Bitcoin's recent price surge has captivated the market, but beneath the surface excitement lies a treasure trove of on-chain data that provides invaluable insights. By delving into metrics that track network activity, investor sentiment, and BTC market cycles, we can gain a clearer understanding of Bitcoin's current position and potential trajectory.
Plenty Of Upside Remaining
The MVRV Z-Score compares Bitcoin's market cap with its realized cap, offering a gauge of market overheating or undervaluation. Despite Bitcoin's recent all-time highs, the Z-score remains in neutral territory, indicating room for further price growth. Historical data shows that previous bull runs reached Z-scores of 7 to 10, well above the current level of around 3, suggesting significant upside potential.
Miner Profitability
The Puell Multiple evaluates miner profitability post-halving by comparing daily revenue to historical averages. Despite Bitcoin's surge, miner revenue has only increased by 30%, signaling early to middle stages of the bull market. Patterns in the data hint at the potential for explosive growth akin to previous cycles, with a reset, consolidation, and exponential price action phase on the horizon.
Measuring Market Sentiment
The Net Unrealized Profit and Loss (NUPL) metric maps sentiment across phases like optimism and euphoria. Currently in the 'Belief' zone, Bitcoin shows ample room for price appreciation before reaching market saturation. With NUPL levels lower than earlier this year, there is potential for further growth before sentiment peaks.
Long-Term Holder Trends
The percentage of Bitcoin held for over a year remains high, indicating a steadfast long-term holder base. Comparisons to previous cycles suggest that millions of BTC are yet to be transferred to new market participants, highlighting the nascent phase of the current bull run.
Tracking "Smart Money"
The Coin Days Destroyed metric tracks whale activity, revealing insights into profit realization by large BTC holders. With current levels far from market tops, smart money holders are holding off on significant profit-taking, signaling confidence in higher prices to come.
Despite the rally, on-chain metrics point to Bitcoin being far from overheated. Long-term holders remain strong, and indicators like the MVRV Z-score, NUPL, and Puell Multiple suggest room for growth. As the market transitions into the mid to late-cycle phase, data-driven decisions are key to navigating the evolving landscape of Bitcoin investing.
For further insights on this topic, you can watch a recent YouTube video: What's Happening On-chain: Bitcoin Update.
Frequently Asked Questions
What are the pros and cons of a gold IRA?
An Individual Retirement Account (IRA), unlike regular savings accounts, doesn't require you to pay tax on interest earned. An IRA is a great way to save money and not have to pay taxes on the interest you earn. There are some disadvantages to this investment.
For example, if you withdraw too much from your IRA once, you could lose all your accumulated funds. The IRS may prevent you from taking out your IRA funds until you reach 59 1/2. If you do withdraw funds from your IRA you will most likely be required to pay a penalty.
Another disadvantage is that you must pay fees to manage your IRA. Many banks charge between 0.5%-2.0% per year. Other providers charge monthly management costs ranging from $10-50.
Insurance will be required if you would like to keep your cash out of banks. Insurance companies will usually require that you have at least $500,000. You might be required to buy insurance that covers losses up to $500,000.
If you choose to go with a gold IRA, you'll need to determine how much gold you want to use. Some providers limit the amount of gold that you are allowed to own. Some providers allow you to choose your weight.
It is also up to you to decide whether you want to purchase physical gold or futures. Physical gold is more expensive than gold futures contracts. Futures contracts offer flexibility for buying gold. They allow you to set up a contract with a specific expiration date.
You also need to decide the type and level of insurance coverage you want. The standard policy does not include theft protection or loss caused by fire, flood, earthquake. The policy does not cover natural disasters. You might consider purchasing additional coverage if your area is at high risk.
Insurance is not enough. You also need to think about the cost of gold storage. Insurance won't cover storage costs. For safekeeping, banks typically charge $25-40 per month.
A qualified custodian is required to help you open a Gold IRA. Custodians keep track of your investments and ensure compliance with federal regulations. Custodians can't sell assets. They must instead keep them for as long as you ask.
Once you've chosen the best type of IRA for you, you need to fill in paperwork describing your goals. The plan should contain information about the types of investments you wish to make such as stocks, bonds or mutual funds. It is also important to specify how much money you will invest each month.
After filling in the forms, please send them to the provider. After receiving your application, the company will review it and mail you a confirmation letter.
A financial planner is a good idea when opening a gold IRA. A financial planner is an expert in investing and can help you choose the right type of IRA for you. They can help you find cheaper insurance options to lower your costs.
What is the best precious-metal to invest?
The answer to this question depends on how much risk you are willing to take and what type of return you want. Although gold has been considered a safe investment, it is not always the most lucrative. If you are looking for quick profits, gold might not be the right investment. If patience and time are your priorities, silver is the best investment.
If you don't care about getting rich quickly, gold is probably the way to go. If you are looking for a long-term investment that will provide steady returns, silver may be a better choice.
What is the tax on gold in an IRA
The fair market value of gold sold is the basis for tax. When you purchase gold, you don't have to pay any taxes. It's not considered income. If you decide to sell it later, there will be a taxable gain if its price rises.
