A Growing Preference for Bitcoin Over Traditional Gold Investments
ARK Invest's CEO Cathie Wood believes that there is a noticeable shift in investment trends, with investors increasingly favoring bitcoin over traditional gold investments. This shift has become particularly pronounced following the introduction of spot bitcoin exchange-traded funds (ETFs), which offer investors easier access to the cryptocurrency.
In a recent video on ARK Invest's Youtube channel, Cathie Wood discussed this shift with Brett Winton, ARK's chief futurist. Wood pointed out that bitcoin has shown remarkable resilience and growth, especially during times of financial instability. She highlighted the example of March 2023, when the US faced a regional bank crisis and bitcoin's value surged by 40% while the regional bank index plummeted. According to Wood, this demonstrates bitcoin's emerging role as a "flight to safety" asset.
Wood also presented a chart comparing bitcoin's price to that of gold, showing a strong and consistent uptrend. She explained that this trend indicates bitcoin's ongoing process of partially replacing gold as a preferred investment choice. Wood expects this substitution to continue in the future.
Addressing concerns about the volatility of bitcoin following the launch of spot bitcoin ETFs, including ARK 21shares Bitcoin ETF, Wood acknowledged the anticipated price correction. Despite a 20% drop in bitcoin's price after the launch, Wood remains optimistic. She highlighted that a significant portion of the existing bitcoin supply, 15 million out of 19.5 million, has not been moved in over 155 days. This suggests a strong holding pattern among investors.
It's worth noting that ARK Invest's interest in the cryptocurrency space goes beyond bitcoin. The firm has made significant investments in Coinbase stock (COIN), although it has reduced its holdings since June 2023. Currently, ARK holds 7.187 million shares in Coinbase, valued at $843 million, indicating its continued bullish stance on the crypto sector despite market fluctuations.
Investors Shifting from Gold to Bitcoin: A Paradigm Shift?
The shift from gold to bitcoin as an investment choice raises an important question: do you agree with Cathie Wood's assessment? Are investors who traditionally seek gold now beginning to shift to bitcoin? Share your thoughts and opinions on this topic in the comments section below.
Frequently Asked Questions
What is the tax on gold in an IRA
The tax on the sale of gold is based on its fair market value when sold. You don't pay taxes when you buy gold. It is not income. If you decide to sell it later, there will be a taxable gain if its price rises.
As collateral for loans, gold is possible. Lenders look for the highest return when you borrow against assets. This usually involves selling your gold. However, there is no guarantee that the lender would do this. They might just hold onto it. Or they might decide to resell it themselves. Either way, you lose potential profit.
You should not lend against your gold if it is intended to be used as collateral. It is better to leave it alone.
What precious metal should I invest in?
This question depends on how risky you are willing to take, and what return you want. Although gold has traditionally been considered a safe investment choice, it may not be the most profitable. For example, if you need a quick profit, gold may not be for you. If patience and time are your priorities, silver is the best investment.
If you're not looking to make quick money, gold is probably your best choice. However, silver might be a better option if you're looking for an investment that provides steady returns over long periods.
How does gold perform as an investment?
The supply and the demand for gold determine how much gold is worth. Interest rates can also affect the gold price.
Because of their limited supply, gold prices can fluctuate. Physical gold is not always in stock.
Is buying gold a good way to save money for retirement?
Although gold investment may not seem appealing at first glance due to the high average global gold consumption, it's worth considering.
The most popular form of investing in gold is through physical bullion bars. You can also invest in gold in other ways. You should research all options thoroughly before making a decision on which option you prefer.
If you're not looking to secure your wealth, it may be worth considering purchasing shares in mining equipment or companies that extract gold. If you are looking for cash flow from your investment, buying gold stocks will work well.
You can also put your money in exchange traded funds (ETFs). These funds allow you to be exposed to the price and value of gold by holding gold related securities. These ETFs usually include stocks of precious metals refiners or gold miners.
Should You Open a Precious Metal IRA?
You should be aware that precious metals cannot be covered by insurance. There are no ways to recover the money you lost in an investment. All your investments can be lost due to theft, fire or flood.
Protect yourself against this type of loss by investing in physical gold or silver coins. These items have been around for thousands of years and represent real value that cannot be lost. These items are worth more today than they were when first produced.
Choose a reputable company with competitive rates and quality products if you are looking to open an IRA. You should also consider using a third party custodian to protect your assets and give you access at any time.
If you decide to open an account, remember that you won't see any returns until after you retire. Remember the future.
Statistics
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- You can only purchase gold bars at least 99.5% purity. (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)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
External Links
law.cornell.edu
- 7 U.S. Code SS7 – Designation Boards of Trade as Contract Markets
- 26 U.S. Code SS 408 – Individual retirement account
investopedia.com
- Do You Need a Gold IRA to Get Retirement?
- What are the Options Types, Spreads. Example. And Risk Metrics
wsj.com
- Saddam Hussein's Invasion Helped Uncage a Bear In 1990 – WSJ
- You want to keep gold in your IRA at home? It's not legal – WSJ
forbes.com
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. Many people believe that investing in gold is not profitable. This belief comes from the fact most people see gold prices falling due to the global economy. They fear that investing in gold will result in a loss of money. In reality, however there are still many significant benefits to gold investing. Below are some of them.
One of the oldest forms known of currency is gold. Its use can be traced back to thousands of years ago. It was used by many people around the globe as a currency store. It is still used as a payment method by South Africa and other countries.
It is important to determine the price per Gram that you will pay for gold when making a decision about whether or not to invest. It is important to determine the price per gram you are willing and able to pay for gold bullion. 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. The price of gold may have fallen, but the production costs haven’t.
Another thing to remember when thinking about whether or not you should buy gold is the amount of gold you plan on purchasing. It makes sense to save any gold you don't need to purchase if your goal is to use it for wedding rings. If you plan to do so as long-term investments, it is worth looking into. 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. Before making any investment decisions, we strongly advise that you thoroughly research all options. Only after you have done this can you make an informed choice.
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By: David Sencil
Title: ARK Invest CEO Cathie Wood: Investors Shifting from Gold to Bitcoin Amid Financial Uncertainty
Sourced From: news.bitcoin.com/bitcoin-emerges-as-flight-to-safety-asset-outshining-gold-says-cathie-wood/
Published Date: Wed, 07 Feb 2024 08:30:46 +0000
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