Institutional Crypto Activity in North America
According to a recent report by blockchain forensics firm Chainalysis, North America is leading the way in terms of cryptocurrency usage, despite ongoing regulatory uncertainty. The report also reveals that stablecoin-related activity has been decreasing, with users shifting away from U.S.-based services. Additionally, the region's share in decentralized finance (defi) usage has declined.
The report states that North America is the world's largest crypto market, with around $1.2 trillion in value received on-chain between July 2022 and June 2023. This represents 24.4% of the global transaction activity during the studied period. Interestingly, the authors found that institutions play a bigger role in North America's crypto market compared to other regions, with nearly 77% of the transaction volume driven by transfers of at least $1 million.
The United States is the main driver of this activity, with a significant contribution from Canada in terms of transaction volume. In fact, the U.S. ranks first overall worldwide, according to the report. However, despite North America's dominance in the crypto market, overall crypto activity in the region has fallen. This trend is observed in other regions as well and is attributed to negative events over the past year, such as the collapse of crypto exchange FTX and the troubles with crypto-friendly banks in the U.S. The decline is largely due to institutional investors pulling back from the market.
Decrease in Stablecoin Usage
The report also highlights a decrease in stablecoin usage in North America. Between February 2023 and June 2023, stablecoins fell from over 70% to below 49% of North America's on-chain transaction volume. This shift is attributed to activity moving to non-U.S. licensed platforms. While stablecoins remain the most widely used crypto asset on the continent, Chainalysis notes that the United States may be losing regulatory oversight of the stablecoin market. More crypto users are pursuing stablecoin-related activity with trading platforms and issuers headquartered abroad.
Decline in Defi Usage
Although North America is still a leader in defi usage, its share of global activity in this space has fallen significantly during the examined period. The report reveals that the region's on-chain activity has been split evenly between defi and centralized exchanges.
The Future of Crypto in North America
On a positive note, the report indicates that on-chain crypto activity has started to gradually increase since June 2023. Chainalysis analysts believe that regulation will play a crucial role in the continued growth of crypto in North America. The company states that "as the region rebounds from crypto winter, regulation will play an important role in its recovery." However, there has been criticism from the industry regarding the current regulatory approach by U.S. authorities. Many believe that enforcing existing rules through courts, rather than adopting crypto-specific regulations, may hinder the growth of the industry. This has already led major U.S. players to seek expansion elsewhere.
In conclusion, despite regulatory uncertainty, North America remains the largest crypto market globally. However, the region has experienced a decline in overall crypto activity, stablecoin usage, and defi usage. The future growth of the crypto industry in North America will largely depend on effective regulation that supports innovation and attracts institutional investors.
Frequently Asked Questions
Can I hold physical gold in my IRA?
Gold is money. 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. Although owning gold does not guarantee that you will make money investing in it, there are many reasons to consider adding gold into your retirement portfolio.
Another reason is the fact that gold historically has performed better than other assets in times of financial panic. Between August 2011 and early 2013 gold prices soared nearly 100 percent, while the S&P 500 plunged 21 percent. During these turbulent market times, gold was among few assets that outperformed the stocks.
Another advantage of investing in gold is that it's one of the few assets with virtually zero counterparty risk. You still have your shares even if your stock portfolio falls. If you have gold, it will still be worth your shares even if the company in which you invested defaults on its debt.
Finally, gold offers liquidity. You can sell your gold at any time without worrying about finding a buyer, which is a major advantage over other investments. It makes sense to buy small quantities of gold, as it is more liquid than other investments. This allows you take advantage of the short-term fluctuations that occur in the gold markets.
How does a gold IRA account work?
You can buy physical gold bullion coins at any time. You don’t have to wait to begin investing in gold.
You can keep gold in an IRA 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. You don't need to include your gold in your final estate report, as it isn't part of the estate.
First, an individual retirement account will be set up to allow you to open a golden IRA. Once you've done so, you'll be given an IRA custodian. This company acts as a mediator between you, the IRS.
Your gold IRA custodian can handle all paperwork and submit necessary forms to IRS. This includes filing annual returns.
You'll have to pay taxes if you take your gold out of your IRA. If you're withdrawing the entire balance, you'll owe income taxes plus a 10 percent penalty.
A small percentage may mean that you don't have to pay taxes. 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's best not to take out more 50% of your total IRA investments each year. You could end up with severe financial consequences.
What is the best precious metal to invest in?
This question is dependent on the amount of risk you are willing and able to accept as well as the type of return you desire. While gold is considered a safe investment option, it can also be a risky choice. Gold may not be right for you if you want quick profits. You should invest in silver if you have the patience and time.
If you're not looking to make quick money, gold is probably your best choice. If you are looking for a long-term investment that will provide steady returns, silver may be a better choice.
Can I buy gold with my self-directed IRA?
Although you can buy gold using your self-directed IRA account, you will need to open an account at a brokerage like TD Ameritrade. Transfer funds from an existing retirement account are also possible.
The IRS allows individuals to contribute up to $5,500 annually ($6,500 if married and filing jointly) to a traditional IRA. Individuals are allowed to contribute $1,000 each ($2,000 if married or filing jointly) 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 contract are financial instruments that depend on the gold price. They allow you to speculate on future prices without owning the metal itself. But, physical bullion is real bars of gold or silver that you can hold in one's hand.
- 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)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Gold IRA: Add some sparkle to your retirement nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
The History of Gold as an Asset
From the very beginning of time, gold was a currency. It was accepted worldwide and became popular due to its durability, purity, divisibility, uniformity, scarcity, and beauty. Aside from its inherent value, it could be traded internationally. There were different measures and weights for gold, as there was no standard to measure it. For example, one pound sterling in England equals 24 carats; one livre tournois equals 25 carats; one mark equals 28 carats; and so on.
The United States started issuing American coins in the 1860s made of 90% copper and 10% zinc. The result was a decrease in foreign currency demand, which led to an increase in their price. This was when the United States started minting large quantities of gold coins. The result? Gold prices began to fall. The U.S. government needed to find a solution to their debt because there was too much money in circulation. They sold some of their excess gold to Europe to pay off the debt.
Because most European countries did not trust the U.S. dollar, they started accepting gold as payment. After World War I, however, many European countries started using paper money to replace gold. Since then, the price of gold has increased significantly. Although the price of gold fluctuates today, it remains one of your most safe investments.
By: Lubomir Tassev
Title: North America Is the Largest Crypto Market Despite Regulatory Uncertainty, Chainalysis Reports
Sourced From: news.bitcoin.com/north-america-is-largest-crypto-market-despite-regulatory-uncertainty-chainalysis-reports/
Published Date: Wed, 25 Oct 2023 10:00:28 +0000