You can use gold as collateral to secure loans. Lenders seek to get the best return when you borrow against your assets. Selling gold is usually the best option. It's not guaranteed that the lender will do it. They may keep it. They might decide that they want to resell it. The bottom line is that you could lose potential profit in any case.
So to avoid losing money, you should only lend against your gold if you plan to use it as collateral. It is better to leave it alone.
Should You Invest in gold for Retirement?
The answer depends on how much money you have saved and whether gold was an investment option available when you started saving. Consider investing in both.
Not only is it a safe investment but gold can also provide potential returns. Retirees will find it an attractive investment.
While most investments offer fixed rates of return, gold tends to fluctuate. Therefore, its value is subject to change over time.
This does not mean you shouldn’t invest in gold. It just means that you need to factor in fluctuations to your overall portfolio.
Another benefit to gold? It's a tangible asset. Gold is less difficult to store than stocks or bonds. It can also be transported.
You can always access your gold if it is stored in a secure place. There are no storage charges for holding physical gold.
Investing in gold can help protect against inflation. Because gold prices tend to rise along with other commodities, it's a good way to hedge against rising costs.
It's also a good idea to have a portion your savings invested in something which isn't losing value. Gold usually rises when the stock market falls.
You can also sell gold anytime you like by investing in it. As with stocks, your position can be liquidated whenever you require cash. You don't even have to wait until you retire.
If you do decide to invest in gold, make sure to diversify your holdings. Don't put all your eggs on one basket.
Do not buy too much at one time. Start with a few ounces. You can add more as you need.
Don't expect to be rich overnight. It is to create enough wealth that you no longer have to depend on Social Security.
Gold may not be the most attractive investment, but it could be a great complement to any retirement strategy.
How much is gold taxed under a Roth IRA
A tax assessment for an investment account will be based on the current market value, and not what you paid initially. Any gains made by you after investing $1,000 in a stock or mutual fund are subject to tax.
However, if the money is deposited into a traditional IRA/401(k), the tax on the withdrawal of the money is not applicable. Taxes are only charged on capital gains or dividends earned, which only apply to investments longer than one calendar year.
These accounts are subject to different rules depending on where you live. Maryland's rules require that withdrawals be taken within 60 days after you turn 59 1/2. Massachusetts allows you to delay withdrawals until April 1. New York offers a waiting period of up to 70 1/2 years. To avoid penalties, you should plan ahead and take distributions as soon as possible.
Is physical gold allowed in an IRA.
Not just paper money or coins, gold is money. It's an asset that people have used for thousands of years as a store of value, a way to keep wealth safe from inflation and economic uncertainty. Investors use gold today as part of their diversified portfolio, because it tends to perform better in times of financial turmoil.
Many Americans today prefer to invest in precious metals, such as silver and gold, over stocks and bonds. While owning gold doesn't guarantee you'll make money investing in gold, there are several reasons why it may make sense to consider adding gold to your retirement portfolio.
One reason is that gold historically performs better than other assets during financial panics. Gold prices rose nearly 100 percent between August 2011 and early 2013, while the S&P 500 fell 21 percent over the same period. During turbulent market conditions gold was one of few assets that outperformed stock prices.
The best thing about gold investing is the fact that there's virtually no counterparty risk. Even if your stock portfolio is down, your shares are still yours. You can still own your gold even if the company where you invested fails to pay its debt.
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. Because gold is so liquid compared to other investments, buying it in small amounts makes sense. This allows you to take advantage of short-term fluctuations in the gold market.
Statistics
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.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)
- 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)
- (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)
- 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)
External Links
cftc.gov
wsj.com
- Saddam Hussein’s InvasionHelped Uncage a Bear In 1989 – WSJ
- Want to Keep Gold in Your IRA at Home? It's not legal – WSJ
finance.yahoo.com
bbb.org
How To
Tips for Investing Gold
Investing in Gold has become a very popular investment strategy. This is because there are many benefits if you choose to invest in gold. There are several ways to invest in gold. Some people buy physical gold coins, while others prefer investing in gold ETFs (Exchange Traded Funds).
Before buying any type gold, it is important to think about these things.
- First, check to see if your country permits you to possess gold. If your country allows you to own gold, then you are allowed to proceed. If not, you may want to consider purchasing gold from overseas.
- Second, it is important to know which type of gold coin you are looking for. You can go for yellow gold, white gold, rose gold, etc.
- You should also consider the price of gold. Start small and build up. It is important to diversify your portfolio whenever you purchase gold. Diversifying your portfolio includes stocks, bonds, mutual funds, real estate, commodities, and mutual funds.
- Last but not least, remember that gold prices fluctuate frequently. Keep an eye on current trends.
—————————————————————————————————————————————————————————————-
By: Matt Crosby
Title: Insights from On-Chain Data: Bitcoin Price Bull Run Continues
Sourced From: bitcoinmagazine.com/markets/on-chain-data-shows-the-bitcoin-price-bull-run-is-far-from-over
Published Date: Fri, 22 Nov 2024 14:29:00 GMT
