Altcoin Dynamics Altered: Ethereum and Solana Lead Post-ETF Era
In the ever-changing world of cryptocurrency markets, recent trends have revealed interesting divergences in the altcoin market, specifically between ethereum and solana in comparison to bitcoin. Glassnode, an onchain analytics firm, has published a comprehensive report that explores this phenomenon.
The latest edition of Glassnode's "The Week Onchain," featuring Alice Kohn's research published on January 23, 2024, highlights ethereum's exceptional performance, characterized by a significant surge in derivatives market activity. It also sheds light on solana's impressive journey, particularly after the approval of a bitcoin exchange-traded fund (ETF). Ether has recently outperformed bitcoin, displaying its strongest performance since late 2022. Kohn's report reveals a surge of over 20% in ethereum's value relative to bitcoin, coinciding with a renewed interest in ethereum's derivatives market.
This resurgence, which indicates a potential shift in capital flows, has sparked speculation about the possibility of a spot-based ethereum ETF in the future. However, despite these gains, ethereum still lags behind the broader altcoin market in terms of momentum, underperforming by 17%. On the other hand, solana has taken a different path, as detailed in Glassnode's report. Despite setbacks associated with its association with FTX, SOL has delivered exceptional price performance last year.
During this period, SOL has significantly outperformed ETH, with the SOL/BTC ratio increasing by 290% since October 2023. Interestingly, unlike ETH, solana's price did not experience a significant revaluation following the approval of BTC ETFs. Glassnode's Kohn suggests that this indicates a divergent market response to broader sector movements. As a whole, the broader altcoin market has witnessed a nearly 69% increase in market cap since the filing of the Blackrock Bitcoin ETF.
On January 14, 2024, Bitcoin.com News highlighted the Altcoin Season Index from blockchaincenter.net, indicating the beginning of altseason. The index continues to declare that it is currently "altcoin season," with the leading 50 coins outperforming BTC in the previous 90 days. Kohn emphasizes in her research that this trend is primarily driven by tokens related to ethereum scaling solutions such as Optimism, Arbitrum, and Polygon. Staking and Gamefi tokens have also outperformed BTC in the early stages of 2023, pointing to a diverse appetite for risk across different altcoin sectors.
Kohn's research emphasizes the significance of these developments: "The approval of the new bitcoin ETFs has become a classic sell-the-news event, leading to a tumultuous few weeks in the market." Glassnode suggests that ethereum has emerged as the short-term winner, with investors recording multi-year highs in net realized profits. This indicates a growing willingness to engage in speculative activities, particularly regarding an ETH ETF and capital rotation.
What are your thoughts on Glassnode's report about the altered dynamics of altcoins in the crypto market? Share your opinions in the comments section below.
Frequently Asked Questions
How does gold perform as an investment?
The supply and the demand for gold determine how much gold is worth. Interest rates are also a factor.
Due to the limited supply of gold, prices for gold are highly volatile. Physical gold is not always in stock.
What are some of the benefits of a gold IRA
The best way to invest money for retirement is by putting it into an Individual Retirement Account (IRA). It is tax-deferred until it's withdrawn. You can decide how much money you withdraw each year. There are many types to choose from when it comes to IRAs. Some are better suited for college students. Others are made for investors seeking higher returns. Roth IRAs, for example, allow people to contribute after they turn 59 1/2. They also pay taxes on any earnings when they retire. The earnings earned after they withdraw the funds aren't subject to any tax. So if you're planning to retire early, this type of account may make sense.
Because you can invest money in many asset classes, a gold IRA works similarly to other IRAs. Unlike a regular IRA you don't need to worry about taxes while you wait for your gains to be available. For people who would rather invest than spend their money, gold IRA accounts are a good option.
Another advantage to owning gold via an IRA is the ease of automatic withdraws. That means you won't have to think about making deposits every month. To make sure you don't miss any payments, you can also set up direct deductions.
Finally, gold is one the most secure investment options available. It is not tied to any country so its value tends stay steady. Even in times of economic turmoil gold prices tend to remain stable. Therefore, gold is often considered a good investment to protect your savings against inflation.
How Do You Make a Withdrawal from a Precious Metal IRA?
You first need to decide if you want to withdraw money from an IRA account. Next, ensure you have enough cash on hand to pay any penalties or fees that could be associated with withdrawing funds.
Consider opening a taxable brokerage instead of an IRA if it is possible to pay a penalty if your withdrawal is made before the deadline. If you decide to go with this option, you will need to take into account the taxes due on the amount you withdraw.
