The Potential Threat to Bitcoin's Existence
Former CEO of Bitmex, Arthur Hayes, raises concerns about the impact of an upcoming spot bitcoin ETF on the future of the cryptocurrency. In his recent blog post titled "Expression," Hayes presents a hypothetical scenario where bitcoin is controlled by a few financial institutions, such as Blackrock.
According to Hayes, if this were to happen, it could spell disaster for bitcoin as a store of value. Unlike traditional financial assets, bitcoin's value relies on its ability to move between entities. However, in a scenario where bitcoin remains stagnant and transactions cease, miners would struggle to cover the energy costs required to secure the network.
This would ultimately lead to the shutdown of the entire Bitcoin network, as miners would no longer receive subsidies after 2140 when the subsidy ends. Hayes warns that if users prioritize bitcoin as a financial asset rather than a store of value, opting for derivatives over the actual cryptocurrency, this outcome becomes increasingly likely.
The Birth of a New Financial System
Should bitcoin suffer such a fate, Hayes anticipates the emergence of a new asset that would facilitate transactions within a non-state-owned financial system. This potential replacement would allow individuals to transact without relying on traditional centralized institutions.
Hayes concludes his post with a cautionary note, urging users to exercise caution and not entrust their private keys to centralized entities. He believes that lessons should be learned from past experiences to prevent a similar outcome in the future.
What are your thoughts?
We would like to hear your opinion on Hayes' concerns regarding the success of a spot bitcoin ETF and its potential impact on the future of bitcoin. Share your thoughts and insights in the comments section below.
Frequently Asked Questions
How Does Gold Perform as an Investment?
The price of gold fluctuates based on supply and demand. Interest rates can also affect the gold price.
Due to the limited supply of gold, prices for gold are highly volatile. There is also a risk in owning gold, as you must store it somewhere.
How much should precious metals make up your portfolio?
This question can only be answered if we first know what precious metals are. Precious elements are those elements which have a high price relative to other commodities. They are therefore very attractive for investment and trading. Today, gold is the most commonly 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 not affected by inflation or deflation.
In general, prices for precious metals tend increase with the overall marketplace. That said, they do not always move in lockstep with each other. For instance, gold's price will rise when the economy is weak, while precious metals prices will fall. Investors expect lower interest rate, making bonds less appealing investments.
In contrast, when the economy is strong, the opposite effect occurs. Investors want safe assets such Treasury Bonds and are less inclined to demand 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. It is also a good idea to diversify your investments in precious metals, as prices tend to fluctuate.
How do you withdraw from an IRA that holds precious metals?
First decide if your IRA account allows you to withdraw funds. After that, you need to decide if you want to withdraw funds from an IRA account. Next, make sure you have enough money in order for you pay any fees or penalties.
Consider opening a taxable brokerage instead of an IRA if it is possible to pay a penalty if your withdrawal is made before the deadline. You will also have to account for taxes due on any amount you withdraw if you choose this option.
Next, calculate how much money your IRA will allow you to withdraw. This calculation depends on several factors, including the age when you withdraw the money, how long you've owned the account, and whether you intend to continue contributing to your retirement plan.
Once you know how much of your total savings to convert to cash, it's time to choose the type of IRA that you want. While traditional IRAs are tax-free, Roth IRAs can be withdrawn at any time after you reach 59 1/2. However, Roth IRAs will charge income taxes upfront and allow you to access your earnings later without additional taxes.
Once the calculations have been completed, it's time to open a brokerage accounts. Brokers often offer promotional offers and signup bonuses to encourage people into opening accounts. However, a debit card is better than a card. This will save you unnecessary fees.
You will need a safe place to store your coins when you are ready to withdraw from your precious metal IRA. While some storage facilities accept bullion bars and others require that you purchase individual coins, others will allow you to store your coins in their own safe. You'll have to weigh the pros of each option before you make a decision.
Because you don't have to store individual coins, bullion bars take up less space than other items. But, each coin must be counted separately. However, you can easily track the value of individual coins by storing them in separate containers.
Some prefer to store their coins in a vault. Others prefer to place them in safe deposit boxes. Whatever method you choose to store your bullion, you should ensure it is safe and secure so you can enjoy its many benefits for many years.
