Introduction
The open interest in Bitcoin options has reached a staggering milestone, surpassing $18 billion on December 22, 2023. This surge is indicative of traders utilizing Bitcoin options to manage risk and speculate on its future price movements. One significant factor driving this trend is the upcoming decision by the U.S. Securities and Exchange Commission (SEC) regarding a spot Bitcoin exchange-traded fund (ETF).
Bitcoin Options Gain Popularity as SEC's ETF Decision Approaches
In December 2023, the open interest in Bitcoin options hit a record high. Bitcoin options trading involves the buying or selling of contracts that give traders the choice, but not the obligation, to purchase or sell an underlying asset at a predetermined price within a specified timeframe.
Traders employ options to predict Bitcoin's price fluctuations or protect their existing holdings from potential market volatility. With the SEC set to announce its decision on a spot Bitcoin ETF by January 10, 2023, reports suggest that traders are safeguarding their investments from the expected market turbulence following the ruling.
A positive decision by the SEC could trigger a price surge, while a negative one might lead to a downturn. By using options, traders aim to shield their portfolios from adverse price movements. On December 22, 2023, the open interest in Bitcoin options was approximately $18.33 billion.
As of December 23, 2023, the open interest in Bitcoin options stands at $17.55 billion. The last quarter of the year – October, November, and December – has witnessed the highest options volume in Bitcoin's history. October saw a substantial $36.27 billion, November recorded $36.16 billion, and December, up until now, has reached $34.47 billion.
"The recent surge in Bitcoin's price is driven by leveraged and speculative investments," stated Ryan Kim, the head of Falconx's derivatives department, in an interview with Bloomberg's David Pan. "These traders may consider it wise to pay a premium to protect their leveraged long positions with Bitcoin puts, anticipating a significant price movement in either direction," Kim added.
Conclusion
As the SEC's decision on the spot Bitcoin ETF approaches, Bitcoin options open interest has skyrocketed, reaching unprecedented levels. Traders are leveraging these options to manage risk and speculate on Bitcoin's future price movements. The surge in open interest indicates the market's anticipation of the SEC's ruling and the potential impact it may have on Bitcoin's price. It is clear that Bitcoin options trading has become an essential tool for traders looking to safeguard their portfolios in the face of market volatility.
What are your thoughts on the increasing popularity of Bitcoin options ahead of the SEC's decision on January 10? Share your opinions in the comments section below.
Frequently Asked Questions
Is it a good retirement strategy to buy gold?
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. Research all options carefully and make an informed decision about what you desire from your investments.
If you don’t have the funds to invest in safe places, such as a safe deposit box or mining equipment companies, buying shares of these companies might be a better investment. If you require cash flow, gold stocks can work well.
ETFs allow you to invest in exchange-traded funds. These funds give you exposure, but not actual gold, by investing in gold-related securities. These ETFs typically include stocks from gold miners, precious metallics refiners, commodity trading companies, and other commodities.
How is gold taxed in an IRA?
The fair market price of gold when it is sold determines the tax due on its sale. If you buy gold, there are no taxes. It isn’t considered income. If you sell it after the purchase, you will get a tax-deductible gain if you increase the price.
Loans can be secured with gold. Lenders try to maximize the return on loans that you take against your assets. This often means selling gold. The lender might not do this. They might just hold onto it. They might decide to sell it. Either way you will lose potential profit.
To avoid losing money, only lend against gold if you intend to use it for collateral. Otherwise, it’s better to leave it alone.
What are the benefits of having a gold IRA?
An Individual Retirement Account (IRA) is the best way to put money towards retirement. It’s not subject to tax until you withdraw it. You have complete control over how much you take out each year. There are many types of IRAs. Some are more suitable for students who wish to save money for college. Others are made for investors seeking higher returns. Roth IRAs permit individuals to contribute after the age 59 1/2. Any earnings earned at retirement are subject to tax. The earnings earned after they withdraw the funds aren’t subject to any tax. This type account may make sense if it is your intention to retire early.
The gold IRA allows you to invest in different asset classes, which is similar to other IRAs. Unlike a regular IRA that requires you to pay taxes on the gains you make while you wait to access them, a gold IRA does not have to do this. This makes gold IRA accounts a great choice for those who want their money to be invested, not spent.
You can also enjoy automatic withdrawals, which is another benefit of owning your gold through an IRA. That means you won’t have to think about making deposits every month. 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. Because it’s not tied to any particular country, its value tends to remain steady. Even during economic turmoil the gold price tends to remain fairly stable. It is therefore a great choice for protecting your savings against inflation.
Are You Ready to Invest in Gold?
How much money you have saved, and whether or not gold was an option when you first started saving will determine the answer. If you are unsure of which option to invest in, consider both.
Gold is a safe investment and can also offer potential returns. This makes it a worthwhile choice for retirees.
Although most investments promise a fixed rate of return, gold is more volatile than others. Therefore, its value is subject to change over time.
This doesn’t mean that you should not invest in gold. It is important to consider the fluctuations when planning your portfolio.
Another advantage to gold is that it can be used as a tangible asset. Gold is less difficult to store than stocks or bonds. It can also be carried.
You can always access gold as long your place it safe. Plus, there are no storage fees associated with holding physical gold.
Investing in gold can help protect against inflation. As gold prices rise in tandem with other commodities it can be a good hedge against rising cost.
Additionally, it will be a benefit to have some of your savings invested into something that won’t lose value. Gold tends to rise when the stock markets fall.
