Ethereum's Rally Post-Bitcoin ETF Approvals
A recent analysis conducted by Kaiko Research suggests that the approval of a spot-based ethereum exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC) could become the strongest narrative for the crypto asset. The research team at Kaiko believes that the rally witnessed in ethereum's price following the approval of bitcoin ETFs indicates that investors are optimistic about the regulator's approval of ether-based ETFs.
Bitcoin's Performance Pre-ETF Approval
According to Kaiko's analysis, bitcoin's return of 100% in the 365 days prior to the ETF approval outpaced ethereum's 60% return. In the weeks leading up to the ETF approvals, bitcoin's price surged past $48,000, with some predicting that it could surpass $50,000 after the spot ETFs were approved.
ETH Rally and BTC Price Trend
However, since the approval of 11 spot bitcoin ETFs by the SEC, bitcoin's price has been trending downwards while ethereum's price has been rallying. Kaiko suggests that this trend may indicate that investors are anticipating ethereum to be the next in line for ETF approval.
Investors' Preference for ETH
Another metric highlighted by Kaiko Research is investors' preference for tokens related to ethereum, particularly those with higher volatility known as ETH beta. The analysis shows that interest in ETH beta has faded post-approval, while ethereum itself has performed the best among these tokens.
Spot Volumes Driving ETH Performance
According to Kaiko's derivatives data, ethereum's recent performance has been primarily driven by spot volumes rather than perpetual futures. The report notes that during the second week of January, ethereum's spot volume on centralized exchanges reached its highest level since the collapse of FTX. This period also marked the three highest spot volume days for ethereum since the beginning of 2023.
Other Catalysts for Ethereum's Next Rally
In conclusion, the Kaiko research team believes that the ETF narrative is likely to reignite interest in ethereum. However, if this narrative fails, other potential catalysts for the crypto asset's next rally could include the emergence of new layer twos (L2s) or the success of projects such as Eigenn Layer and restaking.
What are your thoughts on the potential approval of an ethereum ETF? Share your opinions in the comments section below.
Frequently Asked Questions
What are the pros & cons of a Gold IRA?
An Individual Retirement Account (IRA), unlike regular savings accounts, doesn't require you to pay tax on interest earned. This makes an IRA a great choice for people who are looking to save money but don’t want to pay any tax on the interest earned. However, there are also disadvantages to this type of investment.
If you withdraw too many funds from your IRA at once, you may lose all your accumulated assets. Also, the IRS may not allow you to make withdrawals from your IRA until you're 59 1/2 years old. You will likely have to pay a penalty fee if you withdraw funds from an IRA.
You will also need to pay fees for managing your IRA. Many banks charge between 0.5% and 2.0% per year. Others charge management fees that range from $10 to $50 per month.
If you prefer to keep your money outside a bank, you'll need to purchase insurance. A majority of insurance companies require that you possess a minimum amount gold to be eligible for a claim. Insurance that covers losses upto $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. Others let you pick your weight.
It is also up to you to decide whether you want to purchase physical gold or futures. The price of physical gold is higher than that of gold futures. Futures contracts, however, allow for greater flexibility in buying gold. You can set up futures contracts with a fixed expiration date.
It is also important to choose the type of insurance coverage that you need. The standard policy doesn’t provide theft protection or loss due fire, flood, or earthquake. It does include coverage for damage due to natural disasters. You may consider adding additional coverage if you live in an area at high risk.
Insurance is not enough. You also need to think about the cost of gold storage. Storage costs are not covered by insurance. Additionally, safekeeping is usually charged by banks at around $25-$40 per monthly.
If you decide to open a gold IRA, you must first contact a qualified custodian. A custodian maintains track of all your investments and ensures you are in compliance with federal regulations. Custodians are not allowed to sell your assets. Instead, they must retain them for as long and as you require.
After you have decided on the type of IRA that best suits you, you will need to complete paperwork detailing your goals. You must include information about what investments you would like to make (e.g. stocks, bonds and mutual funds). Also, you should specify how much each month you plan to invest.
After completing the forms, send them along with a check or a small deposit to your chosen provider. After reviewing your application, the company will send you a confirmation mail.
A financial planner is a good idea when opening a gold IRA. Financial planners are experts at investing and can help you determine which type of IRA is best for you. They can also help reduce your costs by suggesting cheaper options for purchasing insurance.
Should You Buy or Sell Gold?
In times past, gold was considered a safe haven for investors in times of economic trouble. Many people are now turning their backs on traditional investments like stocks and bonds, and instead look to precious metals like Gold.
The gold price has been in an upward trend for the past few years, but it remains relatively low compared with other commodities like silver or oil.
Experts think this could change quickly. Experts predict that gold prices will rise sharply in the wake of another global financial collapse.
They also point out that gold is becoming popular because of its perceived value and potential return.
These are some things you should consider when considering gold investing.
- The first thing to do is assess whether you actually need the money you're putting aside for retirement. It is possible to save for retirement while still investing your gold savings. However, you can still save for retirement without putting your savings into gold.
- You should also be aware of what you are getting into before you buy gold. There are many types of gold IRA accounts. Each offer varying degrees of security and flexibility.
- Remember that gold is not as safe as a bank account. If you lose your gold coins, you may never recover them.
You should do your research before buying gold. Protect your gold if you already have it.
Is it a good retirement strategy to buy gold?
Although buying gold as an investment might not sound appealing at first, when you look at the average annual gold consumption worldwide, it is worth looking into.
The best form of investing is physical bullion, which is the most widely used. There are other ways to invest gold. Research all options carefully and make an informed decision about what you desire from your investments.
If you don't want to keep your wealth safe, buying shares in companies that extract gold and mining equipment could be a better choice. If you are looking for cash flow from your investment, buying gold stocks will work well.
You can also invest your money in exchange-traded fund (ETFs), which give you exposure to the gold price by holding securities related to gold. These ETFs usually include stocks of precious metals refiners or gold miners.
Statistics
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- 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)
- 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)
External Links
bbb.org
irs.gov
cftc.gov
investopedia.com
How To
3 Ways To Invest in Gold For Retirement
It is crucial to understand how you can incorporate gold into your retirement plans. There are many ways to invest in gold if you have a 401k account at work. It is also possible to invest in gold from outside of your work environment. A custodial account can be opened by a brokerage firm like Fidelity Investments if you already have an IRA. If you don't have any precious metals yet, you might want to buy them from a reputable dealer.
These are three simple rules to help you make an investment in gold.
- Buy Gold with Your Cash – Don't use credit cards or borrow money to fund your investments. Instead, cash in your accounts. This will protect your against inflation and increase your purchasing power.
- Physical Gold Coins to Own – Physical gold coin ownership is better than having a paper certificate. The reason is that it's much easier to sell physical gold coins than certificates. You don't have to store physical gold coins.
- Diversify Your Portfolio. Never place all your eggs in the same basket. By investing in multiple assets, you can spread your wealth. This helps reduce risk and gives you more flexibility during market volatility.
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By: Terence Zimwara
Title: The Potential Approval of Ethereum ETF Could Be the Asset's Strongest Narrative
Sourced From: news.bitcoin.com/study-potential-approval-of-spot-etf-is-ethereums-strongest-narrative-right-now/
Published Date: Mon, 22 Jan 2024 13:00:59 +0000
