at $4.06 billion in open interest, surpassing Binance's $3.87 billion, according to coinglass.com metrics. The open interest (OI) at CME totals 108,900 BTC, and Binance's OI is close behind at 103,690 BTC. On November 10, Bybit followed Binance with an OI of $2.75 billion, trailed by Okx at $1.83 billion, with Bitget at $1.20 billion, completing the top five ranks in OI.
Overall, the combined crypto futures OI across all trading platforms hit $34.25 billion on Friday, marking a 3.87% increase from the previous day. In light of CME Group surpassing Binance in OI, Bloomberg analyst James Seyffart commented on the development on the social media platform X (formally Twitter).
The Evolution of Bitcoin Futures
"CME Group introduced bitcoin futures on December 18, 2017, during the notable bull run when BTC approached the $20,000 mark for the first time. Prior to CME's offering, the Chicago Board Options Exchange (Cboe) was the first institutional platform to launch BTC futures. Nevertheless, Cboe ceased issuing new contracts for its cash-settled XBT bitcoin futures in 2019."
What do you think about CME Group surpassing Binance in terms of bitcoin futures open interest on Friday? Share your thoughts and opinions about this subject in the comments section below.
Frequently Asked Questions
How to open a Precious Metal IRA
An IRA to hold precious metals can be opened by opening a Roth Individual Retirement Account (IRA) that is self-directed.
This type of account is better than other types of IRAs because you don't have to pay any taxes on the interest you earn from your investments until you withdraw them.
It is attractive for people who want to save money, but need a tax break.
There are many other options than investing in gold and silver. You can put your money in almost any item that meets the IRS guidelines.
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. You can buy bullion coins or bars, or shares in mining businesses.
Bullion Coins & Bars
One of your easiest ways to get into precious metals is to purchase bullion coins. Bullion is a general term that refers to physical ounces of gold and silver.
Bullion bars and bullion coin are real pieces of metal.
While you may not immediately see any change after buying bullion coins and bars in a store, there will be some long-term benefits.
This is an example of a tangible piece in history. Every coin and every bar has a unique story.
It is often worth less than its nominal price if you examine the face value. When it was first introduced in 1986, the American Eagle Silver Coin cost only $1.00 per troy ounce. Today, however, the American eagle's price is closer to $40.00 per an ounce.
Bullion's price has risen dramatically since its inception, so many investors would rather invest in bullion coins than futures.
Another option for people who are interested in buying precious metals is to invest in shares of mining corporations. You invest in the company's ability produce gold and silver when you buy shares of mining companies.
You will be paid dividends that are based on the company’s profits. These dividends can then be used to pay out shareholders.
The company's growth potential will also be of benefit to you. 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 allows you to spread your risk among multiple companies.
It is important to keep in mind that mining companies can lose their financial investments just as stock markets investors.
If gold prices plummet significantly, ownership of your shares could be worthless.
The bottom line
Precious Metals such as gold or silver offer a safe haven in times of economic uncertainty.
Gold and silver can fluctuate in price. You might be interested in long-term investments in precious metals. Consider opening a precious metals IRA with a reputable company.
By doing this, you can reap the tax benefits and still have physical assets.
Are you able to keep precious metals in your IRA?
The answer depends on whether or not the IRA owner is looking to diversify his holdings in gold and silver, or to keep them for safekeeping.
He can choose to diversify if he so desires. He could purchase physical bars of gold or silver from a dealer and then sell these items to him at the end. He doesn't wish to sell any of his precious metal investments. In this case, he should hold onto the investments as they are perfect for storing inside an IRA account.
Are gold IRAs a good option for investment?
Purchase shares in mining companies to invest in precious metals like gold. You should buy shares in these companies to make money from investing in gold and other precious metals such as silver.
However, there are two drawbacks to owning shares directly:
The first is that you could lose money if your stock is held on for too long. Stocks that fall are less than their underlying asset (like silver) and can end up losing more money. That means you could end up losing money instead of making it.
