Cathie Wood, the CEO of Ark Investment Management, is optimistic about the potential approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC). In an interview with CNBC, Wood expressed her belief that the approval of these ETFs could have a significant impact on the price of bitcoin, attracting institutional investors to the market.
Spot Bitcoin ETFs and Institutional Interest
Wood stated that the SEC's approval of spot bitcoin ETFs would act as a green light for institutions to invest in bitcoin. She revealed that Ark Investment Management has been in discussions with several institutional investors who have shown increased interest in bitcoin since the SEC began paving the way for these ETFs.
Probability of Approval
When asked about the probability of the SEC approving her firm's spot bitcoin ETF proposal, Wood expressed confidence in its approval. She highlighted that the SEC had previously denied similar proposals but had since been actively engaged in the process, asking detailed and technical questions. Wood believes that the SEC has now received all the necessary information and expects the approval of the bitcoin ETF this week.
Market Reaction to Approval
Contrary to popular belief that the approval of spot bitcoin ETFs would trigger a "sell on the news" event, Wood suggested that this might not be the case. She believes that the market has already priced in this expectation, and the positioning of investors has already taken place. Wood emphasized that the institutional flows into bitcoin, even with a small allocation of 2.5% to 5%, would have a substantial impact on the price of bitcoin, which she considers to be a scarce asset.
Factors Driving Bitcoin Price Higher
Wood outlined several factors that she believes will continue to drive the price of bitcoin higher. Firstly, she compared bitcoin to digital gold, noting that gold is a $12 trillion asset, while bitcoin is valued at around $800 billion. Wood sees this as an indication of a potential substitution of gold with bitcoin.
Wood also highlighted the impact of institutional flows into bitcoin. With even a small allocation of 2.5% to 5% by institutions, she expects significant price appreciation. As long-term holders continue to accumulate bitcoin and with a limited supply of 21 million units, bitcoin is becoming an increasingly scarce asset.
Cathie Wood, the CEO of Ark Investment Management, believes that the approval of spot bitcoin ETFs by the SEC will have a positive impact on the price of bitcoin. She expects institutional investors to enter the market and drive the price higher, considering bitcoin as a substitute for gold and a scarce asset. Wood's long-term investment horizon aligns with her belief in the potential of bitcoin as an investment.
Frequently Asked Questions
Is gold a good investment IRA?
Gold is an excellent investment for any person who wants to save money. You can diversify your portfolio with gold. But gold has more to it than meets the eyes.
It's been used throughout history as a currency, and even today, it remains a popular form of payment. It's often referred to as “the world's oldest currency.”
But unlike paper currencies, which governments create, gold is mined out of the earth. It's hard to find and very rare, making it extremely valuable.
Gold prices fluctuate based on demand and supply. If the economy is strong, people will spend more money which means less people can mine gold. The result is that gold's value increases.
The flip side is that people tend to save money when the economy slows. This means that more gold is produced, which reduces its value.
It is this reason that gold investing makes sense for businesses and individuals. If you have gold to invest, you will reap the rewards when the economy expands.
In addition to earning interest on your investments, this will allow you to grow your wealth. In addition, you won’t lose any money if gold falls in value.
What does a gold IRA look like?
For people who are looking to invest in precious materials, Gold Ira account accounts provide tax-free investments.
You can buy physical gold bullion coins at any time. You don’t have to wait to begin investing in gold.
An IRA allows you to keep your gold forever. You won't have to pay taxes on your gold investments when you die.
Your gold is passed to your heirs without capital gains tax. Your gold is not part of your estate and you don't have to include it in the final estate report.
First, an individual retirement account will be set up to allow you to open a golden IRA. Once you've completed this step, an IRA administrator will be appointed to your account. This company acts like a middleman between the IRS and you.
Your gold IRA Custodian will manage the paperwork and submit all necessary forms to IRS. This includes filing annual reports.
After you have created your gold IRA, the only thing you need to do is purchase gold bullion. Minimum deposit required is $1,000 The minimum deposit is $1,000. However, you will receive a higher percentage of interest if your deposit is greater.
When you withdraw your gold from your IRA, you'll pay taxes on it. You'll have to pay income taxes and a 10% penalty if you withdraw the entire amount.
If you only take out a very small percentage of your income, you may not need to pay tax. However, there are exceptions. You'll owe federal income tax and a 20% penalty if you take out more than 30% of your total IRA assets.
You shouldn't take out more then 50% of your total IRA assets annually. You'll be facing severe financial consequences if you do.
What is the tax on gold in Roth IRAs?
A tax assessment for an investment account will be based on the current market value, and not what you paid initially. So if you invest $1,000 in a mutual fund or stock and then sell it later, any gains are subject to taxes.
But if you put the money into a traditional IRA or 401(k), there's no tax when you withdraw the money. Capital gains and dividends earn you no tax. This applies only to investments made for longer than one-year.
