JPMorgan's Crypto Market Outlook, Coinbase's Downgrade
Global investment bank JPMorgan has downgraded Coinbase Global (Nasdaq: COIN) from Neutral to Underweight, citing a challenging future for the crypto market. With crypto prices already under pressure, JPMorgan warns of the potential for further deflation fueled by cryptocurrency ETF enthusiasm, resulting in lower crypto prices and trading volume.
JPMorgan analyst Kenneth Worthington explains that while Coinbase remains the dominant U.S. exchange in the crypto ecosystem and a global leader in cryptocurrency trading and investing, the anticipated catalyst of bitcoin ETFs may disappoint market participants. Worthington sets a price target of $80 for Coinbase, representing a downside of 35% from its current trading price of $123.43.
Worthington acknowledges Coinbase's progress in initiatives like the derivatives platform and L2 network, Base. However, he highlights the threat posed by a declining crypto market cap since the SEC approved spot bitcoin ETFs in January. Worthington notes that the initial net inflow into these funds has been lower than expected, and the high expectations set by the crypto industry may be unrealistic.
According to the JPMorgan analyst, the cryptocurrency market is already facing pressure, and the enthusiasm for cryptocurrency ETFs may further deflate, leading to lower token prices, trading volume, and ancillary revenue opportunities for companies like Coinbase.
Last week, another JPMorgan analyst warned of an upcoming bitcoin selloff, projecting a $3 billion outflow from Grayscale. Grayscale converted its bitcoin trust (GBTC) into a spot ETF after the SEC's approval. However, this conversion has resulted in significant outflows for Grayscale. In contrast, newly launched spot bitcoin ETFs, such as Blackrock's Ishares Bitcoin Trust (IBIT), have experienced strong inflows.
What are your thoughts on JPMorgan's perspective on the crypto market, spot bitcoin ETFs, and Coinbase? Share your opinions in the comments section below.
Frequently Asked Questions
Can I have physical gold in my IRA
Not only is gold paper currency, but it's also money. Gold is an asset people have used for thousands years as a place to store value and protect their wealth from economic uncertainty and inflation. Investors use gold today as part of their diversified portfolio, because it tends to perform better in times of financial turmoil.
Today, Americans prefer precious metals like silver and gold to stocks and bonds. Although owning gold does not guarantee that you will make money investing in it, there are many reasons to consider adding gold into your retirement portfolio.
Another reason is the fact that gold historically has performed better than other assets in times of financial panic. 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 those turbulent market conditions, gold was among the few assets that outperformed stocks.
Another advantage of investing in gold is that it's one of the few assets with virtually zero counterparty risk. Your shares will still be yours even if your stock portfolio drops. You can still own your gold even if the company where you invested fails to pay its debt.
Finally, gold provides liquidity. This means you can easily sell your gold any time, unlike other investments. You can buy gold in small amounts because it is so liquid. This allows you to take advantage of short-term fluctuations in the gold market.
How to open a Precious Metal IRA
The first step in opening an Individual Retirement Account, (IRA), is to decide if it's something you want. If you do, you must open the account by completing Form 8606. To determine which type of IRA you qualify for, you will need to fill out Form 5204. This form should not be completed more than 60 days after the account is opened. After this, you are ready to start investing. You may also choose to contribute directly from your paycheck using payroll deduction.
You must complete Form 8903 if you choose a Roth IRA. Otherwise, the process will be identical to an ordinary IRA.
You'll need to meet specific requirements to qualify for a precious metals IRA. The IRS states that you must be at least 18 and have earned income. Your earnings cannot exceed $110,000 per year ($220,000 if married and filing jointly) for any single tax year. You must also contribute regularly. These rules will apply regardless of whether your contributions are made through an employer or directly out of your paychecks.
A precious metals IRA can be used to invest in palladium or platinum, gold, silver, palladium or rhodium. However, you won't be able purchase physical bullion. This means you won’t be able to trade stocks and bonds.
You can also use your precious metals IRA to invest directly in companies that deal in precious metals. Some IRA providers offer this option.
However, investing in precious metals via an IRA has two serious drawbacks. First, they aren't as liquid than stocks and bonds. It is therefore harder to sell them when required. They also don't pay dividends, like stocks and bonds. So, you'll lose money over time rather than gain it.
