Goldman Sachs on Spot Bitcoin ETF Hype
Global investment bank Goldman Sachs has advised investors against anticipating a sudden and immediate surge in the price of bitcoin upon the approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC). Nonetheless, Goldman Sachs highlighted that the "ability to actually transact a product that people are familiar with and can provide scale" is "very positive."
Don't Expect Immediate BTC Spike
According to Mathew McDermott, head of the digital asset unit at Goldman Sachs, the investment bank does not anticipate an immediate surge in BTC prices following the approval of spot bitcoin exchange-traded funds (ETFs) by the SEC. McDermott told Reuters that while he does not expect the approval of the ETF to trigger a "sudden immediate spike in liquidity and price," it could attract new institutional investors to the asset class. He believes that the ability to transact a familiar product at scale is a positive development.
Institutional Interest and Crypto Derivatives Trading
Goldman Sachs offers cryptocurrency derivatives trading for institutional clients through its FX desk. McDermott mentioned that the bank has observed growing client interest in crypto derivatives trading, driven by market expectations for the imminent approval of spot bitcoin ETF applications by the SEC. Despite the market still being relatively small, McDermott stated that there has been an increase in interest as the market gets more excited about the potential of a bitcoin ETF.
Beyond Cryptocurrency: Exploring Digital Assets
McDermott shared that he is focused on developing digital assets beyond cryptocurrency. This includes exploring the issuance of blockchain-based tokens representing traditional assets like bonds. He noted a "huge appetite" for digital assets, which has grown significantly in the last 12 months. Leveraging blockchain technology could enhance operational and settlement efficiencies, as well as contribute to the de-risking of financial markets, according to McDermott.
The Future of Blockchain in Financial Markets
While McDermott believes that there will be a significant uptick in quantum trading on-chain within the next one to two years, he thinks that fully replicating the majority of financial markets exclusively on blockchain is a distant prospect. He anticipates that it will take three to five years to see these marketplaces at scale.
Goldman Sachs does not expect an immediate spike in BTC prices upon the approval of spot bitcoin ETFs. However, the ability to transact a familiar product at scale is seen as a positive development. The bank has observed growing interest in crypto derivatives trading and is exploring the issuance of blockchain-based tokens representing traditional assets. While the future of blockchain in financial markets is promising, fully replicating financial markets exclusively on blockchain is still a distant prospect.
Frequently Asked Questions
What Precious Metals Can You Invest in for Retirement?
First, you need to understand what you have and where you are spending your money. Start by listing everything you have. This should include all stocks, bonds, mutual fund, certificates of deposits (CDs), insurance policies, life insurance policies and annuities. Add all these items together to calculate how much money you have for investment.
If you are between 59 and 59 1/2 years, you might consider opening a Roth IRA. A traditional IRA allows you to deduct contributions from your taxable income, while a Roth IRA doesn't. But, future earnings won't allow you to take tax deductions.
If you decide you need more money, you will likely need to open another investment account. Start with a regular broker account.
How much of your IRA should include precious metals?
Protect yourself from inflation by investing in precious metallics like silver and gold. It's more than just an investment in retirement. It also prepares you for any economic downturn.
While silver and gold have seen significant increases in the last few years, they are still safe investments since they don’t fluctuate as often as stocks. Plus, there's always a demand for these materials.
Gold and silver prices are usually stable and predictable. They increase with economic growth and decrease in recessions. This makes them great money-savers and long-term investments.
10% of your total portfolio should be invested in precious metals. That percentage could go higher if you want to diversify your portfolio further.
Can you keep precious metals inside an IRA
The answer depends on whether or not the IRA owner is looking to diversify his holdings in gold and silver, or to keep them for safekeeping.
He has two options if he wishes to diversify. He could buy physical bars of gold and/or silver from a dealer or sell these items back to the dealer at the end of the year. However, suppose he isn't interested in selling back his precious metal investments. He could keep the precious metals as long as he wants to.
- The IRS also allows American Eagle coins, even though they do not meet gold's 99.5% purity standard. (forbes.com)
- You can only purchase gold bars of at least 99.5% purity. (forbes.com)
- To qualify as IRA allowable precious metals and be accepted by STRATA, the following minimum fineness requirements must be met: Gold must be 99.5% pure, silver must be 99.9% pure, and platinum and palladium must both be 99.95% pure. (stratatrust.com)
- The maximum yearly contribution to an individual's IRAs is currently $6,000 ($7,000 for those 50 years or older), or 100% of earned income, whichever is less. (monex.com)
How to decide if a Gold IRA is right for you
Individual Retirement accounts (IRAs) are the most common type of retirement account. Individual Retirement Accounts (IRAs) are available through financial planners, banks, mutual funds and employers. Individuals can contribute as much as $5,000 per year without any tax consequences. This amount can be deposited into any IRA, regardless your age. There are limits to how much money you may put into certain IRAs. For example, if your age is less than 591/2 years old, you can't contribute to a Roth IRA. Contributions must be made by those under 50 years old. Some employees may be eligible to match contributions from their employer.
There are two main types of IRAs: Traditional and Roth. The traditional IRA allows you the opportunity to invest in stocks and bonds as well as other investments. However, the Roth IRA only allows you to invest after-tax dollars. Roth IRA contributions are not subject to tax when they are made, but Roth IRA withdrawals are. Some people choose to use a combination of these two accounts. Each type is different. There are pros and con's to each. What should you look at before deciding which type is best for you? Here are three things to keep in mind:
Traditional IRA Pros
- Companies have different options when it comes to contribution options
- Employer match possible
- Save more than $5,000 per Person
- Gain tax-deferred until withdrawal
- Limitations may apply based on income levels
- Maximum annual contribution is $5,500 ($6,500 for married couples filing jointly).
- Minimum investment is $1,000
- You must start receiving mandatory distributions after age 70 1/2
- To open an IRA, you must be at least 5 years old
- You cannot transfer assets between IRAs
Roth IRA pros:
- Contributions are exempt from taxes
- Earnings increase without tax
- Minimum distribution not required
- The only options for investing are stocks, bonds, or mutual funds
- There is no maximum contribution limit
- There are no limitations on the ability to transfer assets between IRAs
- An IRA can only be opened by those 55 and older
Considering opening a new IRA, it's essential to know that not all companies offer the same IRAs. Some companies provide the choice of a Roth IRA as well as a traditional IRA. Others offer the possibility to combine them. There are different requirements for different types. For example, a Roth IRA has no minimum investment requirement, whereas a traditional IRA requires a minimum investment of just $1,000.
The bottom line
When you are choosing an IRA, it is crucial to consider whether you will pay taxes now or in the future. If you are retiring within ten year, a traditional IRA could be the right option. A Roth IRA may be a better choice for you. In either case, it's a smart idea to speak with a professional about your retirement plans. You need someone who knows what's happening in the market and can recommend the best options for your situation.
By: Kevin Helms
Title: Goldman Sachs: Don’t Expect Immediate BTC Spike After Spot Bitcoin ETF Approvals
Sourced From: news.bitcoin.com/goldman-sachs-dont-expect-immediate-btc-spike-after-spot-bitcoin-etf-approvals/
Published Date: Sun, 17 Dec 2023 05:00:13 +0000