Introduction
Jim Cramer, host of CNBC's Mad Money show, has recently cautioned investors about investing in bitcoin and the newly launched spot bitcoin exchange-traded funds (ETFs). While he is not as vehemently opposed to these investment vehicles as SEC Chair Gary Gensler, Cramer emphasizes the need for thorough research before delving into the world of bitcoin speculation.
Jim Cramer's Bitcoin Prediction
As a former hedge fund manager and co-founder of Thestreet.com, a financial news and literacy website, Cramer has been closely monitoring the bitcoin price outlook. Specifically, he has been analyzing how the approval of spot bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) could impact the trajectory of bitcoin.
Bitcoin Price Volatility
The price of bitcoin surged above $47K in anticipation of the SEC's approval of spot bitcoin ETFs. However, following the approval, the price plummeted to a low of nearly $40K. As of now, BTC has slightly recovered and is trading at $41,589. Cramer took to social media to comment on the decline, stating, "Nasty beginning to the bitcoin selloff." He further added that the market was not able to sustain the massive increase in value brought on by the anticipation of ETFs.
Challenging Cramer's Bearish Statements
Many individuals have challenged Cramer's bearish statements, arguing that the launch of spot bitcoin ETFs was far from a failure. They pointed out that bitcoin ETFs had already surpassed silver as the second-largest commodity ETF and had witnessed significant inflows within a short span of time. Interestingly, some users on the social media platform X view Cramer's pessimistic remarks as a bullish sign for bitcoin. They have noted the "Cramer effect," where BTC tends to move in the opposite direction of Cramer's predictions.
Cautious Approach to Bitcoin Investment
While maintaining his skepticism, Cramer clarified that he is not necessarily against investing in bitcoin. He referred to JPMorgan Chase CEO Jamie Dimon, who advised against investing in bitcoin but acknowledged that individuals are free to make their own decisions. Cramer echoed this sentiment, emphasizing the importance of conducting thorough research before investing in spot bitcoin ETPs. He highlighted the disparity between the amount of money invested in these funds compared to the significant increase in bitcoin value.
Bitcoin's Longevity and Research
In response to SEC Chair Gary Gensler's statement that the approval of spot bitcoin ETFs does not imply an endorsement of bitcoin, Cramer acknowledged that bitcoin has been around for 15 years and is fairly well-established. He expressed his reluctance to discourage individuals from speculating in bitcoin as long as they conduct their own research. While he admitted to being unsure of what this research might entail, he emphasized that it is the responsibility of the investors.
Cramer's Contradictory Views on Bitcoin
In previous weeks, Cramer has presented contradictory views on bitcoin. He stated that BTC is topping out, while also describing it as a "technological marvel" that is here to stay. These conflicting statements have added to the unpredictability surrounding Cramer's predictions about bitcoin.
Conclusion
Jim Cramer's cautious approach to investing in bitcoin and spot bitcoin ETFs reflects the need for thorough research and due diligence in the volatile world of cryptocurrencies. While he warns of potential selloffs and market fluctuations, Cramer acknowledges the longevity and establishment of bitcoin. Ultimately, individuals are encouraged to make informed decisions and stay updated on the ever-evolving landscape of digital currencies.
What are your thoughts on Jim Cramer's advice and warnings about bitcoin? Share your opinions in the comments section below.
Frequently Asked Questions
How much of your portfolio should you hold in precious metals
To answer this question we need to first define precious metals. Precious metals have elements with an extremely high worth relative to other commodity. This makes them highly valuable for both investment and trading. Gold is today the most popular precious metal.
But, there are other types of precious metals available, including platinum and silver. The price volatility of gold can be unpredictable, but it is generally stable during periods of economic turmoil. It is also relatively unaffected both by inflation and deflation.
All precious metals prices tend to rise with the overall market. However, they may not always move in synchrony with each other. When the economy is in trouble, for example, gold prices tend to rise while other precious metals fall. Investors are more likely to expect lower interest rates making bonds less attractive investments.