Next, figure out how much money will be taken out of your IRA. This calculation is affected by many factors, such as the age at which you withdraw the money, the amount of time the account has been owned, and whether your plans to continue contributing to your retirement fund.
Once you have determined the percentage of your total savings that you would like to convert to cash, you can then decide which type of IRA to use. Traditional IRAs let you withdraw money tax-free after you turn 59 1/2, while Roth IRAs require you to pay income taxes upfront but allow you access the earnings later without paying any additional taxes.
Once the calculations have been completed, it's time to open a brokerage accounts. Brokers often offer promotional offers and signup bonuses to encourage people into opening accounts. To avoid unnecessary fees, however, try opening an account using a debit card rather than a credit card.
When it's time to make withdrawals from your precious-metal IRA, you'll need a place to keep your coins safe. Some storage facilities will accept bullion bars, others require you to buy individual coins. Either way, you'll need to weigh the pros and cons of each before choosing one.
Because you don't have to store individual coins, bullion bars take up less space than other items. But, each coin must be counted separately. However, keeping individual coins in a separate place allows you to easily track their values.
Some people prefer to keep their coins in a vault. Others prefer to store them in a safe deposit box. Regardless of the method you prefer, ensure that your bullion is safe so that you can continue to enjoy its benefits for many years.
Can the government seize your gold?
The government cannot take your gold because you own it. It is yours because you worked hard for it. It belongs to you. This rule may not apply to all cases. For example, if you were convicted of a crime involving fraud against the federal government, you can lose your gold. You can also lose precious metals if you owe taxes. However, even if you don't pay your taxes, your gold can be kept as property of the United States Government.
What are the benefits of a gold IRA
Many benefits come with a gold IRA. It is an investment vehicle that can diversify your portfolio. You decide how much money is put in each account and when it is withdrawn.
Another option is to rollover funds from another retirement account into a IRA with gold. If you are planning to retire early, this makes it easy to transition.
The best part about gold IRAs? You don't have to be an expert. They're readily available at almost all banks and brokerage firms. Withdrawals can be made instantly without the need to pay fees or penalties.
There are also drawbacks. Gold has always been volatile. Understanding why you want to invest in gold is essential. Is it for growth or safety? Are you trying to find safety or growth? Only once you know, that will you be able to make an informed decision.
You might want to buy more gold if you intend to keep your gold IRA for a long time. One ounce won't be enough to meet all your needs. You may need several ounces, depending on what you intend to do with your precious gold.
A small amount is sufficient if you plan to sell your gold. Even one ounce is enough. But, those funds will not allow you to buy anything.
Can I own a gold ETF inside a Roth IRA
Although a 401k plan might not provide this option, you should still consider other options like an Individual Retirement Account (IRA).
A traditional IRA allows for contributions from both employer and employee. You can also invest in publicly traded businesses by creating an Employee Stock Ownership Plan (ESOP).
An ESOP offers tax benefits because employees can share in the company stock and any profits that it generates. The money in the ESOP can then be subject to lower tax rates than if the money were in the individual's hands.
An Individual Retirement Annuity (IRA) is also available. An IRA allows for you to make regular income payments during your life. Contributions to IRAs can be made without tax.
Statistics
- (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)
- 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)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- 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)
External Links
irs.gov
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear In 1991 – WSJ
- Are you interested in keeping gold in your IRA at-home? It's Not Exactly Legal – WSJ
forbes.com
- Gold IRA: Add Some Sparkle To Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
finance.yahoo.com
How To
Gold Roth IRA guidelines
The best way to invest for retirement is by starting early. You should start as soon as you are eligible (usually at age 50) and continue saving throughout your career. It is essential to save enough money each year in order to maintain a steady growth rate.
Also, you want to take advantage tax-free options such as a traditional 401k, SEP IRA or SIMPLE IRA. These savings vehicles allow you the freedom to contribute without having to pay tax on your earnings until they are withdrawn. These savings vehicles are great for those who don't have access or can't get employer matching funds.
It is important to save consistently over time. You will lose any potential tax advantages if you don't contribute enough.
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By: Jamie Redman
Title: Ethereum and Solana Showcase Unique Market Dynamics in Recent Altcoin Trends
Sourced From: news.bitcoin.com/report-ethereum-and-solana-showcase-unique-market-dynamics-in-recent-altcoin-trends/
Published Date: Tue, 23 Jan 2024 22:30:19 +0000
