Introduction
For many advocates, the approval of a spot bitcoin ETF (exchange-traded fund) represents a significant milestone in the advancement of digital assets. Pantera Capital's CEO, Dan Morehead, believes that this development is not just another chapter in the crypto narrative but a transformative leap towards recognizing and making bitcoin more accessible for investors. In his recent investor letter, Morehead sheds light on the potential of bitcoin ETFs to change perceptions towards digital currencies.
Buy the Rumor, Buy the News
Dan Morehead, the founder and CEO of Pantera Capital, anchors his letter on the classic Wall Street maxim, "Buy the rumor, sell the news." This saying suggests that by the time significant events materialize, their impact is already priced into the market, limiting further gains. However, Morehead argues that the introduction of a spot bitcoin ETF could disrupt this pattern, presenting a new investment avenue in the blockchain industry.
A Shift in Market Behavior
In the crypto sector, regulatory developments have typically followed an expected trajectory. Morehead notes that events like the launch of CME futures and Coinbase's initial public offering (IPO) were characterized by initial surges and subsequent sharp declines. Nevertheless, he anticipates that the potential approval of spot bitcoin ETFs will deviate from this norm, marking a new chapter in the market behavior of BTC.
Spot Bitcoin ETFs as Game-Changers
Morehead emphasizes the game-changing nature of spot bitcoin ETFs, likening their impact to the inclusion of commodities and emerging markets in mainstream investment portfolios. He underscores the necessity of a spot bitcoin ETF for digital assets to be recognized as a legitimate asset class. In his investor letter, Morehead asserts, "Once an ETF exists, if you don't have exposure, you're effectively short."
Morehead draws a parallel to the introduction of gold ETFs, predicting that a spot bitcoin ETF will streamline investing in digital currencies. He expects a similar effect of legitimization and increased demand, similar to the boost in gold investments following the introduction of its ETF. However, there is speculation that gold ETFs have dampened the value of the metal, a concern shared by bitcoin enthusiasts regarding the leading cryptocurrency.
A Different Paradigm
Morehead firmly believes that this event will be different from previous experiences in the sector. He concludes, "The change in who owned Coinbase stock did nothing to increase access to bitcoin. This is different. A Blackrock ETF fundamentally changes access to bitcoin. It will have a significant positive impact."
Conclusion
The potential approval of spot bitcoin ETFs represents a significant turning point for digital currencies. Dan Morehead, the CEO of Pantera Capital, highlights the transformative nature of these ETFs and their ability to change market behavior towards BTC. If approved, a spot bitcoin ETF could streamline investing in digital currencies and increase their recognition as a legitimate asset class. The impact of such an ETF on the market remains to be seen, but it has the potential to be a game-changer.
What are your thoughts on the potential of spot bitcoin ETFs? Share your opinions in the comments section below.
Frequently Asked Questions
Can I keep a Gold ETF in a Roth IRA
Although a 401k plan might not provide this option, you should still consider other options like an Individual Retirement Account (IRA).
A traditional IRA allows contributions from both employee and employer. An Employee Stock Ownership Plan (ESOP) is another way to invest in publicly traded companies.
An ESOP offers tax benefits because employees can share in the company stock and any profits that it generates. The tax rate on money that is invested in an ESOP is lower than if it was held in the employees' hands.
A Individual Retirement Annuity (IRA), is also available. An IRA allows you to make regular payments throughout your life and earn income in retirement. Contributions to IRAs don't have to be taxable
How much do gold IRA fees cost?
An Individual Retirement Account (IRA) fee is $6 per month. This fee covers account maintenance fees, as well any investment costs that may be associated with your investments.
Diversifying your portfolio may require you to pay additional fees. These fees will vary depending upon the type of IRA chosen. Some companies offer checking accounts for free, while others charge monthly fees for IRA account.
Most providers also charge an annual management fee. These fees can range from 0% up to 1%. The average rate for a year is.25%. These rates are usually waived if you use a broker such as TD Ameritrade.
What precious metal should I invest in?
This question is dependent on the amount of risk you are willing and able to accept as well as the type of return you desire. Gold has been traditionally considered a haven investment, but it's not always the most profitable choice. Gold may not be right for you if you want quick profits. If patience and time are your priorities, silver is the best investment.
If you don't care about getting rich quickly, gold is probably the way to go. Silver may be a better option for investors who want long-term steady returns.
How much gold do you need in your portfolio?
The amount of money you need to make depends on how much capital you are looking for. For a small start, $5k to $10k is a good range. Then as you grow, you could move into an office space and rent out desks, etc. This will allow you to pay rent monthly, and not worry about it all at once. Rent is only paid per month.
It is also important to decide what kind of business you want to run. In my case, we charge clients between $1000-2000/month, depending on what they order. If you are doing this type of thing, it is important to think about how much you can expect from each client.
If you are doing freelance work, you probably won't have a monthly salary like I do because the project pays freelancers. So you might only get paid once every 6 months or so.
You must first decide what kind and amount of income you are looking to generate before you can calculate how much gold will be needed.
I recommend starting with $1k to $2k of gold, and then growing from there.
Can I buy gold using 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 another retirement account if you already have one.
The IRS allows individuals to contribute as high as $5,500 ($6,500 if they are married and jointly) to a traditional IRA. Individuals can contribute up $1,000 per annum ($2,000 if they are married and jointly) directly 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 that are based on gold's price. These financial instruments allow you to speculate about future prices without actually owning the metal. However, physical bullion is real gold or silver bars you can hold in your hands.
Statistics
- (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)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- 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)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
External Links
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
forbes.com
bbb.org
cftc.gov
How To
3 Ways to Invest Gold for Retirement
It's essential to understand how gold fits into your retirement plan. You have many options for investing in gold if there is a 401K account at your workplace. It is also possible to invest in gold from outside of your work environment. One example is opening a custodial accounts at Fidelity Investments if an IRA (Individual Retirement Account), if you already own one. You may also want to purchase precious metals from a reputable dealer if you don’t already have them.
These are three easy rules to remember if you invest in gold.
- Buy Gold With Your Cash – Do not use credit cards to purchase gold. Instead, put cash into your accounts. This will help you to protect yourself against inflation while also preserving your purchasing power.
- Own Physical Gold Coins – You should buy physical gold coins rather than just owning a paper certificate. Physical gold coins can be sold much faster than paper certificates. There are no storage fees for physical gold coins.
- Diversify your Portfolio – Don't put all your eggs in one basket. In other words, spread your wealth around by investing in different assets. This will reduce your risk and give you more flexibility in times of market volatility.
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By: Jamie Redman
Title: The Potential Impact of Spot Bitcoin ETFs on Digital Currencies
Sourced From: news.bitcoin.com/pantera-ceo-foresees-spot-bitcoin-etf-breaking-buy-the-rumor-sell-the-news-cycle/
Published Date: Tue, 21 Nov 2023 14:30:06 +0000
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