However, when an economy is strong, the reverse effect occurs. Investors are more inclined to invest in safe assets, such as Treasury Bonds, and they will not demand precious metals. They become less expensive and have a lower value because they are limited.
You must therefore diversify your investments in precious metals to reap the maximum profits. Additionally, since the prices of precious metals tend to rise and fall together, it's best to invest in several different types of precious metals rather than just focusing on one type.
What are the advantages of a gold IRA
An Individual Retirement Account (IRA) is the best way to put money towards retirement. It is tax-deferred until it's withdrawn. You can decide how much money you withdraw each year. There are many types of IRAs. Some are better for those who want to save money for college. Some are for investors who seek 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. However, once they begin withdrawing funds, these earnings are not taxed again. This account may be worth considering if you are looking to retire earlier.
An IRA with a gold status is like any other IRA because you can put money into different asset classes. Unlike a regular IRA you don't need to worry about taxes while you wait for your gains to be available. For people who would rather invest than spend their money, gold IRA accounts are a good option.
Another benefit to owning IRA gold is the ability to withdraw automatically. You won't have the hassle of making deposits each month. You could also set up direct debits to never miss a payment.
Finally, gold is one the most secure investment options available. Because it isn’t tied to any specific country, gold’s value tends to stay stable. Even during economic turmoil, gold prices tend to stay relatively stable. As a result, it's often considered a good choice when protecting your savings from inflation.
Should You Buy Gold?
In the past, gold was considered a haven for investors during economic turmoil. Many people are now turning their backs on traditional investments like stocks and bonds, and instead look to precious metals like Gold.
While gold prices have been rising in recent years they are still low relative to other commodities, such as silver and oil.
This could be changing, according to some experts. They say that gold prices could rise dramatically with another global financial crisis.
They also noted that gold is growing in popularity because of its perceived value as well as potential return.
These are some important things to remember if your goal is to invest in gold.
- The first thing to do is assess whether you actually need the money you're putting aside for retirement. It's possible to save for retirement without putting your savings into gold. The added protection that gold provides when you retire is a good option.
- Second, you need to be clear about what you are buying before you decide to buy gold. Each account offers different levels of security and flexibility.
- Last but not least, gold doesn't provide the same level security as a savings account. Losing your gold coins could result in you never being able to retrieve them.
Do your research before you buy gold. If you already have gold, make sure you protect it.
How much tax is gold subject to in an IRA
The fair market value of gold sold is the basis for tax. When you purchase gold, you don't have to pay any taxes. It isn't considered income. If you decide to sell it later, there will be a taxable gain if its price rises.
For loans, gold can be used to collateral. Lenders try to maximize the return on loans that you take against your assets. This usually involves selling your gold. There's no guarantee that the lender will do this. They may hold on to it. Or they might decide to resell it themselves. The bottom line is that you could lose potential profit in any case.
You should not lend against your gold if it is intended to be used as collateral. If you don't plan to use it as collateral, it is better to let it be.
What is the value of a gold IRA
There are many advantages to a gold IRA. You can diversify your portfolio with this investment vehicle. You have control over how much money goes into each account.
You can also rollover funds from other retirement accounts to a gold IRA. If you are planning to retire early, this makes it easy to transition.
The best part? You don’t need to have any special skills to invest into gold IRAs. They are offered by most banks and brokerage companies. Withdrawals are made automatically without having to worry about fees or penalties.
But there are downsides. The volatility of gold has been a hallmark of its history. Understanding why you want to invest in gold is essential. Is it for growth or safety? Is it for insurance purposes or a long-term strategy? Only by knowing the answer, you will be able to make an informed choice.
If you plan on keeping your gold IRA alive for a while, you may want to consider purchasing more than 1 ounce of pure gold. A single ounce will not be sufficient to meet all your requirements. Depending on your plans for using your gold, you may need multiple ounces.
