JPMorgan's Crypto Market Outlook, Coinbase's Downgrade
Global investment bank JPMorgan has downgraded Coinbase Global (Nasdaq: COIN) from Neutral to Underweight, citing challenges ahead for the crypto market. With crypto prices already under pressure, JPMorgan warns of the potential for cryptocurrency ETF enthusiasm to deflate further, leading to lower crypto prices and trading volume.
Reasons for Downgrade
JPMorgan analyst Kenneth Worthington explained in a note that while Coinbase remains the dominant U.S. exchange in the crypto ecosystem and a global leader in cryptocurrency trading and investing, the introduction of bitcoin ETFs has not met market expectations. Worthington stated, "We think much of the crypto-industry set a high bar for the ETF launches, and, while meaningful, we think expectations are simply too high and unrealistic."
Worthington also emphasized the impact of declining crypto market cap following the approval of spot bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) on January 10. He stated, "We see greater potential for cryptocurrency ETF enthusiasm to further deflate, driving with it lower token prices, lower trading volume, and lower ancillary revenue opportunities for firms like Coinbase."
Market Performance and Price Target
As of the time of writing, Coinbase is trading at $123.43, representing a 28% decrease over the past month. JPMorgan has set a price target of $80 for Coinbase shares, suggesting a downside of 35% based on normalized earnings power.
Implications for the Crypto Market
JPMorgan's downgrade of Coinbase stock adds to concerns about the overall health of the crypto market. Last week, another JPMorgan analyst warned of an incoming bitcoin selloff, anticipating a $3 billion outflow from Grayscale, a prominent player in the crypto investment space. The conversion of Grayscale's bitcoin trust into a spot ETF, following the SEC's approval of spot bitcoin ETFs, has led to significant outflows for the company.
While newly launched spot bitcoin ETFs, such as Blackrock's Ishares Bitcoin Trust (IBIT), have seen strong inflows, the overall sentiment in the crypto market remains uncertain.
Conclusion
JPMorgan's downgrade of Coinbase stock reflects the challenges faced by the crypto market, particularly in relation to the introduction of bitcoin ETFs. With declining crypto prices and trading volume, the future of the market remains uncertain. Investors and market participants will be closely monitoring the impact of these developments on Coinbase and the broader crypto ecosystem.
What are your thoughts on JPMorgan's view on the crypto market, spot bitcoin ETFs, and Coinbase? Share your opinions in the comments section below.
Frequently Asked Questions
How much should precious metals be included in your portfolio?
To answer this question, we must first understand what precious metals are. Precious Metals are elements that have a very high relative value to other commodities. This makes them valuable in investment and trading. Today, gold is the most commonly traded precious metal.
There are however many other types, including silver, and platinum. The price of gold fluctuates, but it generally remains stable during times of economic turmoil. It is not affected by inflation or deflation.
All precious metals prices tend to rise with the overall market. However, the prices of precious metals do not always move in sync with one another. The price of gold tends to rise when the economy is not doing well, but the prices of the other precious metals tends downwards. Investors expect lower interest rates which makes bonds less appealing investments.
Contrary to this, when the economy performs well, the opposite happens. Investors are more inclined to invest in safe assets, such as Treasury Bonds, and they will not demand precious metals. These precious metals are rare and become more costly.
It is important to diversify your portfolio across precious metals in order to maximize your profit from precious metals investments. It is also a good idea to diversify your investments in precious metals, as prices tend to fluctuate.
How much of your IRA should include precious metals?
It is important to remember that precious metals can be a good investment for anyone. You don't need to be rich to make an investment in precious metals. In fact, there are many ways to make money from gold and silver investments without spending much money.
You could also consider buying physical coins like bullion bars, rounds or bullion bars. It is possible to also purchase shares in companies that make precious metals. Your retirement plan provider may offer an IRA rollingover program.
You'll still get the benefit of precious metals no matter which country you live in. They offer the potential for long-term, sustainable growth even though they aren’t stocks.
And unlike traditional investments, they tend to increase in value over time. If you decide to sell your investment, you will likely make more than with traditional investments.
What is a Precious Metal IRA?
An IRA with precious metals allows you to diversify retirement savings into gold and silver, palladium, rhodiums, iridiums, osmium, or other rare metals. These are called “precious” metals because they're very hard to find and very valuable. They are great investments for your money, and they can protect you from inflation or economic instability.
Bullion is often used for precious metals. Bullion refers to the actual physical metal itself.
Bullion can be bought through many channels, including online retailers, large coins dealers, and some grocery shops.
A precious metal IRA lets you invest in bullion direct, instead of purchasing stock. This means you'll receive dividends every year.
Precious Metal IRAs don’t require paperwork nor have annual fees. Instead, you pay a small percentage tax on the gains. Plus, you get free access to your funds whenever you want.
Can the government take your gold?
Your gold is yours and the government cannot take it. You have earned it by working hard for it. It belongs exclusively to you. However, there may be some exceptions to this rule. Your gold could be taken away if your crime was fraud against federal government. Additionally, your precious metals may be forfeited if you owe the IRS taxes. 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.
Statistics
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- 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)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (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)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
External Links
bbb.org
finance.yahoo.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 Exactly Legal – WSJ
law.cornell.edu
- 7 U.S. Code SS 7 – Designation of boards of trade as contract markets
- 26 U.S. Code SS 408 – Individual retirement accounts
How To
Investing In Gold vs. Investing In Stocks
Investing in gold as an investment vehicle might seem like a very risky proposition these days. This is because most people believe that it is no longer economically profitable to invest gold. This belief is based on the fact that gold prices are being driven down by global economic conditions. They believe they would lose their money if they invested gold. In reality, however, there are still significant benefits that you can get when investing in gold. Below we'll look at some of them.
One of the oldest currencies known to man is gold. It has been in use for thousands of year. It has been used as a store for value by people all over the globe. Even today, countries such as South Africa continue to rely heavily on it as a form of payment for their citizens.
When deciding whether to invest in gold, the first thing you need to do is to decide what price per gram you are willing to pay. When looking into buying gold bullion, you must decide how much you are willing to spend per gram. If you don't know your current market rate, you could always contact a local jeweler and ask them what they think the price is.
It's also important to note that, although gold prices are down in recent months, the costs of producing it have risen. Although gold's price has fallen, its production costs have not.
When deciding whether to buy gold, another thing to consider is how much gold you intend on buying. If you intend to only purchase enough gold to cover your wedding rings it may be a smart decision to not buy any gold. It is worth considering if you intend to use it for long-term investment. It is possible to make a profit by selling your gold at higher prices than when you purchased it.
We hope that this article has helped you gain a better understanding and appreciation for gold as an investment option. It is important to research all options before you make any decision. Only after doing so can you make an informed decision.
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By: Kevin Helms
Title: JPMorgan Downgrades Coinbase Stock Amid Challenges in Crypto Market
Sourced From: news.bitcoin.com/jpmorgan-sees-challenges-ahead-for-crypto-market-downgrades-coinbase-stock/
Published Date: Tue, 23 Jan 2024 21:00:19 +0000
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