Established cryptocurrency investors continue to absorb Bitcoin (BTC) at a rate of 50,000 coins per month, valued at $1.35 billion. This is according to the latest on-chain report by blockchain analytics firm, Glassnode. This demand surge is occurring as the broader digital asset market remains remarkably quiet, both on-chain and across exchanges.
Bitcoin Long-Term 'Hodlers' Maintain Firm Grip Amidst Quiet Market
Despite the significant price fluctuations of Bitcoin this year, the group of long-term investors, also known as "hodlers", remains steadfast, as shown in Glassnode's latest report. The Hodler Net Position Change metric from Glassnode indicates that these investors, specifically those who have held coins for at least 155 days, are removing over 50,000 BTC from exchanges each month. This data underlines both the tightening supply and the unwillingness among experienced investors to transact under the present market conditions.
Glassnode points out that the market has been experiencing low and contracting liquidity, similar to the bear markets of 2014-15 and 2018-19, which has now lasted 535 days. Both the value transferred on-chain and the influx of new capital into the Bitcoin network are at multi-year lows. Exchange activity also shows a widespread lack of interest among investors. The 30-day average for total exchange volume is currently around $1.5 billion, a 75.5% decline from its peak of $6 billion in May 2021.
Identification of Peak Altseason Regimes
In an effort to pinpoint periods of intense altcoin speculation, Glassnode has developed a model to evaluate risk-on and risk-off environments through the lens of capital rotation. Despite altcoin price volatility, this framework indicates that capital is not currently moving from Bitcoin through Ethereum and stablecoins at escalating rates, a characteristic of "altseason mania."
According to Glassnode's report, the model is achieved by monitoring a positive and increasing 30-day change in the ETH Realized Cap and Stablecoin Total Supply. The model simulates the waterfall effect of capital moving from larger caps to smaller caps.
In spite of the wild fluctuations in altcoin prices, Glassnode suggests that these oscillations are more a result of existing low liquidity than a genuine risk-on mood. Currently, hodlers are voraciously acquiring BTC, restricting supply in anticipation of an upcoming bull surge. Furthermore, with the next reward halving only 196 days away, we are likely to see an even more intense squeeze on supply.
What's Your Take?
What are your thoughts on Glassnode’s data regarding long-term Bitcoin holders and the identification of peak altseason regimes? We welcome your thoughts and opinions on this subject in the comments section below.
Frequently Asked Questions
What amount should I invest in my Roth IRA?
Roth IRAs allow you to deposit your money tax-free. These accounts are not allowed to be withdrawn before the age of 59 1/2. However, if your goal is to withdraw funds before that time, there are certain rules you must observe. First, you can't touch your principal (the initial amount that was deposited). No matter how much money you contribute, you cannot take out more than was originally deposited to the account. If you take out more than the initial contribution, you must pay tax.
The second rule is that your earnings cannot be withheld without income tax. Also, taxes will be due on any earnings you take. Let's take, for example, $5,000 in annual Roth IRA contributions. Let's further assume you earn $10,000 annually after contributing. This would mean that you would have to pay $3,500 in federal income tax. That leaves you with only $6,500 left. Because you can only withdraw what you have initially contributed, this is all you can take out.
If you took $4,000 from your earnings, you would still owe taxes for the $1,500 remaining. You would also lose half of your earnings because they are subject to another 50% tax (half off 40%). So even though your Roth IRA ended up having $7,000, you only got $4,000.
There are two types: Roth IRAs that are traditional and Roth. Traditional IRAs allow pre-tax contributions to be deducted from your taxable tax income. Your traditional IRA can be used to withdraw your balance and interest when you are retired. You can withdraw as much as you want from a traditional IRA.
Roth IRAs don't allow you deduct contributions. But once you've retired, you can withdraw the entire contribution amount plus any accrued interest. There is no minimum withdrawal required, unlike a traditional IRA. It doesn't matter if you are 70 1/2 or older before you withdraw your contribution.
Can I purchase gold with my self directed IRA?
You can purchase gold with your self-directed IRA, but you must first open an account at a brokerage firm like TD Ameritrade. Transfer funds from an existing retirement account are also possible.
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 $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. They let you speculate on future price without having to own the metal. You can only hold physical bullion, which is real silver and gold bars.
What are the pros and cons of a gold IRA?
An Individual Retirement Account (IRA), unlike regular savings accounts, doesn't require you to pay tax on 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. However, there are also disadvantages to this type of investment.
You could lose all of your accumulated money if you take out too much from your IRA. The IRS may prevent you from taking out your IRA funds until you reach 59 1/2. If you do withdraw funds from your IRA you will most likely be required to pay a penalty.
The downside is that managing your IRA requires fees. Many banks charge between 0.5% and 2.0% per year. Others charge management fees that range from $10 to $50 per month.
If you prefer your money to be kept out of a bank, then you will need insurance. Insurance companies will usually require that you have at least $500,000. Some insurers may require you to have insurance that covers losses up $500,000.
If you are considering a Gold IRA, you need to first decide how much of it you would like to use. Some providers limit the amount of gold that you are allowed to own. Some providers allow you to choose your weight.
You'll also need to decide whether to buy physical gold or futures contracts. Gold futures contracts are more expensive than physical gold. Futures contracts, however, allow for greater flexibility in buying gold. They enable you to establish a contract with an expiration date.
