The demand for US spot Bitcoin ETFs surged significantly on Tuesday, surpassing the new supply created daily by miners by a remarkable 614%, according to Gayatri Choudry, Quantitative Research Analyst at Bitwise Asset Management.
Increasing Interest from Institutional and Retail Investors
The surge in demand for Bitcoin ETFs reflects growing interest among institutional and retail investors in gaining exposure to the digital asset without the need to manage BTC themselves. ETFs provide a convenient and regulated way for investors to participate in the potential upside of Bitcoin's price movements while mitigating some of the risks associated with direct ownership and custody.
Impact of the Impending Bitcoin Halving
The Bitcoin halving, set to occur in less than a month, will reduce the block reward from 6.25 BTC to 3.125 BTC. This event is significant as it cuts the rate at which new bitcoin is generated in half, making BTC more scarce over time. With the rising demand for Bitcoin ETFs surpassing new supply, the available bitcoin in the market is becoming increasingly scarce.
Catalysts for Bitcoin's Price Surge
The combination of increasing demand for Bitcoin ETFs and the impending Bitcoin halving has been the driving force behind the surge in Bitcoin's price this year. BTC is currently up over 55% year-to-date. Since BlackRock filed its spot Bitcoin ETF application with the US Securities and Exchange Commission, BTC has surged over 173%.
Anticipation Around the Upcoming Halving
Market participants are eagerly anticipating how Bitcoin will respond to the upcoming halving. This market cycle marks the first time in Bitcoin's history that its price reached a new all-time high before the halving. Previously, it would take several months for a 'supply shock' to trigger a rise in Bitcoin's price post-halving. However, with the relentless growth in demand from spot Bitcoin ETFs, Bitcoin has already experienced a significant supply shock, and the new daily supply of BTC is about to be halved.
Frequently Asked Questions
What are the benefits to having a gold IRA
It is best to put your retirement money in an Individual Retirement Account (IRA). It's tax-deferred until you withdraw it. You control how much you take each year. There are many types available. Some are better suited for people who want to save for college expenses. Others are designed for investors looking for higher returns. Roth IRAs let individuals contribute after age 591/2 and pay tax on any earnings at retirement. But once they start withdrawing funds, those earnings aren't taxed again. This type of account might be a good choice if your goal is to retire early.
The gold IRA allows you to invest in different asset classes, which is similar to other IRAs. Unlike a regular IRA you don't need to worry about taxes while you wait for your gains to be available. This makes gold IRA accounts a great choice for those who want their money to be invested, not spent.
An additional benefit to owning gold through an IRA, is the ease of automatic withdrawals. It means that you don’t have to remember to make deposits every month. To make sure you don't miss any payments, you can also set up direct deductions.
Finally, gold is one of the safest investment choices available today. Because it isn’t tied to any specific country, gold’s value tends to stay stable. Even during economic turmoil, gold prices tend to stay relatively stable. Gold is a good option for protecting your savings from inflation.
Can I buy or sell gold from my self-directed IRA
Although you can buy gold using your self-directed IRA account, you will need to open an account at a brokerage like TD Ameritrade. You can also transfer funds from an existing retirement fund.
The IRS allows individuals to contribute as high as $5,500 ($6,500 if they are married and jointly) to a traditional IRA. Individuals are allowed to contribute $1,000 each ($2,000 if married or filing jointly) to a Roth IRA.
You might want to purchase physical bullion, rather than futures contracts if you are going to invest in gold. Futures contracts are financial instruments based on the price of gold. These financial instruments allow you to speculate about future prices without actually owning the metal. But, physical bullion is real bars of gold or silver that you can hold in one's hand.
What are the fees for an IRA that holds gold?
Six dollars per month is the fee for an Individual Retirement Account (IRA). This includes account maintenance and any investment costs.
To diversify your portfolio you might need to pay additional charges. These fees can vary depending on which type of IRA account you choose. Some companies offer free checking accounts, but charge monthly fees to open IRA accounts.
A majority of providers also charge annual administration fees. These fees can range from 0% up to 1%. The average rate per year is.25%. These rates can often be waived if a broker, such as TD Ameritrade, is involved.
What is a Precious Metal IRA, and how can you get one?
An IRA with precious metals allows you to diversify retirement savings into gold and silver, palladium, rhodiums, iridiums, osmium, or other rare metals. These metals are known as “precious” because they are rare and extremely valuable. They are great investments for your money, and they can protect you from inflation or economic instability.
Precious metals often refer to themselves as “bullion.” Bullion is the physical metal.
You can buy bullion through various channels, including online retailers, large coin dealers, and some grocery stores.
With a precious metal IRA, you invest in bullion directly rather than purchasing shares of stock. This allows you to receive dividends every year.
Unlike regular IRAs, precious metal IRAs don't require paperwork or annual fees. Instead, your gains are subject to a small tax. You can also access your funds whenever it suits you.
What proportion of your portfolio should you have in precious metals
To answer this question we need to first define precious metals. Precious Metals are elements that have a very high relative value to other commodities. This makes them extremely valuable for trading and investing. Gold is currently the most widely traded precious metal.
There are however many other types, including silver, and platinum. The price for gold is subject to fluctuations, but stays relatively stable in times of economic turmoil. It is also unaffected significantly by inflation and Deflation.
All precious metals prices tend to rise with the overall market. However, they may not always move in synchrony with each other. For instance, gold's price will rise when the economy is weak, while precious metals prices will fall. This is because investors expect lower interest rates, making bonds less attractive investments.
When the economy is healthy, however, the opposite effect occurs. Investors choose safe assets such Treasury Bonds over precious metals. They are more rare, so they become more expensive and less valuable.
To maximize your profits when investing in precious metals, diversify across different precious metals. Furthermore, because the price of precious Metals fluctuates, it is best not to focus on just one type of precious Metals.
Statistics
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- 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)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- 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)
- 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)
External Links
forbes.com
- Gold IRA: Add Some Sparkle To Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
investopedia.com
bbb.org
irs.gov
How To
Three ways to invest in gold for retirement
It is crucial to understand how you can incorporate gold into your retirement plans. You have many options for investing in gold if there is a 401K account at your workplace. You may also want to consider investing in gold outside of your workplace. You could, for example, open a custodial bank account at Fidelity Investments if your IRA (Individual Retirement Account) is open. You may also want to purchase precious metals from a reputable dealer if you don’t already have them.
These are the three rules to follow if you decide to invest in gold.
- Buy Gold with Your Money – You don't need credit cards, or to borrow money to finance your investments. Instead, put cash into your accounts. This will help to keep your purchasing power high and protect you against inflation.
- Physical Gold Coins – Physical gold coins are better than a paper certificate. Physical gold coins are easier to sell than certificates. Physical gold coins are also free from storage fees.
- Diversify Your Portfolio – Never put all of your eggs in one basket. By investing in multiple assets, you can spread your wealth. This will reduce your risk and give you more flexibility in times of market volatility.
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By: Nik Hoffman
Title: The Surge in Demand for US Spot Bitcoin ETFs Signals a Shift in Market Dynamics
Sourced From: bitcoinmagazine.com/markets/bitcoin-etf-demand-surges-outpacing-supply-by-600
Published Date: Wed, 27 Mar 2024 18:49:09 GMT
