The Rise and Fall of Bitcoin's Price
On January 11, 2024, at 11 a.m. Eastern Time (ET), the newly launched spot bitcoin exchange-traded funds (ETFs) made a grand entrance, boasting an impressive trading volume of $2.3 billion. However, the excitement was short-lived as bitcoin's spot markets took a dramatic turn later that afternoon. The prices plummeted, and the value of bitcoin fell below the $46,000 mark, despite briefly reaching a high of $49,000.
Early Morning Surge and Subsequent Drop
Prior to the decline, bitcoin (BTC) experienced a surge in value early in the day. At around 9 a.m. (ET), it reached a peak value of $49,048 on Bitstamp. Unfortunately, this surge didn't last long, and BTC's value quickly dropped below the $46K barrier, hitting a low of $45,700 per unit. It was around 11 a.m. (ET) when Bloomberg's Senior ETF Analyst, Eric Balchunas, shared that the new spot bitcoin ETFs, alongside Grayscale's GBTC, had collectively achieved a trading volume of $2.3 billion.
"The 10 fresh spot bitcoin ETFs have seen $1.3b in trading volume so far (as a group they already topped BITO's record). If we add in GBTC we get to $2.3 [billion]," Balchunas stated. "And if we add in BITO (which is having record day too but isn't part of 'spot' race) we get $3.5b for the complex," he added. Since then, BTC's spot market price has been on a rollercoaster ride.
Volatility and Liquidations
The commencement of trading likely triggered an initial surge in demand, followed by a wave of short-term profit-taking, which is a common pattern observed after significant market events. Bitcoin's 24-hour trading volume currently stands at an impressive $57.45 billion, contributing to the total $192.48 billion traded across the entire cryptocurrency ecosystem. However, this rapid surge and subsequent drop resulted in significant liquidations of BTC long positions, with $53.58 million being wiped out in just four hours.
Coinglass.com's liquidation metrics also reported that over $119 million in BTC longs were liquidated in the past 24 hours. The introduction of spot bitcoin ETFs injected short-term volatility into the market, leading to larger price swings. These fluctuations indicate increased uncertainty and risk in the crypto market. It is not uncommon to see such market reactions following major announcements on Wall Street, as markets adapt to new information and investors adjust their portfolios. Currently, the total open interest in bitcoin options is on the rise, reaching its peak at the end of December 2023.
Resurgence of Bitcoin Futures
Alongside the rise in bitcoin options, there is also a resurgence in bitcoin futures. CME Group is currently leading the pack with $6.59 billion in bitcoin futures open interest, while Binance lags behind with $4.53 billion as of Thursday afternoon at 1:30 p.m. (ET).
Share Your Thoughts
What are your thoughts on bitcoin's market action on Thursday when the spot bitcoin ETFs started trading? Feel free to share your opinions and insights in the comments section below.
Frequently Asked Questions
What are the benefits of a Gold IRA?
The best way to invest money for retirement is by putting it into an Individual Retirement Account (IRA). You can withdraw it at any time, but it is tax-deferred. You control how much you take each year. There are many types and types of IRAs. Some are better suited for people who want to save for college expenses. Others are designed for investors looking for higher returns. Roth IRAs permit individuals to contribute after the age 59 1/2. Any earnings earned at retirement are subject to tax. But once they start withdrawing funds, those earnings aren't taxed again. This account may be worth considering if you are looking to retire earlier.
Because you can invest money in many asset classes, a gold IRA works similarly 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 excellent options for people who prefer to keep their money invested instead of spending it.
Another advantage to owning gold via an IRA is the ease of automatic withdraws. This eliminates the need to constantly make deposits. To avoid missing a payment, direct debits can be set up.
Gold is one of today's most safest investments. Its value is stable because it's not tied with any one country. Even during economic turmoil the gold price tends to remain fairly stable. This makes it a great investment option to protect your savings from inflation.
How do you withdraw from an IRA that holds precious metals?
You first need to decide if you want to withdraw money from an IRA account. Then make sure you have enough cash to cover any fees or penalties that may come with withdrawing funds from your retirement plan.
If you are willing to pay a penalty for early withdrawal, you should consider opening a taxable brokerage account instead of an IRA. This option will require you to pay taxes on the amount that you withdraw.
