Introduction
Bitcoin's value experienced a turbulent Tuesday, largely due to a rogue post from the U.S. Securities and Exchange Commission's hijacked X account, mistakenly proclaiming the green light for all spot bitcoin exchange-traded funds (ETFs). This erroneous message from the official Twitter of the U.S. Securities and Exchange Commission (SEC) sparked a rapid increase in bitcoin's price, soaring close to $48,000 per unit. Yet, this surge was short-lived as the price promptly dropped to around $45,000 once the market recognized the false nature of the announcement. This event stirred unease among investors and crypto enthusiasts, with some drawing parallels to a pump-and-dump strategy.
Tennessee Senator Bill Hagerty Demands Clarity
Tennessee Senator Bill Hagerty demanded clarity from the SEC, pointing to possible market manipulation. Hagerty stated, "Just like the SEC would demand accountability from a public company if they made such a colossal market-moving mistake, Congress needs answers on what just happened. This is unacceptable."
Bitcoin's Price Fluctuation and Market Response
Before this downturn, there was a noticeable upward movement, signifying strong buying interest during this timeframe. The price encountered a ceiling near $47,897, peaked, and then plunged dramatically. Currently, bitcoin's value is striving to stabilize above the $46,000 zone as of 6:45 p.m. Eastern Time. The anticipation surrounding the endorsement of a spot bitcoin ETF has injected considerable volatility, as traders respond to each update pertaining to its potential sanction. A similar situation unfolded when Cointelegraph inaccurately reported the approval of Blackrock's spot bitcoin ETF.
Optimism and Potential Impact of a Spot Bitcoin ETF
The fluctuation in bitcoin's price on Jan. 9, 2024, mirrors the intricate dynamics of market responses to regulatory developments (both accurate and spurious), expectations of key happenings like the spot BTC ETF sanction, trends in institutional investment, and the overall market mood. Despite these ups and downs, optimism persists around bitcoin, with its market capitalization eclipsing major entities such as Berkshire Hathaway in late 2023. Some believe that the sanction of a spot bitcoin ETF could significantly sway the market, likely boosting institutional involvement and enhancing liquidity.
Preparation and Reactions
Ahead of this approval, bitcoin had already seen notable price growth, surging over 160% within a year. The sector has been preparing for this event, and its occurrence might trigger diverse reactions, particularly following two previous misleading announcements. Amid the SEC's recent fake announcement, $60.58 million in BTC long positions were liquidated within the past four hours according to coinglass.com stats. Moreover, the SEC is trending on the social media platform X with more than 172,000 posts about the subject trending at 7 p.m. Eastern Time.
Conclusion
The false spot ETF approval post from the SEC caused chaos in bitcoin markets, leading to a significant price surge followed by a sharp drop. Investors and crypto enthusiasts expressed unease and concerns about market manipulation. The anticipation of a spot bitcoin ETF continues to impact bitcoin's price and market volatility. Despite the ups and downs, optimism remains, with expectations of increased institutional involvement and liquidity if a spot bitcoin ETF is sanctioned. The market is preparing for this event, and diverse reactions are expected.
Frequently Asked Questions
Can I have physical gold in my IRA
Gold is money and not just paper currency. People have been using gold for thousands of years to store their wealth and protect it from economic instability and inflation. Investors today use gold to diversify their portfolios because gold is more resilient to financial turmoil.
Today, Americans prefer precious metals like silver and gold to stocks and bonds. Even though owning gold is not a guarantee of making money, there are many reasons why you might want to add gold to your retirement savings portfolio.
Another reason is that gold has historically outperformed other assets in financial panic periods. Between August 2011 and early 2013 gold prices soared nearly 100 percent, while the S&P 500 plunged 21 percent. During turbulent market conditions gold was one of few assets that outperformed stock prices.
Another advantage of investing in gold is that it's one of the few assets with virtually zero counterparty risk. Your shares will still be yours even if your stock portfolio drops. If you have gold, it will still be worth your shares even if the company in which you invested defaults on its debt.
Finally, the liquidity that gold provides is unmatched. This means that you can sell gold anytime, regardless of whether or not another buyer is available. Because gold is so liquid compared to other investments, buying it in small amounts makes sense. This allows you to take advantage of short-term fluctuations in the gold market.
What are the benefits to having a gold IRA
It is best to put your retirement money in an Individual Retirement Account (IRA). It is tax-deferred until it's withdrawn. You are in complete control of how much you take out each fiscal year. There are many types available. Some are better suited for people who want to save for college expenses. Others are intended for investors seeking higher returns. Roth IRAs, for example, allow people to contribute after they turn 59 1/2. They also pay taxes on any earnings when they retire. The earnings earned after they withdraw the funds aren't subject to any tax. This account is a good option if you plan to retire early.
