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CoinNews

Bitcoin holds steady against economic headwinds, outshining Ethereum

by CoinNews
written by CoinNews

Quick Take

In the midst of economic uncertainty, Bitcoin continues to dance around the crucial $70,000 level, demonstrating its resilience despite the DXY index steadily climbing towards 106 and US yields on the rise. As investors seek safe-haven assets, many are looking to gold for guidance, hoping that Bitcoin, often referred to as “digital gold,” will follow suit.

Bitcoin Dominance: (Source: TradingView)
Bitcoin Dominance: (Source: TradingView)

Despite a slight dip at the beginning of April, Bitcoin’s dominance in the digital asset market remains strong, currently at 54.6%, just below the cycle highs of 55.2%. This growth in dominance, up 6% year-to-date, indicates that investors, on aggregate, are favoring Bitcoin over other digital assets.

Another noteworthy trend is the ETH/BTC ratio, which remains below the critical 0.05 threshold, suggesting that Bitcoin is outperforming Ethereum. The ETH/BTC ratio has declined by 6% year-to-date and 20% over the past year. As the DXY index continues to surge, market observers are keeping a close eye on Bitcoin and gold, anticipating that they may continue to hold their ground or even follow the upward trend, providing a potential hedge against economic instability.

ETHBTC: (Source: TradingView)
ETHBTC: (Source: TradingView)

The post Bitcoin holds steady against economic headwinds, outshining Ethereum appeared first on CryptoSlate.

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CoinNews

XRP Price Holds Support – Indicators Show Risk of Downside Break

by CoinNews
written by CoinNews

XRP price is holding gains above the $0.60 zone. The price could gain bearish momentum if there is a close below the $0.570 support zone.

  • XRP is facing a major hurdle near the $0.6580 zone.
  • The price is now trading below $0.640 and the 100 simple moving average (4 hours).
  • There is a key bearish trend line forming with resistance near $0.640 on the 4-hour chart of the XRP/USD pair (data source from Kraken).
  • The pair could gain bearish momentum if there is a close below the $0.5720 support.

XRP Price Faces Uphill Task

After a steady decline, XRP price found support near the $0.5720 level. A low was formed at $0.5714 and the price started a fresh increase, like Bitcoin and Ethereum.

There was a move above the $0.5880 and $0.600 resistance levels. The price cleared the 23.6% Fib retracement level of the downward wave from the $0.7442 swing high to the $0.5714 low. The bulls pushed the price above the $0.620 resistance zone, but the bears are active near $0.640.

Ripple’s token price is now trading above $0.6320 and the 100 simple moving average (4 hours). On the upside, immediate resistance is near the $0.640 zone. There is also a key bearish trend line forming with resistance near $0.640 on the 4-hour chart of the XRP/USD pair.

XRP Price

The next key resistance is near $0.6580. It is close to the 50% Fib retracement level of the downward wave from the $0.7442 swing high to the $0.5714 low. A close above the $0.6580 resistance zone could spark a strong increase. The next key resistance is near $0.700. If the bulls remain in action above the $0.700 resistance level, there could be a rally toward the $0.7440 resistance. Any more gains might send the price toward the $0.800 resistance.

More Losses?

If XRP fails to clear the $0.640 resistance zone, it could start another decline. Initial support on the downside is near the $0.600 zone.

The next major support is at $0.5720. If there is a downside break and a close below the $0.5720 level, the price might accelerate lower. In the stated case, the price could retest the $0.5250 support zone.

Technical Indicators

4-Hours MACD – The MACD for XRP/USD is now losing pace in the bullish zone.

4-Hours RSI (Relative Strength Index) – The RSI for XRP/USD is now above the 50 level.

Major Support Levels – $0.600, $0.5720, and $0.5250.

Major Resistance Levels – $0.640, $0.6580, and $0.700.

Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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CoinNews

FLR and UNI Spearhead This Week’s Crypto Gains as Token Economy Holds Above $2 Trillion

by CoinNews
written by CoinNews

FLR and UNI Spearhead This Week's Crypto Gains as Token Economy Holds Above $2 TrillionIn the last week, 23 cryptocurrencies experienced notable gains against the U.S. dollar, with flare (FLR) and uniswap (UNI) leading the charge. Concurrently, dymension (DYM) and helium (HNT) saw significant declines over the same period. FLR and UNI Lead Gains in a Diverse Week for Cryptos, Despite DYM and HNT Setbacks As of now, the […]

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Finance

Amazon’s stock could lose to Walgreens’ this year if the Dow jinx holds

by CoinNews
written by CoinNews

The keepers of the Dow Jones Industrial Average have been very good at making sure the changes they make to the venerable stock-market barometer are seamless to investors, but nobody’s perfect.

How the 128-year old index
DJIA
is constructed is a secret closely guarded by S&P Dow Jones Indices. But some things, such as the influence each stock has, are known once changes are made.

There’s also the matter of the “Dow jinx,” which has seen new members tend to underperform the members they replaced.

The Dow is different than other market trackers, because the price is determined by dollar-amount changes in the components’ stocks. So stocks with higher prices — not companies with larger market capitalizations like those in the S&P 500 index
SPX
and the Nasdaq Composite Index
COMP
— have greater influence on the index’s price.

Rather than a weighting based on market cap, there is a “divisor,” or a number that a Dow stock’s price change is divided by to determine what effect that stock’s move has on the Dow.

As of Friday, that divisor was 0.15172752595384. That means that each $1 change in any of the Dow stocks moved the Dow’s price by 6.59 points.

On Monday, Walmart Inc.’s
WMT,
+0.09%
stock split will lower its price by two-thirds. And as of Friday’s close, the price of incoming Amazon.com Inc.’s stock
AMZN,
+0.23%
was roughly eight times the price of outgoing Walgreens Boots Alliance Inc.’s
WBA,
+0.74%.

Also read: Why you can count on the Dow making changes in February

With those changes, the divisor increases slightly to 0.15265312230608, meaning the price changes of all the other Dow stocks will have a little less influence on the Dow’s price. For each $1 change, the Dow will now move by 6.55 points.

At Monday’s open, Amazon will be the third-largest company in the Dow by market cap, but will rank 17th out of 30 by price. A 1% change in Amazon’s stock would move the Dow by 11.5 points. But a 1% move in the Dow’s highest-priced stock, UnitedHealth Group Inc.’s
UNH,
+0.14%,
which has about a quarter of Amazon’s market cap, would move the Dow by about 35.5 points.

The Dow keepers said the idea behind Monday’s change was to increase exposure to consumer retail, as well as other business areas. In effect, the keepers swapped a stock with a negative correlation to the market with one with a relatively high correlation.

For the past two years, the correlation coefficient between Walgreens’ stock and the Dow was negative 0.45, and between the stock and the S&P 500 it was negative 0.51.

Meanwhile, the correlation of Amazon’s stock with the Dow was 0.60 and with the S&P 500 it was 0.82.

S&P Dow Jones Indices also made a change to the Dow Jones Transportation Average
DJT,
by adding Uber Technologies Inc.’s stock
UBER,
+0.22%
while removing JetBlue Airways Corp.’s stock
JBLU,
-1.99%.
Given that Friday’s closing price for Uber’s stock was about 12 times that of JetBlue’s, the Dow transports’ divisor increased to about 0.1673077 from 0.1627986.

Keep in mind that the Dow keepers aren’t trying to pick winners. Their mission is to match the market. And they’ve been pretty great at it over the long term. The Dow’s correlation with the S&P 500 was 0.93 over the past two years and was 0.99 over the past 10 years.

But for some unknown reason, a quirk of Dow changes has been that the performance of stocks that enter often get beat over the short term by those that leave.