If you're planning to sell off your gold, you don't necessarily need a large amount. You can even manage with one ounce. However, you will not be able buy any other items with those funds.
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. You can invest in both options if you aren't sure which option is best for you.
In addition to being a safe investment, gold also offers potential returns. Retirees will find it an attractive investment.
While many investments promise fixed returns, gold is subject to fluctuations. Its value fluctuates 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 to gold is that it can be used as a tangible asset. Gold is much easier to store than bonds and stocks. It can also be transported.
You can always access your gold if it is stored in a secure place. Plus, there are no storage fees associated with holding physical gold.
Investing in gold can help protect against inflation. Because gold prices tend to rise along with other commodities, it's a good way to hedge against rising costs.
Additionally, it will be a benefit to have some of your savings invested into something that won't lose value. When the stock market drops, gold usually rises instead.
Another advantage to investing in gold is the ability to sell it whenever you wish. Just like stocks, you can liquidate your position whenever you need 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.
Don't buy too many at once. Start small, buying only a few ounces. You can add more as you need.
The goal is not to become rich quick. Rather, it's to build up enough wealth so you won't need to rely on Social Security benefits.
Although gold might not be the right investment for everyone it could make a great addition in any retirement plan.
Is buying gold a good way to save money for retirement?
Buying gold as an investment may not seem very appealing at first glance, but when you consider how much people spend on average on gold per year worldwide, it becomes worth considering.
The most popular form of investing in gold is through physical bullion bars. There are many ways to invest your gold. You should research all options thoroughly before making a decision on which option you prefer.
If you don’t need a safe place for your wealth, then buying shares of mining companies or companies that extract it might be a better alternative. If you need cash flow from an investment, purchasing gold stocks is a good choice.
You also can put your money into exchange-traded funds (ETFs), which essentially give you exposure to the price of gold by holding gold-related securities instead of actual gold. These ETFs often include stocks of gold miners, precious metals refiners, and commodity trading companies.
Statistics
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- 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)
- 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)
- 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)
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 funds
investopedia.com
- Are You a Good Candidate for a Gold IRA
- What are the Options? Types, Spreads. Example. And Risk Metrics
finance.yahoo.com
forbes.com
- Gold IRA – Add Sparkle to Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
How To
Investing with 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 think that they would lose money if they invested in gold. There are many benefits to investing in gold. Below we'll look at some of them.
The oldest form of currency known to mankind is gold. It has been in use for thousands of year. It is a valuable store of value that has been used by many people throughout the world. As a means of payment, South Africa and many other countries still rely on it.
Consider the price per gram when you decide whether you should invest in or not. You must determine how much gold bullion you can afford per gram before you consider buying it. You can always ask a local jeweler what the current market rate is if you don't have it.
It is also worth noting that although gold prices have declined recently, the cost of producing gold has increased. Although gold's price has fallen, its production costs have not.
The amount of gold that you are planning to purchase is another important consideration when deciding whether or not gold should be bought. If you plan to buy enough gold to cover your wedding rings then it is probably a good idea to wait before buying any more. But, if your goal is to make long-term investments in gold, this might be worth considering. If you sell your gold for more than you paid, you can make a profit.
We hope that this article has helped you gain a better understanding and appreciation for gold as an investment option. We strongly recommend that you research all available options before making any decisions. Only then will you be able to make an informed decision.
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By: Kevin Helms
Title: Jim Cramer Warns of Bitcoin Selloff, but Stresses the Importance of Research
Sourced From: news.bitcoin.com/mad-money-host-jim-cramer-sees-nasty-beginning-to-bitcoin-selloff/
Published Date: Sun, 21 Jan 2024 01:00:08 +0000
Did you miss our previous article…
https://altcoinirareview.com/franklin-templeton-expands-crypto-horizons-and-anticipates-more-etp-filings/
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