An IRA with a gold status is like any other IRA because you can put money into different asset classes. Unlike a regular IRA which requires taxes to be paid on gains as you wait to withdraw them, a IRA with gold allows you to invest in multiple asset classes. For people who would rather invest than spend their money, gold IRA accounts are a good option.
Another advantage to owning gold via an IRA is the ease of automatic withdraws. This means that you don't need to worry about making monthly deposits. Direct debits could be set up to ensure you don't miss a single payment.
Finally, gold is one of the safest investment choices available today. Because it's not tied to any particular country, its value tends to remain steady. Even in times of economic turmoil gold prices tend to remain stable. As a result, it's often considered a good choice when protecting your savings from inflation.
Should You Invest in gold for Retirement?
How much money you have saved, and whether or not gold was an option when you first started saving will determine the answer. If you're unsure about which option to choose then consider investing in both.
In addition to being a safe investment, gold also offers potential returns. Retirees will find it an attractive investment.
Most investments have fixed returns, but gold's volatility is what makes it unique. Because of this, gold's value can fluctuate over time.
However, this does not mean that gold should be avoided. This just means you need to account for fluctuations in your overall portfolio.
Another advantage of gold is its tangible nature. Gold is less difficult to store than stocks or bonds. It can also be transported.
You can always access your gold as long as it is kept safe. Additionally, physical gold does not require storage fees.
Investing in gold can help protect against inflation. You can hedge against rising costs by investing in gold, which tends to rise alongside other commodities.
Additionally, it will be a benefit to have some of your savings invested into something that won't lose value. Gold tends to rise when the stock markets fall.
Investing in gold has another advantage: you can sell it anytime you want. As with stocks, your position can be liquidated whenever you require cash. You don't have to wait for retirement.
If you do decide to invest in gold, make sure to diversify your holdings. Don't put all your eggs on one basket.
Also, don't buy too much at once. Start small, buying only a few ounces. Continue adding more as necessary.
Don't expect to be rich overnight. It is to create enough wealth that you no longer have to depend on Social Security.
And while gold might not be the best investment for everyone, it could be a great supplement to any retirement plan.
Can I buy or sell gold from 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. If you already have a retirement account, funds can be transferred to it.
Individuals can contribute as much as $5,500 per year ($6,500 if married filing 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.
If you do decide you want to invest your money in gold, you should look into purchasing physical bullion instead of futures contracts. Futures contracts are financial instruments based on the price of gold. These financial instruments allow you to speculate about future prices without actually owning the metal. But, physical bullion is real bars of gold or silver that you can hold in one's hand.
What is a Precious Metal IRA (IRA)?
You can diversify your retirement savings by investing in precious metal IRAs. This allows you to invest in gold, silver and platinum as well as iridium, osmium and other rare metals. These are “precious metals” because they are hard to find, and therefore very valuable. They make excellent investments for your money and help you protect your future from inflation and economic instability.
Precious metals often refer to themselves as “bullion.” Bullion refers to the actual physical metal itself.
Bullion can be bought via various channels, such as online retailers, large coin dealers and grocery stores.
You can invest directly in bullion with a precious metal IRA instead of buying shares of stock. This will ensure that you receive annual dividends.
Precious metal IRAs have no paperwork or annual fees. Instead, you pay a small percentage tax on the gains. You can also access your funds whenever it suits you.
Statistics
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- 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)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (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)
- 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)
External Links
cftc.gov
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 account
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear in 1990 – WSJ
- Want to Keep Gold in Your IRA at Home? It's not legal – WSJ
bbb.org
How To
Tips for Investing in Gold
Investing in Gold is a popular investment strategy. This is because there are many benefits if you choose to invest in gold. There are several options to invest in the gold. There are many ways to invest in gold. Some prefer buying physical gold coins while others prefer gold ETFs (Exchange Traded Funds).
Before buying any kind of gold, you need to consider these things.
- First, make sure you check if your country allows you own gold. If you have permission to possess gold in your country, you can then proceed. If not, you may want to consider purchasing gold from overseas.
- You should also know the type of gold coin that you desire. You can choose between yellow gold and white gold as well as rose gold.
- Thirdly, you should take into consideration the price of gold. Start small and move up. One thing that you should never forget when purchasing gold is to diversify your portfolio. Diversifying your portfolio includes stocks, bonds, mutual funds, real estate, commodities, and mutual funds.
- Last but not least, remember that gold prices fluctuate frequently. Be aware of the current trends.
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By: Jamie Redman
Title: False Spot ETF Approval Post Causes Chaos in Bitcoin Markets
Sourced From: news.bitcoin.com/turmoil-in-crypto-market-misleading-sec-post-triggers-significant-bitcoin-volatility/
Published Date: Wed, 10 Jan 2024 00:11:00 +0000
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