You may also miss potential profits if the market recovers before you sell. It is possible to wait until the market recovers before selling your gold.
You can still enjoy the benefits of physical gold if your investments are separate from your finances. A gold IRA will help protect your portfolio from inflation and diversify it.
You can find out more information about gold investing on our website.
What precious metals will be allowed in an IRA account?
The most common precious metallic used in IRA accounts, is gold. You can also invest in gold bullion bars and coins.
Precious metals, which don't lose any value over time, are considered safe investments. They are also an excellent way to diversify your investment portfolio.
Precious metals are silver, palladium, and platinum. These three metals all have similar properties. Each one has its own uses.
For example, platinum is used in making jewelry. To create catalysts, palladium is used. Silver is used to producing coins.
When deciding which precious metal to choose, consider how much you expect to spend on your gold. You might be better off buying gold that costs less per ounce.
It is also important to consider whether you would like to keep your investment confidential. If you are unsure, palladium is the right choice.
Palladium is worth more than gold. However, it is also rarer. It is likely you will need to pay more.
The storage fees of gold and silver are also important factors to consider when making a decision between them. The weight of gold is what you store. So you'll pay a higher fee for storing larger amounts of gold.
Silver is best stored in volumes. So you'll pay less for storing smaller amounts of silver.
If you decide to store your precious metals in an IRA, follow all IRS rules regarding gold and silver. This includes keeping records of transactions and reporting them back to the IRS.
- Depending on your financial situation, most experts recommend you invest no more than 5% to 10% of your retirement funds in precious metals. (forbes.com)
- You can only purchase gold bars of at least 99.5% purity. (forbes.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)
How to Open a Precious Metal IRA
Precious metals remain one of the most highly-valued investment options. Because they offer higher returns than traditional investments such as stocks and bonds, they are very popular. However, precious metals investing requires careful planning and research. This is what you need to know before you open your precious metal IRA.
There are two main types to precious metal accounts. The physical precious metallic accounts and the paper gold-silver certificates (GSCs). Each type has its pros and cons. GSCs offer easy access and trade, while physical precious metals accounts provide diversification benefits. You can read more about them below.
Physical precious Metals accounts consist of bullion, bullion, and bars. Although this option can provide diversification benefits, there are some drawbacks. Precious metals can be expensive to store, buy and sell. It can also be difficult to transport their large sizes from one place to the next.
However, paper silver and gold certificates are relatively cheap. They are also easily available and can be traded online. This makes them an ideal choice for those who don’t desire to invest in precious metallics. However, they aren't as diversified as their physical counterparts. Because they are supported by government agencies such the U.S. Mint the value of these assets may decrease if inflation rates increase.
When opening a precious metallic IRA, make sure to choose the right account for you and your financial situation. 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
- It is up to you whether you intend on using the funds short-term for trading purposes.
- Which type of tax treatment would you prefer
- Which precious metal would you like to place your money in?
- How liquid do your portfolio need to be
- Your retirement age
- Where to store precious metals
- Your income level
- Current savings rate
- Your future goals
- Your net worth
- Any special circumstances that may affect your decision
- Your overall financial situation
- You choose between paper and tangible assets
- Your willingness to take risks
- Your ability and willingness to accept losses
- Your budget constraints
- Financial independence is what you want
- Your investment experience
- Your familiarity in precious metals
- Your knowledge about precious metals
- Your confidence in the economy
- Your personal preferences
Once you've determined which type of precious metal IRA best suits your needs, you can proceed to open an account with a reputable dealer. You can find these companies through referrals, word of mouth, or online research.
Once your precious metal IRA has been opened, you'll need decide how much money you wish to invest. Each precious metal IRA account requires a minimum initial deposit. 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. If you're looking to build wealth over a long period, you should probably opt for a larger initial deposit. 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. These are the most commonly used:
- Gold – Bullion bars, rounds, and coins
- Silver – Rounds, and coins
- Platinum – Coins
- Palladium – Round and bar forms
- Mercury – Bar and round forms
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