Bitcoin (BTC) Transaction Costs Surge
In the past three weeks, the transaction costs for bitcoin (BTC) have experienced a significant increase, reaching a peak of $15 per transfer just three days ago. This surge in transaction costs mirrors the trend seen in ethereum (ETH) fees.
Ethereum (ETH) Transaction Fees Soar
Between October 22 and November 12, 2023, the average fee for ethereum transactions has skyrocketed by 219%, rising from $2.08 to $6.64 per transaction. The rising cost is mainly due to the increased expense associated with the gas required for transferring the digital currency.
Parallel Fees for ETH and BTC Transactions
Interestingly, the cost to transfer ether closely aligns with bitcoin's transfer fees. Both average and median charges for ETH transactions are similar to those of bitcoin. However, when it comes to other operations on the Ethereum blockchain, such as engaging with a smart contract, a distinct variance emerges.
Higher Costs for DEX and NFT Transactions
Exchanging an ETH-based asset on a decentralized exchange (dex) platform can incur a fee ranging from $27.77 to $28.50 per transaction. Similarly, the expense for conducting a non-fungible token (NFT) transaction fluctuates between $46.93 to $48.16.
Bridging Assets Across Chains
On November 12, the cost of transferring assets across different chains via bridging was estimated to be between $8.93 and $9.17. Ethereum has been processing an average of approximately 1,071,448 transactions daily from October 22, 2023, to November 11, 2023.
ETH vs. BTC: Market Cap and Fees
Despite the rising transaction costs, BTC still leads ETH in terms of market capitalization, daily trading volume, and fees collected by validators compared to what BTC miners earn. Transactions on these two blockchains, which are at the forefront in terms of market cap, are significantly more expensive than their other layer one (L1) counterparts.
What are your thoughts on the increasing cost of transferring ether? Share your opinions in the comments section below.
Frequently Asked Questions
Is physical gold allowed in an IRA.
Gold is money. Not just paper currency. Gold is an asset people have used for thousands years as a place to store value and protect their wealth from economic uncertainty and inflation. Gold is a part of a diversified portfolio that investors can use to protect their wealth from financial uncertainty.
Many Americans today prefer to invest in precious metals, such as silver and gold, over stocks and bonds. Even though owning gold is not a guarantee of making money, there are many reasons why you might want to add gold to your retirement savings portfolio.
One reason is that gold historically performs better than other assets during financial panics. The S&P 500 dropped 21 percent in the same time period, while gold prices rose by nearly 100 percent between August 2011-early 2013. During turbulent market conditions gold was one of few assets that outperformed stock prices.
Another benefit to investing in gold? It has virtually zero counterparty exposure. Even if your stock portfolio is down, your shares are still yours. Gold can be worth more than its investment in a company that defaults on its obligations.
Finally, gold provides liquidity. This means that you can sell gold anytime, regardless of whether or not another buyer is available. Because gold is so liquid compared to other investments, buying it in small amounts makes sense. This allows one to take advantage short-term fluctuations within the gold price.
How to Open a Precious Metal IRA
The first step is to decide if you want an Individual Retirement Account (IRA). To open the account, complete Form 8606. Next, fill out Form 5204. This will determine the type of IRA that you are eligible for. This form should be completed within 60 days after opening the account. Once this is done, you can start investing. You could also opt to make a contribution directly from your paycheck by using payroll deduction.
To get a Roth IRA, complete Form 8903. Otherwise, it will be the same process as an ordinary IRA.
To qualify for a precious-metals IRA, you'll need to meet some requirements. The IRS says you must be 18 years old and have earned income. For any tax year, your earnings must not exceed $110,000 ($220,000 for married filing jointly). Contributions must be made on a regular basis. These rules are applicable whether you contribute through your employer or directly from the paychecks.
A precious metals IRA can be used to invest in palladium or platinum, gold, silver, palladium or rhodium. You can only purchase bullion in physical form. This means that you will not be allowed to trade shares or bonds.
There are two main drawbacks to investing through an IRA in precious metallics. First, they aren't as liquid than stocks and bonds. This makes them harder to sell when needed. They don't yield dividends like bonds and stocks. So, you'll lose money over time rather than gain it.
How Do You Make a Withdrawal from a Precious Metal IRA?
First decide if your IRA account allows you to withdraw funds. Next, ensure you have enough cash on hand to pay any penalties or fees that could be associated with withdrawing funds.
