JPMorgan Analyst Predicts Looming Bitcoin Selloff
JPMorgan analyst, Nikolaos Panigirtzoglou, recently shared his outlook on the price of Bitcoin on LinkedIn. He specifically highlighted the impact of the launch of spot Bitcoin exchange-traded funds (ETFs) and the outflows from Grayscale's Bitcoin fund. Grayscale recently converted its Bitcoin trust (GBTC) into a spot Bitcoin ETF after receiving approval from the U.S. Securities and Exchange Commission (SEC) on January 10th, together with 10 other funds.
According to Panigirtzoglou, the Bitcoin price has declined by more than 10% since the launch of spot Bitcoin ETFs last week. He believes that this decline is due to profit-taking and the "buy the rumor/sell the fact" dynamics. Prior to the approval of the spot Bitcoin ETFs, the price of BTC rose to over $47,000, only to drop after the approval. Currently, the cryptocurrency is trading at $41,697.
Panigirtzoglou also mentioned the $1.5 billion outflow from Grayscale's GBTC fund, which has had a significant impact. He noted that GBTC investors who had been buying the fund at a discount to NAV in anticipation of its eventual ETF conversion are now taking full profits and exiting the Bitcoin space entirely. They are not shifting to cheaper spot Bitcoin ETFs.
The JPMorgan analyst estimated that up to $3 billion had been invested in GBTC in the secondary market during 2023 to take advantage of the discount to NAV. He predicts that if this estimate is correct, with $1.5 billion already exiting, there could be an additional $1.5 billion that will exit the Bitcoin market through profit-taking on GBTC. This will put further pressure on Bitcoin prices in the coming weeks.
Since January 12th, Grayscale's Bitcoin ETF has seen an outflow of 50,106.59 BTC, valued at over $2 billion. Panigirtzoglou also analyzed other spot Bitcoin ETFs that launched on January 11th, including Blackrock's Ishares Bitcoin Trust (IBIT) and Fidelity's Wise Origin Bitcoin Fund (FBTC). These ETFs received a total inflow of $3 billion in just four days, reflecting a rotation from existing Bitcoin vehicles, such as futures-based Bitcoin ETFs, or from retail investors shifting from digital wallets held with exchanges/retail brokers to cheaper spot Bitcoin ETFs.
In conclusion, JPMorgan warns of an incoming Bitcoin selloff due to the anticipated $3 billion outflow from Grayscale's Bitcoin fund. The launch of spot Bitcoin ETFs and the profit-taking on GBTC are expected to put further pressure on Bitcoin prices in the near future. It remains to be seen how these developments will impact the overall cryptocurrency market.
What are your thoughts on JPMorgan's Bitcoin price prediction and the estimated outflow from Grayscale? Let us know in the comments section below.
Frequently Asked Questions
What tax is gold subject in an IRA
The fair market value at the time of sale is what determines how much tax you pay on gold sales. You don't have tax to pay when you buy or sell gold. It's not considered income. If you decide to sell it later, there will be a taxable gain if its price rises.
Gold can be used as collateral for loans. Lenders will seek the highest return on your assets when you borrow against them. Selling gold is usually the best option. The lender might not do this. They may just keep it. They might decide to sell it. In either case, you risk losing potential profits.
If you plan on using your gold as collateral, then you shouldn't lend against it. You should leave it alone if you don't intend to lend against it.
What is a gold IRA account?
For people who are looking to invest in precious materials, Gold Ira account accounts provide tax-free investments.
You can purchase gold bullion coins in physical form at any moment. You don't have a retirement date to invest in gold.
The beauty of owning gold as an IRA is you can hold on to it forever. You won't have to pay taxes on your gold investments when you die.
Your heirs can inherit your gold and avoid capital gains taxes. Because your gold doesn't belong to the estate, it's not necessary to include it on your final estate plan.
To open a gold IRA, you will first need to create an individual retirement account (IRA). Once you've done that, you'll receive an IRA custody. This company acts as a mediator between you, the IRS.
Your gold IRA custody will take care of the paperwork and send the forms to IRS. This includes filing annual reports.
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You'll have to pay taxes if you take your gold out of your IRA. If you take out the whole amount, you'll be subject to income taxes as well as a 10 percent penalty.
You may not be required to pay taxes if you take out only a small amount. However, there are exceptions. For example, taking out 30% or more of your total IRA assets, you'll owe federal income taxes plus a 20 percent penalty.
It is best to not take out more than 50% annually of your total IRA assets. You'll be facing severe financial consequences if you do.
Can I keep a Gold ETF in 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).
Traditional IRAs allow for contributions from both employees and employers. Another option is to invest in publicly traded corporations with an Employee Stockownership Plan (ESOP).
An ESOP provides tax advantages because employees share ownership of company stock and profits the business generates. The money invested in the ESOP is then taxed at lower rates than if it were held directly in the hands of the employee.
Also available is an Individual Retirement Annuity. You can make regular payments to your IRA throughout your life, and you will also receive income when you retire. Contributions to IRAs can be made without tax.
Is gold a good investment IRA?
For anyone who wants to save some money, gold can be a good investment. It's also a great way to diversify your portfolio. But gold is not all that it seems.
It has been used as a currency throughout history and is still a popular method of payment. It is often called “the most ancient currency in the universe.”
Gold, unlike other paper currencies created by governments is mined directly from the earth. This makes it highly valuable as it is hard and rare to produce.
The price of gold fluctuates based on supply and demand. People tend to spend more when the economy is healthy, which means that fewer people are able to mine gold. The result is that gold's value increases.
On the flip side, people save cash for emergencies and don't spend it. This means that more gold is produced, which reduces its value.
This is why it makes sense to invest in gold for individuals and companies. If you have gold to invest, you will reap the rewards when the economy expands.
You'll also earn interest on your investments, which helps you grow your wealth. If gold's value falls, you don't have to lose any of your investments.
What is the best precious-metal to invest?
This question depends on how risky you are willing to take, and what return you want. While gold is considered a safe investment option, it can also be a risky choice. For example, if you need a quick profit, gold may not be for you. Silver is a better investment if you have patience and the time to do it.
If you don’t desire to become rich quickly, gold may be your best option. Silver may be a better option for investors who want long-term steady returns.
Statistics
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- 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)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
External Links
investopedia.com
- Do You Need a Gold IRA to Get Retirement?
- What are the Options Types, Spreads. Example. And Risk Metrics
irs.gov
cftc.gov
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear In 90 – WSJ
- Are you interested in keeping gold in your IRA at-home? It's Not Exactly Legal – WSJ
How To
Guidelines for Gold Roth IRA
Start saving as soon as possible to save for your retirement. As soon as you become eligible, which is usually around age 50, start saving and keep it up throughout your career. It is important to invest enough money each and every year to ensure you get adequate growth.
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 permit you to make contributions, but not pay any tax until your earnings are withdrawn. They are a great option for those who do not have access to employer matching money.
Save regularly and continue to save over time. If you don't contribute the maximum amount, you will miss any tax benefits.
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By: Kevin Helms
Title: JPMorgan Warns of Incoming Bitcoin Selloff With Anticipated $3 Billion Grayscale Outflow
Sourced From: news.bitcoin.com/jpmorgan-warns-of-incoming-bitcoin-selloff-with-anticipated-3-billion-grayscale-outflow/
Published Date: Mon, 22 Jan 2024 01:00:46 +0000
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JPMorgan: Approval of Spot Bitcoin ETFs Could Lead to Significant Drop in Bitcoin Prices
