The Evolution of Spot Bitcoin ETFs: A Transformative Leap for Investors
The recent approval of a spot bitcoin ETF (exchange-traded fund) has been hailed as a significant milestone in the world of digital assets. According to Pantera Capital's CEO, Dan Moorehead, this development represents more than just another chapter in the crypto narrative – it signifies a transformative leap in the recognition and accessibility of bitcoin for investors. In a recent investor letter, Moorehead sheds light on the potential impact of bitcoin ETFs in altering market perceptions towards digital currencies.
Dan Moorehead Challenges the "Buy the Rumor, Sell the News" Maxim
In his letter, Dan Moorehead, the founder and CEO of Pantera Capital, challenges the conventional wisdom of "buy the rumor, sell the news" when it comes to significant market events. He argues that the introduction of a spot bitcoin ETF has the potential to disrupt this pattern, offering a new investment avenue in the blockchain industry.
Historically, major regulatory developments in the crypto sector have followed a predictable trajectory, with initial surges in market prices followed by sharp declines. Moorehead, however, believes that the approval of spot bitcoin ETFs will break away from this norm and usher in a new era of market behavior for BTC.
Spot Bitcoin ETFs: Game-Changing Investment Vehicles
Moorehead emphasizes the game-changing nature of spot bitcoin ETFs, comparing their potential impact to the inclusion of commodities and emerging markets in mainstream investment portfolios. He argues that a spot bitcoin ETF is essential for digital assets to be recognized as a legitimate asset class. Moorehead states, "Once an ETF exists, if you don't have exposure, you're effectively short."
He draws a parallel to the introduction of gold ETFs, suggesting that a spot bitcoin ETF would greatly simplify investing in digital currencies and lead to increased demand and legitimization, similar to the boost in gold investments following the launch of its ETF. However, there are concerns among bitcoin enthusiasts that a spot bitcoin ETF could dampen the value of the leading cryptocurrency, much like what has been observed with gold ETFs.
Moorehead's perspective indicates his strong belief that this event will be different from previous experiences in the sector. He concludes that a Blackrock ETF for bitcoin would fundamentally change access to the cryptocurrency and have a significant positive impact.
Share Your Thoughts
What are your thoughts on Pantera Capital CEO's perspective on the prospects of a spot bitcoin ETF? Feel free to share your opinions in the comments section below.
Frequently Asked Questions
Is it possible to hold a gold ETF within a Roth IRA
You may not have this option with a 401(k), however, you might want to consider other options, like an Individual retirement account (IRA).
A traditional IRA allows for contributions from both employer and employee. Another option is to invest in publicly traded corporations with an Employee Stockownership Plan (ESOP).
An ESOP is a tax-saving tool because employees have a share of company stock as well as the profits that the business generates. The money invested in the ESOP is then taxed at lower rates than if it were held directly in the hands of the employee.
Also available is an Individual Retirement Annuity. An IRA allows you to make regular payments throughout your life and earn income in retirement. Contributions to IRAs don't have to be taxable
What are the fees associated with an IRA for gold?
Six dollars per month is the fee for an Individual Retirement Account (IRA). This includes the account maintenance fees and any investment costs associated with your chosen investments.
Diversifying your portfolio may require you to pay additional fees. The type of IRA you choose will determine the fees. Some companies offer free check accounts, but charge monthly fee for IRA accounts.
Most providers also charge annual management costs. These fees range from 0% to 1%. The average rate is.25% annually. However, these rates are typically waived if you use a broker like TD Ameritrade.
Is it a good retirement strategy to buy gold?
While buying gold as an investment may seem unattractive at first glance it becomes worth the effort when you consider how much gold is consumed worldwide each year.
Physical bullion is the most popular method of investing in gold. There are other ways to invest gold. The best thing to do is research all options thoroughly and then make an informed decision based on what you want from your investments.
If you don’t have the funds to invest in safe places, such as a safe deposit box or mining equipment companies, buying shares of these companies might be a better investment. If you need cash flow from an investment, purchasing gold stocks is a good choice.
ETFs are an exchange-traded investment that allows you to gain exposure to the market for gold. You hold gold-related securities and not actual gold. These ETFs can include stocks of precious metals refiners and gold miners.
- 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)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.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)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- Saddam Hussein’s InvasionHelped Uncage a Bear In 1989 – WSJ
- You want to keep gold in your IRA at home? It's Not Exactly Legal – WSJ
- Gold IRA – Add Sparkle to Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
The History of Gold as an Asset
From the very beginning of time, gold was a currency. It was accepted worldwide and became popular due to its durability, purity, divisibility, uniformity, scarcity, and beauty. It was also traded internationally due to its high value. There was no international standard for measuring gold at that time, so different weights and measures were used around the world. For example, one pound sterling in England equals 24 carats; one livre tournois equals 25 carats; one mark equals 28 carats; and so on.
The United States started issuing American coins in the 1860s made of 90% copper and 10% zinc. This resulted in a decline of foreign currency demand and an increase in the price. In this period, large amounts of gold coin were minted by the United States, which caused the gold price to drop. Due to the excessive amount of money flowing into the United States, they had to find a way for them to repay some of their debt. They decided to sell some excess gold to Europe in order to do this.
Many European countries began accepting gold in exchange for the dollar because they did not trust it. Many European countries began to use paper money and stopped accepting gold as payment after World War I. The gold price has gone up significantly in the years since. Even though the price of gold fluctuates, it remains one the best investments you can make.
By: Jamie Redman
Title: Pantera CEO Predicts Spot Bitcoin ETF Will Disrupt Market Cycle
Sourced From: news.bitcoin.com/pantera-ceo-foresees-spot-bitcoin-etf-breaking-buy-the-rumor-sell-the-news-cycle/
Published Date: Tue, 21 Nov 2023 14:30:06 +0000