Also, you will need to decide on the type of insurance coverage you would like. The standard policy doesn't include theft protection or loss due to fire, flood, or earthquake. However, it does cover damage caused by natural disasters. You might consider purchasing additional coverage if your area is at high risk.
In addition to insurance, you'll need to consider the cost of storing your gold. Insurance won't cover storage costs. Banks charge between $25 and $40 per month for safekeeping.
If you decide to open a gold IRA, you must first contact a qualified custodian. A custodian maintains track of all your investments and ensures you are in compliance with federal regulations. Custodians can't sell assets. Instead, they must maintain them for as long a time as you request.
After you have decided on the type of IRA that best suits you, you will need to complete paperwork detailing your goals. Your plan should include information about the investments you want to make, such as stocks, bonds, mutual funds, or real estate. The plan should also include information about how much you are willing 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. After reviewing your application, the company will send you a confirmation mail.
A financial planner is a good idea when opening a gold IRA. A financial planner can help you decide the type of IRA that is right for your needs. They can help you find cheaper insurance options to lower your costs.
Should You Open a Precious Metal IRA?
It is essential to be aware of the fact that precious metals do not have insurance coverage before opening an IRA. You cannot recover any money you have invested. This includes losing all your investments due to theft, fire, flood, etc.
You can protect yourself against such losses by purchasing physical gold and silver coins. These items can be lost because they have real value and have been around for thousands years. You would probably get more if you sold them today than you paid when they were first created.
Consider a reputable business that offers low rates and good products when opening an IRA. You should also consider using a third party custodian to protect your assets and give you access at any time.
When you open an account, keep in mind that you won't receive any returns until your retirement. Remember the future.
How much should precious metals make up 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. Gold is currently the most widely traded precious metal.
However, many other types of precious metals exist, including silver and platinum. The price of gold tends to fluctuate but generally stays at a reasonably stable level during periods of economic turmoil. It is also not affected by inflation and depression.
As a general rule, the prices for all precious metals tend to increase with the overall market. However, the prices of precious metals do not always move in sync with one another. If the economy is struggling, the gold price tends to rise, while the prices for other precious metals tends to fall. Investors are more likely to expect lower interest rates making bonds less attractive investments.
When the economy is healthy, however, the opposite effect occurs. Investors want safe assets such Treasury Bonds and are less inclined to demand precious metals. They are more rare, so they become more expensive and less valuable.
To maximize your profits when investing in precious metals, diversify across different precious metals. You should also diversify because precious metal prices can fluctuate and it is better to invest in multiple types of precious metals than in one.
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 “precious metals” because they are hard to find, and therefore very valuable. These are good investments for your cash and will help you protect yourself from economic instability and inflation.
Bullion is often used to refer to precious metals. 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.
With a precious metal IRA, you invest in bullion directly rather than purchasing shares of stock. This means you'll receive dividends every year.
Precious Metal IRAs don’t require paperwork nor have annual fees. Instead, you only pay a small percentage on your gains. You can also access your funds whenever it suits you.
What precious metals could you invest in to retire?
The best precious metal investments are gold and silver. They're both easy to buy and sell and have been around forever. These are great options to diversify your portfolio.
Gold: One of the oldest forms of currency, gold, is one of mankind's most valuable. It is stable and very secure. It is a good way for wealth preservation during uncertain times.
Silver: Silver has been a favorite among investors for years. This is a great choice for people who want to avoid volatility. Silver is more volatile than gold. It tends to rise rather than fall.
Platinium: Platinum is another form of precious metal that's becoming increasingly popular. It's resistant to corrosion and durable, similar to gold and silver. It's however much more costly than any of its counterparts.
Rhodium. Rhodium is used as a catalyst. It is also used as a jewelry material. It is also quite affordable compared with other types of precious metals.
Palladium: Palladium, which is a form of platinum, is less common than platinum. It's also much more affordable. It's a popular choice for investors who want to add precious metals into their portfolios.
- 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)
- 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)
- 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)
- 7 U.S. Code SS7 – Designation Boards of Trade as Contract Markets
- 26 U.S. Code SS 408 – Individual retirement funds
- Are You a Good Candidate for a Gold IRA
- What are the Options Types, Spreads. Example. And Risk Metrics
Investing in gold or 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 comes from the fact most people see gold prices falling due to the global economy. They feel that gold investment would cause them to lose money. However, investing in gold can still provide significant benefits. Let's take a look at some of the benefits.
One of the oldest currencies known to man is gold. It has been used for thousands of years. People around the world have used it as a store of value. It is still used as a payment method by South Africa and other countries.
The first point to consider when deciding whether or not you should invest in gold is what price you want to pay per gram. You must determine how much gold bullion you can afford per gram before you consider buying it. 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 worth noting, however, that while gold prices have fallen recently the cost of producing gold is on the rise. Although the price of gold has dropped, production costs have not.
When deciding whether to buy gold, another thing to consider is how much gold you intend on buying. It is sensible to avoid buying gold if you are only looking to cover the wedding rings. It is worth considering if you intend to use it for long-term investment. You can profit if you sell your gold at a higher price than you bought 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 doing so can you make an informed decision.
By: Jamie Redman
Title: Bitcoin Long-Term Investors Persistently Absorb $1.35B Monthly Amidst Quiet Altcoin Market
Sourced From: news.bitcoin.com/report-long-term-holders-gobble-up-1-35b-in-bitcoin-each-month-while-altcoin-mania-lies-dormant/
Published Date: Wed, 11 Oct 2023 18:00:56 +0000
Did you miss our previous article…