Bitcoin to hit $500K?

and estate taxes

Morning Download 

Personal finance + economics + markets


Good morning, investors! Yesterday was an interesting day for the market with small stocks growing and big names taking a hit.

Fun fact: Occidental Petroleum Corp. was the best performing stock in 2022 growing 119.1% in the previous year.

Today we cover:

  • December starts on a bad note for stocks.

  • Bitcoin to hit $500,000?

  • A look at estate taxes.

Follow us on Twitter for more.

🔈 Audio version: Apple Podcasts | Spotify | YouTube

📊 Economy and News 

A look at the economy

Swiss bank Banque Pictet has admitted to helping US taxpayers hide more than $5.6 billion from the IRS. It has now entered into a deferred prosecution agreement with the Justice Department.

Should the bank adhere to the conditions outlined in its agreement with the Justice Department, the prosecution will be deferred for a period of three years, after which the charge of criminal conspiracy to defraud the IRS will be dismissed.

In other news, things aren't looking good for China. Moody’s has downgraded its outlook on China’s government credit ratings to negative from stable.

Moody’s expects Beijing’s support and possible bailouts for distressed local governments and state-owned enterprises to diminish China’s fiscal, economic and institutional strength.

The ratings agency, however, retained China’s “A1” long-term rating on the country’s sovereign bonds.

Furthermore, U.S. Treasury yields declined Tuesday as investors seem more interested in jobs data that’ll help understand the economy better.

Global hits:

📈 Stocks

S&P 500 4,569.78 (-0.54%)
DJIA 36,204.44 (-0.11%)
NASDAQ 15,839.67 (-0.99%)
BRENT CRUDE 78.36 (+0.42%)
* Prices as of Dec 5th, 12:20 AM UTC

All major indexes fell to start the week

Faith in stocks appears to be dwindling as investors questioned if the market was getting ahead of itself after recording five straight winning weeks.

All major indexes fell with the tech suffering the most. Technology shares struggled in the session. Nvidia slid more than 2%, while Microsoft and Meta each lost more than 1%. Nvidia and Nvidia have lost 6% each in a week.

Money appears to be flowing from stocks to cryptocurrencies and gold. Bitcoin passed the $41,000 mark to notch an 18-month high, while gold reached its highest nominal intraday level ever. Gold and crypto-related stocks also jumped with Coinbase gaining 6% and Marathon Digital rising 8%.

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🔐 Crypto

Bitcoin $41,667. (-0.78%)
Ethereum $2,204 (-1.47%)
Total market cap $1.53T (-1.80%)
* Prices as of Dec 5th, 12:20 AM UTC

Bloomberg expects Bitcoin to hit $500,000

Bitcoin is trading at an 18-month high, above $41,000 and now experts are predicting this bull run to continue with many giving it a $500,000 target

Bitcoin has gained more than 150% this year. Market-watchers are eagerly anticipating the approval of a BTC ETF in the US, which could attract more investments into the space.

We have already seen a rise in crypto investment products. Furthermore, daily spot-trading volumes have also increased. But, this isn’t the first time this is happening.

Bitcoin has experienced similar hype cycles in the past, most notably in 2021 when it hit an all-time high of approximately $69,000. But, it couldn’t sustain the price and the currency declined 64% in 2022 following a 60% gain in 2021.

While the potential approval of a BTC ETF and the anticipation of interest rate cuts have fueled speculative frenzy, skepticism remains. 

Michael O’Rourke, the chief market strategist at JonesTrading, called the currency speculative suggesting that a large chunk of investors will stay away from it.

Experts might be expecting BTC to hit the $500K mark but our subscribers aren't that positive. Yesterday, we asked our subscribers if they see BTC crossing $100,000 in 2024 and 44.68% said 'No'. Only 34% expect it to reach $100K next year, and about 21% say they 'don't care'.

💵 Personal Finance

A look at the estate tax

Estate tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death.”

Estate tax can be high but it isn’t very common because few people pay it.

Meant for the rich, this tax is applicable only in these states:

  • Connecticut

  • Hawaii

  • District of Columbia

  • Illinois

  • Massachusetts

  • Maryland

  • Maine

  • New York

  • Minnesota

  • Oregon

  • Rhode Island

  • Washington State

  • Vermont

Nonresidents can owe estate taxes. If you live in a state with no estate or inheritance tax but own property in a state that has one, you can still be on the hook for taxes.

We talked about estate taxes in detail in our PRO newsletter, which can be accessed for free (if you’re a new user).

The estate exceeding the 2023 limit of $12.92 million is subject to the top federal statutory estate tax rate of 40%. However, it is possible to reduce this rate by demonstrating eligible deductions.

You will find some amazing tips, including legal and reliable ways to reduce estate taxes, and more in the Pro issue, so join today. Being a member will give you access to all our previous issues as well.

💰 Be a Better Investor

"It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong."

George Soros

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👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.