You can also sell gold anytime you like by investing in it. You can easily liquidate your investment, just as with stocks. You don’t even need to wait for your retirement.
If you do decide to invest in gold, make sure to diversify your holdings. Don’t put all of your eggs in one basket.
Don’t buy too many at once. Begin by buying a few grams. Add more as you’re able.
The goal is not to become rich quick. It’s not to get rich quickly, but to accumulate enough wealth to no longer need Social Security benefits.
And while gold might not be the best investment for everyone, it could be a great supplement to any retirement plan.
What Should Your IRA Include in 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. You can actually make money without spending a lot on gold or silver investments.
You may consider buying physical coins such as bullion bars or rounds. You could also buy shares in companies that produce precious metals. Or, you might want to take advantage of an IRA rollover program offered by your retirement plan provider.
You’ll still get the benefit of precious metals no matter which country you live in. Although they aren’t stocks, they offer the possibility for long-term gains.
And, unlike traditional investments, their prices tend to rise over time. This means that if you decide on selling your investment later, you’ll likely get more profit than you would with traditional investing.
How much of your portfolio should be in precious metals?
To answer this question, we must first understand what precious metals are. Precious metals refer to elements with a very high value relative other commodities. They are therefore very attractive for investment and trading. Gold is today the most popular precious metal.
However, many other types of precious metals exist, including silver and platinum. The price volatility of gold can be unpredictable, but it is generally stable during periods of economic turmoil. It also remains relatively unaffected by inflation and deflation.
In general, all precious metals have a tendency to go up with the market. But they don’t always move in tandem with one another. If the economy is struggling, the gold price tends to rise, while the prices for other precious metals tends to fall. Investors expect lower interest rates which makes bonds less appealing investments.
In contrast, when the economy is strong, the opposite effect occurs. Investors prefer safe assets such as Treasury Bonds and demand fewer precious metals. Since these are scarce, they become more expensive and decrease in value.
Therefore, to maximize profits from investing in precious metals, you must diversify across multiple precious metals. It is also a good idea to diversify your investments in precious metals, as prices tend to fluctuate.
What precious metals do you have that you can invest in for your retirement?
The best precious metal investments are gold and silver. Both can be easily bought and sold, and have been around since forever. Consider adding them to the list if you’re looking to diversify and expand your portfolio.
Gold: This is the oldest form of currency that man has ever known. It is also extremely safe and stable. It is a good way for wealth preservation during uncertain times.
Silver: Investors have always loved silver. It’s a great option for those who want stability. Silver tends to move up, not down, unlike gold.
Platinum: A new form of precious metal, platinum is growing in popularity. Like gold and silver, it’s very durable and resistant to corrosion. It is, however, more expensive than its competitors.
Rhodium: Rhodium can be used in catalytic convertors. It is also used for jewelry making. It is relatively affordable when compared to other types.
Palladium (or Palladium): Palladium can be compared to platinum, but is much more common. It’s also much more affordable. It is a preferred choice among investors who are looking to add precious materials to their portfolios.
Statistics
- 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)
- (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)
- If you take distributions before hitting 59.5, you’ll owe a 10% penalty on the amount withdrawn. (lendedu.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)
External Links
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 legal – WSJ
forbes.com
- Gold IRA: Add some sparkle to your retirement nest egg
- Understanding China’s Evergrande Crisis – Forbes Advisor
finance.yahoo.com
bbb.org
How To
The best place to buy silver or gold online
Before you can buy gold, it is important to understand its workings. Gold is a precious metallic similar to Platinum. It is rare and used as money due to its durability and resistance against corrosion. It’s difficult to use, so most people prefer purchasing jewelry made from it rather than actual bars.
Today, there are two types available in gold coins: one is legal tender and the other is bullion. Legal tender coins are designed for circulation in a country. They often have denominations like $1 or $5 or $10.
Bullion coins are minted for investment purposes only, and their values increase over time due to inflation.
They cannot be used in currency exchanges. One example is that if someone buys $100 worth gold, they get 100 grams with a $100 value. Each dollar spent by the buyer is worth 1 gram.
Next, you need to find out where to buy gold. There are several options available if your goal is to purchase gold from a dealer. First off, you can go through your local coin shop. You could also look into eBay or other reputable websites. You may also be interested in buying gold through private sellers online.
Individuals selling gold at wholesale prices and retail prices are known as private sellers. Private sellers typically charge 10% to 15% commission on each transaction. You would receive less money from a private buyer than you would from a coin store or eBay. However, this option is often a great choice when investing in gold since it gives you more control over the item’s price.
Another way to buy gold is by investing in physical gold. It is easier to store physical gold than paper certificates. But, you still have to take care of it. You need to make sure that your physical gold is safe by storing it in an impenetrable container like a vault or safety depositbox.
When buying gold on your own, you can visit a bank or a pawnshop. A bank can offer you a loan for the amount that you need to buy gold. Small establishments that allow customers to borrow money for items they have brought are called pawnshops. Banks often charge higher interest rates then pawnshops.
Another way to purchase gold is to ask another person to do it. Selling gold can be as easy as selling. Set up a simple account with GoldMoney.com and you will start receiving payments instantly.
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By: Jamie Redman
Title: Bitcoin Options Open Interest Soars to Unprecedented Levels Ahead of SEC ETF Decision
Sourced From: news.bitcoin.com/bitcoin-options-open-interest-skyrockets-past-18-billion-as-traders-anticipate-sec-etf-decision/
Published Date: Sun, 24 Dec 2023 18:30:17 +0000
