Crypto markets trade flat in the first week after ETF approvals; GBTC sees major outflows

Hola folks!

Hope you all had a great weekend. The past week witnessed volatility across markets. While BTC ETF euphoria has been waning, the crypto market is losing steam and appears to be in the consolidation phase. Now, all eyes are set on BTC halving, which is scheduled to happen sometime in April 2024. 

The Indian stock market had an adrenaline-filled week with market benchmarks hitting a new high at the start of the week, only to be pulled down by HDFC bank’s lower-than-expected Q3 results later in the week. Additionally, the market had six trading days in the past week, giving it more room for volatility. Elsewhere, America’s S&P 500 index closed at an all-time high on Friday, powered by the large tech stocks rally. Overall, it was an eventful week. 

We bring to you a compact read centered around crypto market updates, investment ideas, an insightful book recommendation, and a fun-filled crypto crossword to help you beat the Monday blues. 

While starting an SIP or investing a lumpsum amount in a mutual fund, have you been confused between Direct AMC investment or Regular mutual fund investment options? 

Not to worry, we have you covered. Click on the link below to watch our video on Direct vs. Regular mutual fund investment. The video digs deep into the pros and cons of both modes of investment. Understanding the nuances of these options is essential for optimizing your portfolio.

Talks about retirement planning are great, but you need numbers to make a concrete retirement plan. Read the segment below to see how the numbers stack up when planning your retirement and how much you need to save every month to retire in your mid-50s or 60s. 

Portfolio Building in your 20s and 30s - Part 9

Retirement planning is a must. You can start saving for your retirement as early as your 20s or 30s so that you can have a comfortable corpus to live on when you retire in your 50s or 60s. 

Last week, we asked you to work on your retirement corpus and you might have received a corpus amount upwards of Rs. 2 crore. This might seem huge and impossible to achieve, but one thing you miss is that you have the luxury of time. You are starting your retirement planning journey early and thus compounding will work in your favor. 

Let’s see how much money you need to invest per month to get Rs. 2 crore when you retire at the age of 60. 

Before we give you the number, what would be your guess, assuming you are 28 years old right now? Rs, 10,000 or maybe Rs. 15,000? Let’s see how close your guess is to the actual number. 

Here is the magic number. 

You need to invest just Rs. 1750 at a 12% rate of return with an annual 10% set-up, for 32 years (given that you are 28 years old today and wish to retire at 60 years), and you will have Rs. ₹2,05,00,763 on your retirement. 

What if you are already 35 years old and wish to retire at 55 years with Rs. 5 crore corpus, how much will you have to invest every month? 

In this case, since the corpus amount is large and the retirement age is near, you will need to invest  Rs. 25,500 per month at a 12% rate of return with an annual 10% set-up, for 20 years (given that you are 35 years old today and wish to retire at 55 years), and you will have Rs. ₹5,07,16,224 on your retirement. 

These are just sample scenarios to show that no retirement corpus amount is too big if you start at the earliest and be disciplined about your savings and investment goals. 

Compounding is magical. If you are starting young, you can afford to take risks with your investment choices and thus, you can allocate a part of your retirement savings to Equity and Mutual funds. If you are a salaried employee, the risk you take with equity and mutual fund investments will be set off by your provident fund as it is one of the safest options available in India. 

Use an online Step-up SIP calculator to know the amount you need to invest every month to reach your retirement corpus goal. 

Next week, we will explain how you can use insurance to help you achieve your savings goals and safeguard your dependents in case of an extreme event. 

Crypto markets traded in a very narrow range in the first week after the approval of the 11 spot bitcoin ETFs. Excluding GBTC, a total of 95,297 BTC was accumulated in the first week itself, according to Bloomberg. GBTC, however, saw an outflow of $2.8 billion so far. The total trading volumes of all 11 ETF instruments hit $11 billion. 

Interestingly, the Bitcoin ETFs recorded a daily volume of $1.8 billion on January 16th alone, which is more than three times the combined trading volume of all 500 ETFs launched in 2023. This performance is in line with the hype crypto traders were expecting with the launch of Bitcoin Spot ETFs. 

Price-wise, Bitcoin, albeit weak, failed to fall below the 40k USD mark throughout the entire week, although it tested these levels multiple times. On the upside, $43.5k now remains a level to break for bulls to catch the party again.

With every slight lower move of BTC however, altcoins have been bleeding as the ETH/BTC pair too failed to hold above the 0.06 Bitcoin per Ethereum mark. With a lot of popular altcoins like Arbitrum currently trading on trend line support and need to hold for us to see more upside, Monday US hours would be very crucial to see which way the market will take this week.

• BTC $40,900 ⏬4.12%

• ETH $2,410 ⏬ 4.23%

• ARB $1.76 ⏬ 15.60%

(All data here is as of 2.50 p.m., 22 January 2024)

Before we conclude, here’s a quick look at some important news from around the crypto world.

• Bitcoin has surpassed silver in the US ETF market. Following the recent SEC approval, Bitcoin ETFs outpaced silver ETFs in assets, second only to gold among commodity-focused US ETFs. The conversion of the Grayscale Bitcoin Trust into an ETF immediately resulted in $30 billion in Bitcoin ETF assets, compared to silver ETFs with about $11 billion. Read more here.

• Ethereum’s much-awaited Dencun upgrade went live on the Goerli testnet early on Jan. 17, but failed to finalize in the expected time. The upgrade was pushed at 6.32 UTC, blockchain data shows, but did not reach consensus and was not finalized on the testnet. Read more here.  

How Much Money Do I Need to Retire?

By: Todd Tresidder

Retirement planning is essential, especially with rising life expectancy and increasing cost of living. This gem of a book talks about Retirement Planning in simple, lucid language while challenging the normative retirement process. 

The conventional retirement planning process is flawed and can lead to you to underspend and be miserable or overspend and run out of money. Both these scenarios aren’t favorable for an individual. 

Read the book to get a step-by-step, easy-to-understand plan to calculate your retirement needs with confidence.

Before you get on with your day, don’t forget to flex those brain muscles with our weekly crypto crossword.

That’s it for now. Thanks for sticking around.

See you later, folks! 👋

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