JPMorgan's Analysis of Bitcoin's Price Outlook
Global investment bank JPMorgan has provided its insights into the recent crypto market developments, particularly the decline in the price of Bitcoin (BTC) from over $47,000 to below $39,000 following the approval of the spot Bitcoin exchange-traded fund (ETF).
One significant factor contributing to the Bitcoin selloff is the substantial outflows from Grayscale's Bitcoin Trust (GBTC), which recently converted into a spot Bitcoin ETF after receiving approval from the U.S. Securities and Exchange Commission (SEC) on January 10. Since January 12, GBTC's Bitcoin holdings have decreased by 114,367.39 BTC, equivalent to $4.77 billion based on the prevailing BTC exchange rates as of January 27.
JPMorgan strategist Nikolaos Panigirtzoglou stated on Thursday that "Given $4.3 billion has already been withdrawn from GBTC, we can conclude that GBTC profit-taking has mostly occurred." He further elaborated that this suggests that the downward pressure on Bitcoin resulting from this source should now be largely behind us.
In a previous prediction, Panigirtzoglou anticipated that $3 billion would be withdrawn from GBTC, based on his earlier estimation that up to $3 billion had been invested in GBTC in the secondary market during 2023 to take advantage of the discount to net asset value (NAV). He explained that as this $3 billion exits the Bitcoin market through profit-taking from GBTC, it would exert downward pressure on the price of Bitcoin.
Supporting this viewpoint, John Todaro from Needham noted in a report that Thursday saw one of the lowest net outflows from GBTC and the third consecutive day of declining outflows, signaling a potential slowdown in redemptions. He emphasized that while it is challenging to quantify the remaining outflows from GBTC, the two main drivers of selling, namely outflows driven by the FTX estate and arbitrage funds, are nearly exhausted.
Additionally, JPMorgan analyst Kenneth Worthington commented, "We believe the catalyst of Bitcoin ETFs, which has propelled the ecosystem out of its winter, will disappoint market participants." Consequently, the investment bank downgraded the rating of Coinbase stock (Nasdaq: COIN) from Neutral to Underweight.
What are your thoughts on JPMorgan analyst Nikolaos Panigirtzoglou's assessment of Bitcoin's price? Share your opinions in the comments section below.
Frequently Asked Questions
What are the benefits of a Gold IRA?
It is best to put your retirement money in an Individual Retirement Account (IRA). It's tax-deferred until you withdraw it. You can decide how much money you withdraw each year. There are many types available. Some are more suitable for students who wish to save money for college. Others are designed for investors looking for 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 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. This makes gold IRA accounts a great choice for those who want their money to be invested, not spent.
Another benefit to owning IRA gold is the ability to withdraw automatically. This means that you don't need to worry about making monthly deposits. To make sure you don't miss any payments, you can also set up direct deductions.
Finally, gold remains one of the best investment options today. It is not tied to any country so its value tends stay 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.
How does a gold IRA account work?
People who wish to invest in precious metals can use Gold Ira accounts as a tax-free investment vehicle.
You can purchase physical bullion gold coins at any point in time. You don’t have to wait to begin investing in gold.
You can keep gold in an IRA forever. Your gold holdings will not be subject to tax when you are gone.
Your heirs will inherit your gold, and not pay capital gains taxes. And because your gold remains outside of the estate, you aren't required to include it in your final estate report.
First, an individual retirement account will be set up to allow you to open a golden IRA. Once you've done that, you'll receive an IRA custody. This company acts in the role of a middleman between your IRS agent and you.
Your gold IRA custodian can handle all paperwork and submit necessary forms to IRS. This includes filing annual reports.
Once your gold IRA is established, you can purchase gold bullion coins. The minimum deposit is $1,000. However, you'll receive a higher interest rate if you put in more.
You'll have to pay taxes if you take your gold out of your IRA. You'll have to pay income taxes and a 10% penalty if you withdraw the entire amount.
However, if you only take out a small percentage, you may not have to pay taxes. There are exceptions. There are some exceptions. For instance, if you take out 30% or more from your total IRA assets, federal income taxes will apply plus a 20 percent penalty.
It is best to not take out more than 50% annually of your total IRA assets. You could end up with severe financial consequences.
What are the pros and disadvantages of a gold IRA
An Individual Retirement Plan (IRA) has a major advantage over regular savings accounts. It doesn't tax any interest earned. This makes an IRA great for people who want to save money but don't want to pay tax on the interest they earn. But, this type of investment comes with its own set of disadvantages.
You may lose all your accumulated savings if you take too much out of 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. Many banks charge between 0.5%-2.0% per year. 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. Many insurers require that you own at least one ounce of gold before you can make a claim. Insurance that covers losses upto $500,000.
If you decide to open a gold IRA, it is important to know how much you can use. You may be limited in the amount of gold you can have by some providers. Others allow you the freedom to choose your own weight.
It's also important to decide whether or not to buy gold futures contracts. Futures contracts for gold are less expensive than physical gold. Futures contracts provide flexibility for purchasing gold. They let you set up a contract that has a specific expiration.
You also need to decide the type and level of insurance coverage you want. The standard policy doesn’t provide theft protection or loss due fire, flood, or earthquake. It does provide coverage for damage from natural disasters, however. If you live in a high-risk area, you may want to add additional coverage.
Insurance is not enough. You also need to think about the cost of gold storage. Insurance doesn't cover storage costs. In addition, most banks charge around $25-$40 per month for safekeeping.