A taxable brokerage account is a better option than an IRA if you are prepared to pay a penalty for early withdrawals. You will also have to account for taxes due on any amount you withdraw if you choose this option.
Next, you need to determine how much money is going to be taken out from your IRA. This calculation will depend on many factors including your age at the time of withdrawal, how long the account has been in your possession, and whether you plan to continue contributing towards your retirement plan.
Once you determine the percentage of your total saved money you want to convert into cash, then you need to choose which type IRA you will use. Traditional IRAs allow you to withdraw funds tax-free when you turn 59 1/2 while Roth IRAs charge income taxes upfront but let you access those earnings later without paying additional taxes.
Once you have completed these calculations, you need to open your brokerage account. To encourage customers to open accounts, brokers often offer signup bonuses and promotions. To avoid unnecessary fees, however, try opening an account using a debit card rather than a credit card.
When you finally get around to making withdrawals from your precious metal IRA, you'll need a safe place where you can store your coins. Some storage facilities can accept bullion bar, while others require you buy individual coins. Before you choose one, weigh the pros and cons.
Bullion bars, for example, require less space as you're not dealing with individual coins. You will need to count each coin individually. However, keeping individual coins in a separate place allows you to easily track their values.
Some prefer to store their coins in a vault. Others prefer to place them in safe deposit boxes. Whatever method you choose to store your bullion, you should ensure it is safe and secure so you can enjoy its many benefits for many years.
How much should precious metals make up your portfolio?
This question can only be answered if we first know what precious metals are. Precious metals are those elements that have an extremely high value relative to other commodities. This makes them highly valuable for both investment and trading. Gold is by far the most common precious metal traded today.
There are many other precious metals, such as silver and platinum. The price volatility of gold can be unpredictable, but it is generally stable during periods of economic turmoil. It is also not affected by inflation and depression.
The general trend is for precious metals to increase in price with the overall market. They do not always move in the same direction. The price of gold tends to rise when the economy is not doing well, but the prices of the other precious metals tends downwards. This is because investors expect lower rates of interest, which makes bonds less attractive investments.
The opposite effect happens when the economy is strong. Investors favor safe assets like Treasury Bonds, and less precious metals. They are more rare, so they become more expensive and less valuable.
It is important to diversify your portfolio across precious metals in order to maximize your profit from precious metals investments. Furthermore, because the price of precious Metals fluctuates, it is best not to focus on just one type of precious Metals.
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- (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)
- 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)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- Saddam Hussein's InvasionHelped Uncage a Bear In 90 – WSJ
- You want to keep gold in your IRA at home? It's Not Exactly Lawful – WSJ
- 7 U.S. Code SS7 – Designation boards of trade as contract market authorities
- 26 U.S. Code SS 408 – Individual retirement accounts
- Do You Need a Gold IRA to Get Retirement?
- What are the Options Types, Spreads, Example, and Risk Metrics
- Yahoo Finance – Barrick Gold Corporation Stock Price, News & Quote – Barrick Gold Corporation (GOLD).
3 Ways to Invest in Gold for Retirement
It's essential to understand how gold fits into your retirement plan. There are many ways to invest in gold if you have a 401k account at work. You might also consider investing in gold outside your workplace. A custodial account can be opened by a brokerage firm like Fidelity Investments if you already have an IRA. If precious metals aren't your thing, you may be interested in buying them from a dealer.
These are the three rules to follow if you decide to invest in gold.
- Buy Gold with Your Money – You don't need credit cards, or to borrow money to finance your investments. Instead, invest in cash. This will help protect you against inflation and keep your purchasing power high.
- Own Physical Gold Coins – You should buy physical gold coins rather than just owning a paper certificate. The reason for this is that physical gold coins are much more easily sold than certificates. Also, there are no storage fees associated with physical gold coins.
- Diversify Your Portfolio. Never place all your eggs in the same basket. Also, diversify your wealth and invest in different assets. This helps to reduce risk and provides more flexibility when markets are volatile.
By: Jamie Redman
Title: The Rising Cost of Transferring Ethereum (ETH) and Bitcoin (BTC)
Sourced From: news.bitcoin.com/ethereum-transaction-fees-climb-219-in-3-weeks-as-onchain-crypto-transfers-become-pricier/
Published Date: Sun, 12 Nov 2023 21:00:34 +0000
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