How Much of Your IRA Should Include Precious Metals?
When investing in precious metals, the most important thing to know is that they aren't just for wealthy people. You don't need to be rich to make an investment in precious metals. There are many ways that you can make money with gold and silver investments, even if you don't have much money.
You might consider purchasing physical coins, such as bullion bars and rounds. It is possible to also purchase shares in companies that make precious metals. Another option is to make use of the IRA rollover programs offered by your retirement plan provider.
You'll still get the benefit of precious metals no matter which country you live in. They offer the potential for long-term, sustainable growth even though they aren’t stocks.
They also tend to appreciate over time, unlike traditional investments. If you decide to sell your investment, you will likely make more than with traditional investments.
What tax is gold subject in an IRA
The tax on the sale of gold is based on its fair market value when sold. You don't pay taxes when you buy gold. It isn't considered income. If you sell it after the purchase, you will get a tax-deductible gain if you increase the price.
You can use gold as collateral to secure loans. When you borrow against your assets, lenders try to find the highest return possible. In the case of gold, this usually means selling it. However, there is no guarantee that the lender would do this. They may hold on to it. They might decide to sell it. Either way you will lose potential profit.
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.
What is a Precious Metal IRA?
A precious metal IRA lets you diversify your retirement savings to include gold, silver, palladium, rhodium, iridium, osmium, osmium, rhodium, iridium and other rare metallics. These are called “precious” metals because they're very hard to find and very valuable. These are excellent investments that will protect your wealth from inflation and economic instability.
Bullion is often used to refer to precious metals. Bullion refers simply to the physical metal.
Bullion can be bought through many channels, including online retailers, large coins dealers, and some grocery shops.
A precious metal IRA lets you invest in bullion direct, instead of purchasing stock. This ensures that you will receive dividends each and every year.
Precious metal IRAs are not like regular IRAs. They don't need paperwork and don't have to be renewed annually. Instead, you pay only a small percentage tax on your gains. Plus, you can access your funds whenever you like.
Is gold a good IRA investment?
Gold is an excellent investment for any person who wants to save money. You can also diversify your portfolio by investing in gold. But gold is not all that it seems.
It's been used as a form of payment throughout history. It is often called “the oldest currency in the world.”
Gold, unlike other paper currencies created by governments is mined directly from the earth. This makes it highly valuable as it is hard and rare to produce.
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. The value of gold rises as a consequence.
The flip side is that people tend to save money when the economy slows. This results in more gold being produced, which drives down its value.
This is why investing in gold makes sense for individuals and businesses. You'll reap the benefits of investing in gold when the economy grows.
Also, your investments will earn you interest which can help increase your wealth. Plus, you won't lose money if the value of gold drops.
Statistics
- 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)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
External Links
cftc.gov
bbb.org
finance.yahoo.com
investopedia.com
How To
3 Ways to Invest Gold for Retirement
It's essential to understand how gold fits into your retirement plan. You can invest in gold through your 401(k), if you have one at work. You might also consider investing in gold outside your workplace. A custodial account can be opened by a brokerage firm like Fidelity Investments if you already have an IRA. If precious metals aren't your thing, you may be interested in buying them from a dealer.
These are the rules for gold investing:
- Buy Gold with Cash – Avoid using credit cards or borrowing money to fund investments. Instead, put cash into your accounts. This will help you to protect yourself against inflation while also preserving your purchasing power.
- Physical Gold Coins: You should own physical gold coins, not just a certificate. It's easier to sell physical gold coins rather than certificates. There are no storage fees for physical gold coins.
- Diversify Your Portfolio – Never put all of your eggs in one basket. This is how you spread your wealth. You can invest in different assets. This reduces risk and allows you to be more flexible during market volatility.
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By: Kevin Helms
Title: JPMorgan Downgrades Coinbase Stock as Challenges Loom for Crypto Market
Sourced From: news.bitcoin.com/jpmorgan-sees-challenges-ahead-for-crypto-market-downgrades-coinbase-stock/
Published Date: Tue, 23 Jan 2024 21:00:19 +0000