What is the cost of gold IRA fees
Six dollars per month is the fee for an Individual Retirement Account (IRA). This fee includes account maintenance fees as well as any investment costs related to your selected investments.
If you wish to diversify your portfolio, you may need to pay additional fees. The type of IRA you choose will determine the fees. Some companies offer checking accounts for free, while others charge monthly fees for IRA account.
A majority of providers also charge annual administration fees. These fees range between 0% and 1 percent. The average rate per year is.25%. These rates are usually waived if you use a broker such as TD Ameritrade.
Should You Buy Gold?
In the past, gold was considered a haven for investors during economic turmoil. 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.
Some experts think that this could change in the near future. Experts believe that gold prices could skyrocket in the face of another global financial crisis.
They also note that gold is increasingly popular because of its perceived intrinsic value and potential return.
Here are some things to consider if you're considering investing in gold.
- First, consider whether or not you need the money you're saving for retirement. You can save money for retirement even if you don't invest in gold. However, when you retire at age 65, gold can provide additional protection.
- Second, make sure you understand what you're getting yourself into before you start buying gold.There are several different types of gold IRA accounts available. Each offers varying levels of flexibility and security.
- Last but not least, gold doesn't provide the same level security as a savings account. It is possible to lose your gold coins.
You should do your research before buying gold. Make sure to protect any gold you already own.
Do You Need to Open a Precious Metal IRA
You should be aware that precious metals cannot be covered by insurance. If you lose money in your investment, nothing can be done to recover it. This includes all investments that are lost to theft, fire, flood, or other causes.
Investing in physical gold and silver coins is the best way to protect yourself from this type of loss. These items have been around thousands of years and are irreplaceable. If you were to offer them for sale today, they would likely fetch you more than you paid when you bought them.
You should choose a reputable firm that offers competitive rates. It is also a smart idea to use a third-party trustee who will help you have access to your assets at all times.
Remember that you will not see any returns unless you are retired if you open an Account. Do not forget about the future!
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)
- (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)
- 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)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
External Links
bbb.org
investopedia.com
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear In 90 – WSJ
- You want to keep gold in your IRA at home? It's not legal – WSJ
finance.yahoo.com
How To
The best way online to buy gold or silver
Before you can buy gold, it is important to understand its workings. It is a precious metal that is very similar to platinum. It's very rare, and it is often used as money for its durability and resistance. It is difficult to use so people prefer to buy jewelry made from it to gold bars.
Today, there are two types available in gold coins: one is legal tender and the other is bullion. Legal tender coins are minted for circulation in a country and usually include denominations like $1, $5, $10, etc.
Bullion coins can only be used as investment currency. They increase in value due to inflation.
They aren’t exchangeable in any currency exchange. If a person purchases $100 worth of gold, 100 grams of the gold will be given to him/her. The $100 value is $100. Each dollar spent by the buyer is worth 1 gram.
Next, you need to find out where to buy gold. There are several options available if your goal is to purchase gold from a dealer. First, your local currency shop is a good place to start. You might also consider going through a reputable online seller like eBay. You can also look into buying gold online from private sellers.
Private sellers are individuals that offer gold at wholesale or retail prices. Private sellers will charge you a 10% to 15% commission for every transaction. A private seller will usually return less money than a coin shop and eBay. However, this option is often a great choice when investing in gold since it gives you more control over the item's price.
An alternative option to buying gold is to buy physical gold. You can store physical gold much more easily than you can with paper certificates. However, it still needs to be safe. You need to make sure that your physical gold is safe by storing it in an impenetrable container like a vault or safety depositbox.
To purchase gold by yourself, you can visit a bank and a pawnshop. A bank can give you a loan up to the amount you intend to invest in Gold. These are small businesses that let customers borrow money against the items they bring to them. Banks often charge higher interest rates then pawnshops.
Finally, another way to buy gold is to simply ask someone else to do it! Selling gold can also be done easily. Set up a simple account with GoldMoney.com and you will start receiving payments instantly.
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By: Sergio Goschenko
Title: Arthur Hayes Believes ETFs Might Cause the Demise of Bitcoin
Sourced From: news.bitcoin.com/former-bitmex-ceo-arthur-hayes-etf-success-might-destroy-bitcoin/
Published Date: Mon, 25 Dec 2023 04:30:14 +0000
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