Peter Schiff Predicts Deeper Losses for Spot Bitcoin ETFs
Peter Schiff, a well-known gold bug and economist, has issued a warning about spot bitcoin exchange-traded funds (ETFs), stating that they are currently in bear markets. Specifically, Schiff highlighted the Proshares Bitcoin Strategy ETF, which has experienced a decline of over 50% in the span of two years. He believes that investors who have purchased the newly approved spot bitcoin ETFs will face even more significant losses.
Schiff's Outlook on Spot Bitcoin ETFs
Peter Schiff, who is known for his skepticism towards cryptocurrencies, shared his views on the recently launched spot bitcoin exchange-traded funds (ETFs) on the social media platform X. He expressed his concerns about the performance of these ETFs, which have experienced a decline in value following their approval.
Initially, the price of bitcoin soared above $47,000 in anticipation of the spot bitcoin ETF approval by the U.S. Securities and Exchange Commission (SEC). However, BTC's value took a downward turn after the approval, dropping below $40,000 on Monday and further to $39,000 on Tuesday. Schiff commented on Monday:
All the spot bitcoin ETFs are now in bear markets, defined as a drop of 20% or more from the peak.
He also noted that the Fidelity Wise Origin Bitcoin Fund (FBTC) has been hit the hardest, experiencing a decline of 32%. In a subsequent post, Schiff highlighted the Proshares Bitcoin Strategy ETF (BITO), which tracks bitcoin futures and was launched in October 2021. BITO started trading at $40.88 and has since dropped to $19, representing a decline of over 50% in just over two years. Schiff believes that investors who have purchased any of the 11 spot bitcoin ETFs will face even worse outcomes. As of now, BITO is trading at $19.04, having experienced a drop of nearly 52% since its inception.
After bitcoin's price fell below $39,000 on Tuesday, Schiff provided further insight on X, stating:
The new bitcoin ETFs aren't generating additional demand but instead are merely shifting existing demand. Investors who may have previously purchased actual bitcoin or bitcoin-related equities such as Microstrategy stock (MSTR) or Grayscale's bitcoin trust (GBTC) are now opting for the new ETFs. However, rearranging the deck chairs won't prevent the ship from sinking.
Schiff also highlighted the negative impact on Coinbase stock (COIN) resulting from the new bitcoin ETFs. Although Coinbase holds bitcoin in these ETFs, speculators who previously traded bitcoin through Coinbase are now trading the ETFs instead. Additionally, many individuals who purchased COIN as a proxy for bitcoin are now investing in the ETFs. On Monday, JPMorgan downgraded Coinbase stock from Neutral to Underweight, setting a price target of $80. Currently, COIN is trading at $124.19.
Earlier this month, Schiff warned that spot bitcoin ETFs would trigger a selloff among speculators and would not attract significant institutional demand. He also predicted that Gary Gensler, the chairman of the U.S. Securities and Exchange Commission (SEC), would introduce stringent cryptocurrency regulations that would negatively impact bitcoin's price.
What are your thoughts on Peter Schiff's warning about spot bitcoin ETFs? Share your opinions in the comments section below.
Frequently Asked Questions
Can the government take your gold?
The government cannot take your gold because you own it. It's yours, and you earned it by working hard. It belongs exclusively to you. But, this rule is not universal. Your gold could be taken away if your crime was fraud against federal government. Your precious metals can also be lost if you owe tax to the IRS. However, if you do not pay your taxes, you can still keep your gold even though it is considered property of the United States Government.
How is gold taxed within a Roth IRA
The tax on an investment account is based on its current value, not what you originally paid. If you invest $1,000 into a mutual fund, stock, or other investment account, then any gains are subjected tax.
But if you put the money into a traditional IRA or 401(k), there's no tax when you withdraw the money. You pay taxes only on earnings from dividends and capital gains — which apply only to investments held longer than one year.
The rules governing these accounts vary by state. Maryland is an example of this. You must withdraw your funds within 60 calendar days of turning 59 1/2. Massachusetts allows you up to April 1st. New York allows you to wait until age 70 1/2. To avoid penalty fees, it is important to plan and take distributions in time to pay all your retirement savings.
How Much of Your IRA Should Be Made Up Of Precious Metals
It's important to understand that precious metals aren't only for wealthy people. You don't need to be rich to make an investment in precious metals. In fact, there are many ways to make money from gold and silver investments without spending much money.
You might consider purchasing physical coins, such as bullion bars and rounds. Shares in precious metals-producing companies could be an option. You may also be interested in an IRA transfer program offered by your retirement provider.
You can still get benefits from precious metals regardless of what choice you make. 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. You'll probably make more money if your investment is sold down the line than traditional investments.
