A recent analysis conducted by Kaiko Research suggests that the approval of a spot-based ethereum exchange-traded fund (ETF) could be the strongest narrative for the crypto asset. The team at Kaiko Research believes that ethereum's recent rally following the approval of bitcoin ETFs indicates that investors are betting on the regulator's approval of ether-based ETFs.
Ethereum's Potential as an ETF
The analysis by Kaiko Research highlights that the potential approval of a spot-based ethereum ETF is currently the most significant narrative surrounding the crypto asset. The analysis draws a parallel to bitcoin's performance prior to the SEC's approval of a spot bitcoin ETF.
According to data from Kaiko, in the 365 days leading up to the ETF approval, bitcoin delivered a return of 100%, surpassing ethereum's 60% return. In the weeks and days preceding the approvals, bitcoin's price soared above $48,000, with expectations of surpassing $50,000 after the spot ETFs were approved.
However, following the SEC's approval of 11 spot bitcoin ETFs, the price of bitcoin has trended downwards, while ethereum has experienced a rally. The Kaiko team suggests that this may indicate investors' anticipation of ethereum being the next in line for approval.
Investor Preference for Ethereum
Another metric highlighted by the Kaiko Research analysis is the preference for tokens related to ethereum but with higher volatility, known as ETH beta. The analysis shows that interest in ETH beta has faded post-approval, while ethereum itself has outperformed other tokens by experiencing the least decline in price.
In the second week of January, the spot volume of ethereum on centralized exchanges reached its highest level since the FTX collapse. During that week, ethereum recorded its three highest spot volume days since the beginning of 2023.
Furthermore, Kaiko's derivatives data indicates that ethereum's recent performance has been primarily driven by spot volumes rather than perpetual futures.
The Future of Ethereum's Rally
Kaiko Research concludes that while the ETF narrative is likely to reignite interest in ethereum, other catalysts such as new layer twos (L2s) or the success of Eigenn Layer and restaking may also drive the crypto asset's next rally.
What are your thoughts on the potential approval of a spot ethereum ETF? Let us know in the comments section below.
Frequently Asked Questions
How much should you have of gold in your portfolio
The amount of capital required will affect the amount you make. A small investment of $5k-10k would be a great option if you are looking to start small. As your business grows, you might consider renting out office space or desks. Renting out desks and other equipment is a great way to save money on rent. You only pay one month.
It's also important to determine what type business you'll run. My website design company charges clients $1000-2000 per month depending on the order. If you are doing this type of thing, it is important to think about how much you can expect from each client.
Freelance work is not likely to pay a monthly salary. The project pays freelancers. You might get paid only once every six months.
Before you can determine how much gold you'll need, you must decide what type of income you want.
I recommend starting with $1k-$2k of gold and growing from there.
What are the pros and cons of a gold IRA?
The main advantage of an Individual Retirement Account (IRA) over a regular savings account is that you don't have to pay taxes on any interest earned. This makes an IRA a great choice for people who are looking to save money but don’t want to pay any tax on the interest earned. But, this type of investment comes with its own set of disadvantages.
You could lose all of your accumulated money if you take out too much from your IRA. The IRS may prohibit you from withdrawing funds from your IRA before you are 59 1/2 years of age. A penalty fee will be charged if you decide to withdraw funds.
You will also need to pay fees for managing your IRA. Most banks charge 0.5% to 2.0% per annum. Other providers may charge monthly management fees, ranging between $10 and $50.
You can purchase insurance if you want to keep your money out of a bank. A majority of insurance companies require that you possess a minimum amount gold to be eligible for a claim. Insurance that covers losses upto $500,000.
If you are considering a Gold IRA, you need to first decide how much of it you would like to use. You may be limited in the amount of gold you can have by some providers. Some providers allow you to choose your weight.
It is also up to you to decide whether you want to purchase physical gold or futures. The price of physical gold is higher than that of gold futures. Futures contracts, however, allow for greater flexibility in buying gold. You can set up futures contracts with a fixed expiration date.
You will also have to decide which type of insurance coverage is best for you. The standard policy does NOT include theft protection and loss due to fire or flood. However, it does cover damage caused by natural disasters. Additional coverage may be necessary if you reside in high-risk areas.
In addition to insurance, you'll need to consider the cost of storing your gold. Storage costs are not covered by insurance. For safekeeping, banks typically charge $25-40 per month.
To open a IRA in gold, you will need to first speak with a qualified custodian. A custodian maintains track of all your investments and ensures you are in compliance with federal regulations. Custodians are not allowed to sell your assets. They must instead keep them for as long as you ask.
After you have decided on the type of IRA that best suits you, you will need to complete paperwork detailing your goals. The plan should contain information about the types of investments you wish to make such as stocks, bonds or mutual funds. You should also specify how much you want to invest each month.
Once you have completed the forms, you will need to mail them to your provider with a check and a small deposit. The company will review your application and send you a confirmation letter.
A financial planner is a good idea when opening a gold IRA. Financial planners are experts at investing and can help you determine which type of IRA is best for you. They can help you find cheaper insurance options to lower your costs.
Can I buy gold using my self-directed IRA
However, gold can only be purchased with your self-directed IRA. To do so, you must first open a brokerage account at TD Ameritrade. You can also transfer funds from an existing retirement fund.
The IRS allows individuals up to $5.500 annually ($6,500 if you are married and filing jointly). This can be contributed to a traditional IRA. Individuals can contribute up to $1,000 annually ($2,000 if married and filing jointly) directly to a Roth IRA.
If you do decide that you want to invest, it is a good idea to buy physical bullion and not in futures. Futures contract are financial instruments that depend on the gold price. They allow you to speculate on future prices without owning the metal itself. Physical bullion, however, is real gold and silver bars that you can hold in your hand.
Statistics
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (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)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
External Links
finance.yahoo.com
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
forbes.com
- Gold IRA – Add Sparkle to Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
bbb.org
How To
3 Ways to Invest in Gold for Retirement
It's important to understand how gold fits in with your retirement plan. There are many ways to invest in gold if you have a 401k account at work. You might also be interested to invest in gold outside the workplace. For example, if you own an IRA (Individual Retirement Account), you could open a custodial account at a brokerage firm such as Fidelity Investments. If precious metals aren't your thing, you may be interested in buying them from a dealer.
These are three easy rules to remember if you invest in gold.
- Buy Gold with Your Money – You don't need credit cards, or to borrow money to finance your investments. Instead, invest in cash. This will protect your against inflation and increase your purchasing power.
- Physical Gold Coins You Should Buy – Physical gold coins should be purchased over a paper certificate. The reason is that it's much easier to sell physical gold coins than certificates. Also, there are no storage fees associated with physical gold coins.
- Diversify your Portfolio – Don't put all your eggs in one basket. By investing in multiple assets, you can spread your wealth. This can reduce market volatility and help you be more flexible.
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By: Terence Zimwara
Title: The Approval of a Spot Ethereum ETF Could Drive the Crypto Asset's Rally, Says Kaiko Research
Sourced From: news.bitcoin.com/study-potential-approval-of-spot-etf-is-ethereums-strongest-narrative-right-now/
Published Date: Mon, 22 Jan 2024 13:00:59 +0000
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