Arthur Hayes Predicts Banks to Replace Tether and Other Stablecoin Companies
Arthur Hayes, the former CEO of Bitmex and current CIO of Malestrom, an early-stage crypto-focused investment fund, has expressed his belief that major banks will eventually take over the stablecoin industry, which is currently dominated by Tether, the company behind USDT.
During an interview on Laura Shin's Unchained podcast, Hayes explained that Tether has attained its prominent position in the crypto market due to the absence of a similar product being offered by the U.S. banking system.
Regarding Tether's business model, Hayes stated:
"The people who own Tether make something like $4 or $5 billion in free cash flow every year. It's essentially an interest rate: they take dollars, deposit them in a bank account, and then invest in treasury bills to earn the spread."
However, Hayes emphasized that centralized stablecoins are reliant on banks to clear and safeguard their funds. He criticized bank managers for providing these services to stablecoin companies while failing to offer stablecoins themselves with the same level of performance.
Hayes believes that this situation will change once the U.S. Treasury grants permission for traditional banks to issue stablecoins, thereby eliminating doubts about their legitimacy and backing.
According to Hayes, banks like JPMorgan will replace Tether and other stablecoin companies and engage in the same interest-earning activities. He concluded, "Ultimately, they don't have a defensible business model because they depend on banks to safeguard their funds and enable them to trade inactive instruments."
As of the end of 2023, Tether has a market capitalization of $91.5 billion and $4 billion in excess reserves, with investments in various expansion initiatives, as confirmed by CEO Paolo Ardoino.
What are your thoughts on Arthur Hayes' perspective regarding the future of Tether and centralized stablecoins? Share your opinions in the comments section below.
Frequently Asked Questions
How is gold taxed within a Roth IRA
A tax assessment for an investment account will be based on the current market value, and not what you paid initially. All gains, even if you have invested $1,000 in a mutual funds stock, are subject to tax.
The money can be withdrawn tax-free if it's deposited in a traditional IRA (or 401(k)). Only earnings from capital gains and dividends are subject to tax. These taxes do not apply to investments that have been held for more than one year.
These rules vary from one state to another. Maryland requires that you withdraw funds within 60 business days after reaching the age of 59 1/2. In Massachusetts, you can wait until April 1st. New York is open until 70 1/2. To avoid penalties, you should plan ahead and take distributions as soon as possible.
Are gold investments a good idea for an IRA?
Anyone who is looking to save money can make gold an excellent investment. You can diversify your portfolio with gold. But gold has more to it than meets the eyes.
It has been used throughout history as currency and it is still a very popular method of payment. It's sometimes called “the world's oldest money”.
But unlike paper currencies, which governments create, gold is mined out of the earth. It's hard to find and very rare, making it extremely valuable.
The supply and demand for gold determine the price of gold. 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 other hand, people will save cash when the economy slows and not spend it. This results in more gold being produced, which drives down its value.
It is this reason that gold investing makes sense for businesses and individuals. If you make an investment in gold, you can reap the economic benefits whenever the economy is growing.
You'll also earn interest on your investments, which helps you grow your wealth. You won't lose your money if gold prices drop.
How does a gold IRA work?
For people who are looking to invest in precious materials, Gold Ira account accounts provide tax-free investments.
You can purchase physical bullion gold coins at any point in time. To start investing in gold, it doesn't matter if you are retired.
An IRA allows you to keep your gold forever. Your gold holdings won't be subject to taxes when you pass away.
Your heirs inherit your gold without paying capital gains taxes. Your gold is not part of your estate and you don't have to include it in the final estate report.
To open a Gold IRA, you'll need to first set up an Individual Retirement Account (IRA). Once you've done that, you'll receive an IRA custody. This company acts as a middleman between you and the IRS.
Your gold IRA custodian is responsible for handling all paperwork and submitting the required forms to the IRS. This includes filing annual reports.
After you have created your gold IRA, the only thing you need to do is purchase gold bullion. The minimum deposit is $1,000. A higher interest rate will be offered if you invest more.
Taxes will apply to gold that you take out of an IRA. If you take out the whole amount, you'll be subject to income taxes as well as a 10 percent penalty.
However, if you only take out a small percentage, you may not have to pay taxes. However, there are exceptions. You'll owe federal income tax and a 20% penalty if you take out more than 30% of your total IRA assets.
It is best to not take out more than 50% annually of your total IRA assets. If you do, you could face severe financial consequences.
How much gold should your portfolio contain?
The amount of capital required will affect the amount you make. You can start small by investing $5k-10k. As you grow, it is possible to rent desks or office space. This will allow you to pay rent monthly, and not worry about it all at once. Only one month's rent is required.
Consider what type of business your company will be running. In my case, I am running a website creation company, so we charge clients around $1000-2000/month depending on what they order. Consider how much you expect to make from each client, if you decide to do this kinda thing.
Freelance work is not likely to pay a monthly salary. The project pays freelancers. Therefore, you might only get paid one time every six months.
You must first decide what kind and amount of income you are looking to generate before you can calculate how much gold will be needed.
I recommend starting with $1k-$2k in gold and working my way up.
Statistics
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (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)
- 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)
- 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)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
External Links
finance.yahoo.com
investopedia.com
- Are You a Good Candidate for a Gold IRA
- What are the Options Types, Spreads, Example, and Risk Metrics
irs.gov
cftc.gov
How To
Guidelines for Gold Roth IRA
You should start investing early to ensure you have enough money for retirement. As soon as you become eligible, which is usually around age 50, start saving and keep it up throughout your career. It's vital to contribute enough money each year to ensure adequate growth on an ongoing basis.
You can also take advantage of tax-free savings opportunities like a traditional 401k (k), SEP IRA (or SIMPLE IRA). These savings vehicles enable you to make contributions while not paying any taxes on the earnings, until they are withdrawn. This makes them a great choice for people who don’t have access employer matching funds.
It is important to save consistently over time. If you aren't contributing the maximum amount permitted, you could miss out on tax benefits.
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By: Sergio Goschenko
Title: Big Banks Will Eventually Cannibalize Tether’s Business Model, Warns Maelstrom CIO Arthur Hayes
Sourced From: news.bitcoin.com/maelstrom-cio-arthur-hayes-alerts-big-banks-will-eventually-cannibalize-tethers-business-model/
Published Date: Sun, 31 Dec 2023 22:30:23 +0000