A qualified custodian is required to help you open a Gold IRA. Custodians keep track of your investments and ensure compliance with federal regulations. Custodians aren't allowed to sell your assets. Instead, they must hold them as long as you request.
Once you've chosen the best type of IRA for you, you need to fill in paperwork describing your goals. Information about your investments such as stocks and bonds, mutual fund, or real property should be included in your plan. The plan should also include information about how much you are willing to invest each month.
You will need to fill out the forms and send them to your chosen provider together with a check for small deposits. After receiving your application, the company will review it and mail you a confirmation letter.
Consider consulting a financial advisor when opening a golden IRA. A financial planner can help you decide the type of IRA that is right for your needs. You can also reduce your insurance costs by working with them to find lower-cost alternatives.
Can I own a gold ETF inside a Roth IRA
A 401(k) plan may not offer this option, but you should consider other options, such as an Individual Retirement Account (IRA).
A traditional IRA allows contributions from both employee and employer. Another way to invest in publicly traded companies is through an Employee Stock Ownership Plan.
An ESOP provides tax advantages because employees share ownership of company stock and profits the business generates. The money in the ESOP can then be subject to lower tax rates than if the money were in the individual's hands.
You can also get an Individual Retirement Annuity, or IRA. An IRA lets you make regular, income-generating payments to yourself over your life. Contributions to IRAs do not have to be taxable
How much should your IRA include precious metals
When investing in precious metals, the most important thing to know is that they aren't just for wealthy people. You don't have to be rich to invest in them. There are many ways that you can make money with gold and silver investments, even if you don't have much money.
You could also consider buying physical coins like bullion bars, rounds or bullion bars. Also, you could buy shares in companies producing precious metals. You may also be interested in an IRA transfer program offered by your retirement provider.
You will still reap the benefits of owning precious metals, regardless of which option you choose. These metals are not stocks, but they can still provide long-term growth.
Their prices are more volatile than traditional investments. If you decide to sell your investment, you will likely make more than with traditional investments.
How Do You Make a Withdrawal from a Precious Metal IRA?
First, you must decide if you wish to withdraw money from your IRA account. After that, you need to decide if you want to withdraw funds from an IRA account. Next, make sure you have enough money in order for you pay any fees or penalties.
Consider opening a taxable brokerage instead of an IRA if it is possible to pay a penalty if your withdrawal is made before the deadline. This option will require you to pay taxes on the amount that you withdraw.
Next, calculate how much money your IRA will allow you to withdraw. This calculation is dependent on several factors like your age when you take the money out, how long you have had the account, and whether or not your plan to continue contributing.
Once you know what percentage of your total savings you'd like to convert into cash, you'll need to determine which type of IRA you want to use. Traditional IRAs permit you to withdraw your funds tax-free once you turn 59 1/2. Roth IRAs have income taxes upfront, but you can access the earnings later on without paying additional taxes.
Once the calculations have been completed, it's time to open a brokerage accounts. Most brokers offer free signup bonuses and other promotions to entice people to open accounts. You can save money by opening an account with a debit card instead of a credit card to avoid paying unnecessary fees.
When you do finally decide to withdraw from your precious metallic IRA, you will need a safe space where you can safely store your coins. Some storage areas will accept bullion, while others require you to purchase individual coins. Either way, you'll need to weigh the pros and cons of each before choosing one.
Bullion bars, for example, require less space as you're not dealing with individual coins. You will need to count each coin individually. However, you can easily track the value of individual coins by storing them in separate containers.
Some prefer to keep their money in a vault. Others prefer to store them in a safe deposit box. You can still enjoy the benefits of bullion for many years, regardless of which method you choose.
Statistics
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (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)
- 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)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
External Links
investopedia.com
finance.yahoo.com
forbes.com
- Gold IRA: Add Some Sparkle To Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
wsj.com
- Saddam Hussein’s InvasionHelped Uncage a Bear In 1989 – WSJ
- How do you keep your IRA Gold at Home? It's Not Exactly Lawful – WSJ
How To
Guidelines for Gold Roth IRA
It is best to start saving early for retirement. Start saving as soon as possible, usually at age 50. You can continue to save throughout your career. To ensure sufficient growth, it is vital that you contribute enough each year.
You may also wish to take advantage of tax-free investments such as a SIMPLE IRA, SEP IRA, and traditional 401(k). These savings vehicles enable you to make contributions while not paying any taxes on the earnings, until they are withdrawn. They are a great option for those who do not have access to employer matching money.
Savings should be done consistently and regularly over time. You may not be eligible for any tax benefits if your contribution is less than the maximum allowed.
—————————————————————————————————————————————————————————————–
By: Kevin Helms
Title: JPMorgan Predicts Bitcoin's Downward Pressure to Ease as Grayscale Profit-Taking Subsides
Sourced From: news.bitcoin.com/jpmorgan-sees-downward-pressure-easing-for-bitcoin-as-grayscale-profit-taking-fades/
Published Date: Sun, 28 Jan 2024 00:30:17 +0000
Related posts:
Grayscale’s Bitcoin Trust GBTC: Market Sentiment Shifts and Implications for Investors
GBTC: Market Share in ETF Trade Volume Drops as $2 Billion BTC Exodus Occurs
Grayscale’s GBTC Sees a Significant Decrease in Bitcoin Holdings Amid Growing Bitcoin ETF Competition
JPMorgan: US Crypto Regulations Unlikely to Ease Despite SEC Legal Defeats