The rules governing these accounts vary by state. In Maryland, for example, withdrawals must be made within 60 days of reaching the age of 59 1/2 in order to qualify. Massachusetts allows you to delay withdrawals until April 1. New York is open until 70 1/2. To avoid penalties, you should plan ahead and take distributions as soon as possible.
How much should I contribute to my Roth IRA account?
Roth IRAs let you save tax on retirement by allowing you to deposit your own money. You can't withdraw money from these accounts before you reach the age of 59 1/2. You must adhere to certain rules if you are going to withdraw any of your contributions prior. First, your principal (the original deposit amount) cannot be touched. This means that you can't take out more money than you originally contributed. If you decide to withdraw more money than what you contributed initially, you will need to pay taxes.
The second rule states that income taxes must be paid before you can withdraw earnings. Withdrawing your earnings will result in you paying taxes. Let's suppose that you contribute $5,000 annually to your Roth IRA. Let's say you earn $10,000 each year after contributing. On the earnings, you would be responsible for $3,500 federal income taxes. The remaining $6,500 is yours. Since you're limited to taking out only what you initially contributed, that's all you could take out.
You would still owe tax on $1,500 if you took out $4,000 of your earnings. You would also lose half of your earnings because they are subject to another 50% tax (half off 40%). Even though you had $7,000 in your Roth IRA account, you only received $4,000.
There are two types if Roth IRAs: Roth and Traditional. Traditional IRAs allow for pre-tax deductions from your taxable earnings. When you retire, you can use your traditional IRA to withdraw your contribution balance plus interest. There are no restrictions on the amount you can withdraw from a Traditional IRA.
A Roth IRA doesn't allow you to deduct your contributions. But once you've retired, you can withdraw the entire contribution amount plus any accrued interest. There is no minimum withdrawal requirement, unlike traditional IRAs. You don’t have to wait for your turn 70 1/2 years before you can withdraw your contributions.
Can the government seize your gold?
Because you have it, the government can't take it. It is yours because you worked hard for it. It belongs to your. However, there may be some exceptions to this rule. If you are convicted of fraud against the federal government, your gold can be forfeit. Also, if you owe taxes to the IRS, you can lose your precious metals. 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.
Are You Ready to Invest in Gold?
The answer will depend on how many dollars you have saved so far and whether you had gold as an investment option at the time. You can invest in both options if you aren't sure which option is best for you.
Gold offers potential returns and is therefore a safe investment. It is a good choice for retirees.
Gold is more volatile than most other investments. Because of this, gold's value can fluctuate over time.
However, it doesn't necessarily mean that you shouldn't invest your money in gold. You should just factor the fluctuations into any overall portfolio.
Another benefit to gold? It's a tangible asset. Unlike stocks and bonds, gold is easier to store. It can also be transported.
You can always access gold as long your place it safe. Plus, there are no storage fees associated with 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.
Also, you'll reap the benefits of having some savings invested in something with a stable value. Gold usually rises when stocks fall.
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 need to wait for your retirement.
If you do decide to invest in gold, make sure to diversify your holdings. You shouldn't try to put all of your eggs into one basket.
You shouldn't buy too little at once. Start small, buying only a few ounces. Continue adding more as necessary.
The goal is not to become rich quick. It is to create enough wealth that you no longer have to depend on Social Security.
While gold may not be the best investment, it can be a great addition to any retirement plan.
- 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)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.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)
- (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)
- 7 U.S. Code SS7 – Designation boards of trade as contract market authorities
- 26 U.S. Code SS 408 – Individual retirement plans
- Yahoo Finance – Barrick Gold Corporation Stock Price, News & Quote – Barrick Gold Corporation (GOLD).
How to hold physical gold in an IRA
The best way to invest in Gold is by purchasing shares of companies that produce it. This method is not without risks. There's no guarantee these companies will survive. There is always the chance of them losing their money due to fluctuations of the gold price.
An alternative option would be to buy physical gold itself. You can either open an account with a bank, online bullion dealer, or buy gold directly from a seller you trust. This option is convenient because you can access your gold when it's low and doesn't require you to deal with stock brokers. It's also easier to see how much gold you've got stored. You'll get a receipt showing exactly what you paid, so you'll know if any taxes were missed. There's also less chance of theft than investing in stocks.
However, there are some disadvantages too. You won't get the bank's interest rates or investment money. You won't have the ability to diversify your holdings; you will be stuck with what you purchased. Finally, tax man may want to ask where you put your gold.
Visit BullionVault.com to find out more about gold buying in an IRA.
By: Kevin Helms
Title: Spot Bitcoin ETF Approvals Could Drive Bitcoin Price Higher, Says Ark Invest CEO
Sourced From: news.bitcoin.com/ark-invest-ceo-expects-spot-bitcoin-etfs-to-attract-substantial-institutional-flows-pushing-btc-much-higher/
Published Date: Tue, 09 Jan 2024 03:30:34 +0000