Next, determine how much money you plan to withdraw from your IRA. 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 have an idea of the amount of your total savings you wish to convert into cash you will need to decide what type of IRA you want. 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.
Finally, you'll need to open a brokerage account once these calculations are completed. To encourage customers to open accounts, brokers often offer signup bonuses and promotions. It is better to open an account with a debit than a creditcard in order to avoid any unnecessary fees.
When it comes time to withdraw your precious metal IRA funds, you will need a safe location where you can keep your coins. While some storage facilities accept bullion bars and others require that you purchase individual coins, others will allow you to store your coins in their own safe. You'll have to weigh the pros of each option before you make a decision.
Bullion bars require less space, as they don't contain individual coins. But, each coin must be counted separately. However, individual coins can be stored to make it easy to track their value.
Some prefer to store their coins in a vault. Others prefer to store their coins in a vault. Whichever method you choose, make sure you store your bullion safely so you can enjoy its benefits for years to come.
Should You Get Gold?
Gold was considered a safety net for investors during times of economic turmoil in the past. Many people are now turning their backs on traditional investments like stocks and bonds, and instead look to precious metals like Gold.
Gold prices have been on an upward trend over recent years, but they remain relatively low compared to other commodities such as oil and silver.
Experts believe this could change soon. Experts predict that gold prices will rise sharply in the wake of another global financial collapse.
They also note that gold is increasingly popular because of its perceived intrinsic value and potential return.
Here are some things to consider if you're considering investing in gold.
- Consider first whether you will need the money to save for retirement. It's possible to save for retirement without putting your savings into gold. However, when you retire at age 65, gold can provide additional protection.
- Second, make sure you understand what you're getting yourself into before you start buying gold.There are several different types of gold IRA accounts available. Each type offers varying levels and levels of security.
- Remember that gold is not as safe as a bank account. Losing your gold coins could result in you never being able to retrieve them.
So, if you're thinking about buying gold, make sure you do your research first. And if you already own gold, ensure you're doing everything possible to protect it.
Statistics
- 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)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (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
law.cornell.edu
- 7 U.S. Code SS7 – Designation boards of trade as contract market authorities
- 26 U.S. Code SS 408 – Individual retirement account
investopedia.com
- Do You Need a Gold IRA to Get Retirement?
- What are the Options Types, Spreads. Example. And Risk Metrics
bbb.org
irs.gov
How To
Investing with gold or stocks
Investing in gold as an investment vehicle might seem like a very risky proposition these days. This is because many people believe that gold investment is no longer profitable. This belief stems from the fact that most people see gold prices being driven down by the global economy. They think that they would lose money if they invested in gold. In reality, however, there are still significant benefits that you can get when investing in gold. Here are some examples.
One of the oldest forms known of currency is gold. It has been used for thousands of years. It has been used as a store for value by people all over the globe. As a means of payment, South Africa and many other countries still rely on it.
The first point to consider when deciding whether or not you should invest in gold is what price you want to pay per gram. You must determine how much gold bullion you can afford per gram before you consider buying it. If you don’t know what the current market price is, you can always call a local jewelry store and ask them their opinion.
It is also worth noting that although gold prices have declined recently, the cost of producing gold has increased. So, although gold prices have declined in recent years, the cost of producing it has not changed.
Another thing to remember when thinking about whether or not you should buy gold is the amount of gold you plan on purchasing. It is sensible to avoid buying gold if you are only looking to cover the wedding rings. However, if you are planning on doing so for long-term investments, then it is worth considering. Profitable gold can be sold at a lower price than it was when you bought it.
We hope this article has given you an improved understanding of gold investment tools. We recommend that you investigate all options before making any major decisions. Only after you have done this can you make an informed choice.
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By: Jamie Redman
Title: Bitcoin Reaches $49K High Before Dropping, as ETFs Record $2.3B in Trades by Mid-Day
Sourced From: news.bitcoin.com/record-2-3b-in-bitcoin-etf-trades-as-btc-rockets-to-49k-then-plummets-below-46k/
Published Date: Thu, 11 Jan 2024 19:00:36 +0000