What is a Precious Metal IRA?
A precious metal IRA allows you to diversify your retirement savings into gold, silver, platinum, palladium, rhodium, iridium, osmium, and other rare metals. These rare metals are often called “precious” as they are very difficult to find and highly valuable. These metals are great investments and can help protect your financial future from economic instability and inflation.
Precious metals are often referred to as “bullion.” Bullion refers actually to the metal.
Bullion can be bought via various channels, such as online retailers, large coin dealers and grocery stores.
A precious metal IRA allows you to invest directly in bullion, rather than buying stock shares. This means you'll receive dividends every year.
Precious metal IRAs are not like regular IRAs. They don't need paperwork and don't have to be renewed annually. You pay only a small percentage of your gains tax. You can also access your funds whenever it suits you.
Should You Invest in gold for Retirement?
This will depend on how much money and whether you were able to invest in gold at the time that you started saving. If you are unsure of which option to invest in, consider both.
Gold offers potential returns and is therefore a safe investment. It is a good choice for retirees.
While most investments offer fixed rates of return, gold tends to fluctuate. Therefore, its value is subject to change over time.
However, it doesn't necessarily mean that you shouldn't invest your money in gold. It just means that you need to factor in fluctuations to your overall portfolio.
Another advantage of gold is its tangible nature. Gold is less difficult to store than stocks or bonds. It is also easily portable.
As long as you keep your gold in a secure location, you can always access it. You don't have to pay storage fees for physical gold.
Investing in gold can help protect against inflation. As gold prices rise in tandem with other commodities it can be a good hedge against rising cost.
Additionally, it will be a benefit to have some of your savings invested into something that won't lose value. When the stock market drops, gold usually rises instead.
Another benefit to investing in gold? You can always sell it. As with stocks, your position can be liquidated whenever you require cash. You don't even need to wait for your retirement.
If you do decide to invest in gold, make sure to diversify your holdings. Don't put all of your eggs in one basket.
You shouldn't buy too little at once. Start small, buying only a few ounces. Then add more as needed.
The goal is not to become rich quick. 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.
Who holds the gold in a gold IRA?
The IRS considers an individual who owns gold as holding “a form of money” subject to taxation.
This tax-free status is only available to those who have owned at least $10,000 of gold and have kept it for at minimum five years.
Owning gold can also help protect against inflation and price volatility, but it doesn't make sense to hold gold if you're not going to use it.
You will need to declare the value of gold if you intend on selling it one day. This could impact how capital gains taxes you owe for cash investments.
To find out what options you have, consult an accountant or financial planner.
Statistics
- 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)
- 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)
- You can only purchase gold bars at least 99.5% purity. (forbes.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)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
External Links
cftc.gov
law.cornell.edu
- 7 U.S. Code SS7 – Designation Boards of Trade as Contract Markets
- 26 U.S. Code SS 408 – Individual retirement plans
investopedia.com
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear In 90 – WSJ
- How do you keep your IRA Gold at Home? It's Not Exactly Lawful – WSJ
How To
Investing In Gold vs. Investing In Stocks
It might seem risky to invest in gold as an investment vehicle these days. The reason behind this is that many people believe that gold is no longer profitable to invest in. This belief stems from the fact that most people see gold prices being driven down by the global economy. They think that they would lose money if they invested in gold. However, investing in gold can still provide significant benefits. Here are some examples.
Gold is one of the oldest forms of currency known to man. It has been in use for thousands of year. People around the world have used it as a store of value. It is still used as a payment method by South Africa and other countries.
It is important to determine the price per Gram that you will pay for gold when making a decision about whether or not to invest. The first thing you should do when considering buying gold bullion is to decide how much you will spend per gram. If you don’t know the current market rate for gold bullion, you can always consult a local jeweler to get their opinion.
It is also worth noting that although gold prices have declined recently, the cost of producing gold has increased. So while the price of gold has declined, production costs haven't changed.
You should also consider the amount of your intended purchase when considering whether you should buy or not. It makes sense to save any gold you don't need to purchase if your goal is to use it for wedding rings. It is worth considering if you intend to use it for long-term investment. You can profit if you sell your gold at a higher price than you bought it.
We hope this article has given you an improved understanding of gold investment tools. We recommend you do your research before making any final decisions. Only after you have done this can you make an informed choice.
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By: Kevin Helms
Title: Peter Schiff Says All Spot Bitcoin ETFs Are Now in Bear Markets — Warns of Deeper Losses
Sourced From: news.bitcoin.com/peter-schiff-says-all-spot-bitcoin-etfs-are-now-in-bear-markets-warns-of-deeper-losses/
Published Date: Wed, 24 Jan 2024 02:00:17 +0000
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