Major Decrease in GBTC Holdings
Grayscale's exchange-traded fund, GBTC, has reported a significant decrease in its bitcoin holdings. Prior to Wednesday's market opening, GBTC held 605,890.87 bitcoin. However, the most recent update reveals a reduction of 13,793.09 bitcoin, valued at approximately $571 million.
This decline in reserves follows a series of withdrawals from Grayscale's assets. In just four days, a total of 24,981.22 BTC has been withdrawn from the fund, representing a removal of over $1 billion in value.
Currently, as of 2:38 p.m. Eastern Time (ET) on Thursday, GBTC holds approximately 592,097.78 BTC, with an estimated value of $24.5 billion. GBTC was previously traded over-the-counter (OTC) and enjoyed a premium before becoming a discount in February 2021.
Competition from Bitcoin ETFs
The market impact of GBTC's sales is significant, especially as other spot bitcoin ETFs are accumulating BTC reserves. Blackrock's IBIT currently holds 25,067 BTC, while the Fidelity Wise Origin Bitcoin Fund (FBTC) holds 20,507 BTC. Bitwise's BITB secures its position as the third-largest bitcoin ETF in terms of BTC reserves with 8,309 BTC.
However, the founder of Crypto Banter, Ran Neuner, believes that the GBTC outflows will continue to affect the market. Neuner states that other ETFs may struggle to absorb the GBTC's bitcoin supply. He also predicts a potential correction in the market, with a downside target of $39,600 to close the CME gap.
Predicted Impact on Bitcoin Prices
JPMorgan market strategists have projected an additional $1.5 billion in profit-taking from GBTC, which could exert further pressure on bitcoin prices. This anticipated outflow could contribute to a decrease in bitcoin prices over the coming weeks.
By 4:11 p.m. (ET) on Thursday, BTC was trading at $40,838 per unit, with a 24-hour low of $40,600. The market continues to monitor the impact of GBTC's outflows and the overall performance of bitcoin.
What are your thoughts on the recent outflows from GBTC? Share your opinions in the comments section below.
Frequently Asked Questions
Is buying gold a good retirement plan?
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.
Physical bullion is the most popular method of investing in gold. You can also invest in gold in other ways. It is best to research all options and make informed decisions based on your goals.
If you don’t need a safe place for your wealth, then buying shares of mining companies or companies that extract it might be a better alternative. Owning gold stocks should work well if you need cash flow from your investment.
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 may include stocks that are owned by gold miners or precious metals refining companies as well as commodity trading firms.
How much of your portfolio should you hold 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 by far the most common precious metal traded today.
But, there are other types of precious metals available, including platinum and silver. The price of gold tends to fluctuate but generally stays at a reasonably stable level during periods of economic turmoil. It is also relatively unaffected both by inflation and deflation.
In general, all precious metals have a tendency to go up with the market. However, the prices of precious metals do not always move in sync with one another. When the economy is in trouble, for example, gold prices tend to rise while other precious metals fall. Investors expect lower interest rates which makes bonds less appealing investments.
However, when an economy is strong, the reverse effect occurs. Investors are more inclined to invest in safe assets, such as Treasury Bonds, and they will not demand precious metals. They become less expensive and have a lower value because they are limited.
Therefore, to maximize profits from investing in precious metals, you must diversify across multiple precious metals. Furthermore, because the price of precious Metals fluctuates, it is best not to focus on just one type of precious Metals.
What are the pros & con's of a golden IRA?
An Individual Retirement Account (IRA), unlike regular savings accounts, doesn't require you to pay tax on interest earned. An IRA is a great way to save money and not have to pay taxes on the interest you earn. There are some disadvantages to this investment.
You may lose all your accumulated savings if you take too much out of your IRA. The IRS may prevent you from taking out your IRA funds until you reach 59 1/2. A penalty fee will be charged if you decide to withdraw funds.
Another problem is the cost of managing your IRA. Many banks charge between 0.5%-2.0% per year. Other providers charge monthly management charges ranging anywhere from $10 to $50.
Insurance will be required if you would like to keep your cash out of banks. Insurance companies will usually require that you have at least $500,000. Some insurers may require you to have insurance that covers losses up $500,000.
If you are considering a Gold IRA, you need to first decide how much of it you would like to use. Some providers limit how many ounces you can keep. Others allow you to pick your weight.
It is also up to you to decide whether you want to purchase physical gold or futures. Physical gold is more costly than gold futures. Futures contracts allow you to buy gold with more flexibility. They allow you to set up a contract with a specific expiration date.
It is also important to choose the type of insurance coverage that you need. Standard policies don't cover theft protection, loss due to fire, flood or earthquake. However, it does cover damage caused by natural disasters. You may consider adding additional coverage if you live in an area at high risk.
Additional to your insurance, you will need to consider how much it costs to store your gold. Insurance won't cover storage costs. In addition, most banks charge around $25-$40 per month for safekeeping.
Before you can open a gold IRA you need to contact a qualified Custodian. A custodian helps you keep track of your investments, and ensures compliance with federal regulations. Custodians can't sell assets. Instead, they must retain them for as long and as you require.
Once you've decided which type of IRA best suits your needs, you'll need to fill out paperwork specifying your goals. You should also include information about your desired investments, such as stocks or bonds, mutual funds, real estate, and mutual funds. It is also important to specify how much money you will invest each month.
After filling in the forms, please send them to the provider. The company will then review your application and mail you a letter of confirmation.
If you are thinking of opening a gold IRA for retirement, a financial professional is a great idea. A financial planner is an expert in investing and can help you choose the right type of IRA for you. They can help reduce your expenses by helping you find cheaper alternatives to buying insurance.
Statistics
- You can only purchase gold bars at least 99.5% purity. (forbes.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)
- 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)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
External Links
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear in 1990 – WSJ
- Want to Keep Gold in Your IRA at Home? It's Not Exactly Legal – WSJ
forbes.com
- Gold IRA: Add some sparkle to your retirement nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
finance.yahoo.com
irs.gov
How To
The History of Gold as an Asset
From the beginning of history, gold was a popular currency. It was universally accepted and loved for its beauty, durability, purity and divisibility. Due to its value, it was also internationally traded. Because there were no internationally recognized standards for measuring and weighing gold, the different weights of this metal could be used worldwide. One pound sterling, for example, was equivalent in England to 24 carats, and one livre tournois, in France, to 25 carats. A mark, on the other hand, was equivalent in Germany to 28 carats.
In the 1860s, the United States began to issue American coins made from 90% copper, 10% Zinc, and 0.942 Fine Gold. This resulted in a decline of foreign currency demand and an increase in the price. At this point, the United States minted large amounts of gold coins, causing the price of gold to drop. Due to the excessive amount of money flowing into the United States, they had to find a way for them to repay some of their debt. They decided to sell some excess gold to Europe in order to do this.
Many European countries began accepting gold in exchange for the dollar because they did not trust it. Many European countries began to use paper money and stopped accepting gold as payment after World War I. The value of gold has significantly increased since then. Even though the price fluctuates, gold is still one of best investments.
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By: Jamie Redman
Title: Grayscale's GBTC Experiences Significant Bitcoin Outflows Amid Bitcoin ETF Competition
Sourced From: news.bitcoin.com/grayscales-gbtc-sheds-over-13700-btc-in-24-hours-amid-rising-bitcoin-etf-competition/
Published Date: Thu, 18 Jan 2024 21:44:17 +0000
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