It might seem inconceivable to some that Walgreens’ stock would outperform Amazon’s, which is one of the so-called Magnificent Seven group of tech stocks, but surely many thought the same when Apple Inc.’s
AAPL,
-1.00%
stock replaced AT&T Inc.’s
T,
+1.27%.

In the year before Apple entered the Dow on March 19, 2015, the technology giant’s stock soared 71%, while telecom stalwart AT&T’s stock gained just 3.4%.

One year after the stocks were swapped, Apple’s had dropped by about 18% and AT&T’s had run up 16%.

Don’t miss: Buffett saved $460 million by waiting to swap AT&T for Apple

Meanwhile, over the past year, Amazon’s stock soared about 83%, while Walgreens shares plunged 40%.

Also read: R.I.P. the ‘Magnificent Seven,’ says analyst who coined the big-tech moniker. Here’s why.

Here’s how the stocks that entered the Dow and the stocks they replaced performed in the year after the last changes were made, on Aug. 31, 2020:

  • Salesforce Inc.’s stock
    CRM,
    -0.29%
    fell 2.2% in the year after it entered the Dow, while the stock it replaced, Exxon Mobil Corp.’s
    XOM,
    -0.88%,
    soared 34%.

  • Shares of Amgen Inc.
    AMGN,
    +1.40%
    were down 11% a year after going in, while Pfizer Inc. shares
    PFE,
    +0.76%
    were up 28% a year after getting booted.

  • The jinx didn’t always hold, however, as Honeywell International Inc. shares
    HON,
    -0.09%
    rose 38% in the year after entering the Dow, while RTX Corp.’s stock
    RTX,
    +0.54%
    climbed 36% in the year after exiting.

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Finance

Here Are All 45 Stocks Warren Buffett Holds for Berkshire Hathaway’s $371 Billion Portfolio

by CoinNews
written by CoinNews

Last week marked one of the most important days of the first quarter for the investing community. Feb. 14 was the deadline for institutional investors with at least $100 million in assets under management to file Form 13F with the Securities and Exchange Commission (SEC).

Put simply, a 13F provides professional and everyday investors alike with an under-the-hood look at what Wall Street’s smartest and most successful money managers bought and sold in the latest quarter (in this instance, the quarter ended Dec. 31, 2023). Despite their drawbacks, 13Fs can clue investors in to the stocks, industries, and trends that Wall Street’s top money managers are focused on.

Warren Buffett at Berkshire Hathaway's annual shareholder meeting.

Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.

Though many 13Fs are filed with the SEC in a matter of days, no 13F tends to be more anticipated than that of Warren Buffett with Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B). That’s because the “Oracle of Omaha” has delivered north of a 4,800,000% aggregate return in his company’s Class A shares (BRK.A) since he took over as CEO in the mid-1960s. Clearly, he’s doing something right, and people are eager to follow in his footsteps by mirroring his investments.

Based on Berkshire’s latest 13F, Warren Buffett and his team entered 2024 overseeing 45 stocks in their roughly $371 billion portfolio. Mind you, I’m excluding the two index funds owned by Berkshire Hathaway — the Vanguard S&P 500 ETF and SPDR S&P 500 ETF Trust — because index funds represent baskets of securities and aren’t themselves stocks.

Here’s a detailed breakdown of Buffett’s investment portfolio for Berkshire Hathaway entering 2024.

Warren Buffett’s core investments

If there’s a defining characteristic of Berkshire Hathaway’s investment portfolio, it’s that it’s heavily concentrated in a few top investment ideas. Both Buffett and the late, great Charlie Munger long believed that diversification is only necessary if you don’t know what you’re doing. A nearly 20% annualized return for Berkshire’s stock over close to six decades suggests the Oracle of Omaha knows a thing or two about investing.

The following eight core investments comprised more than 84% of Berkshire’s $370.6 billion of invested assets, as of the closing bell on Feb. 16, 2024:

  1. Apple (NASDAQ: AAPL): $167,564,822,400 in market value

  2. Bank of America: $35,209,924,885

  3. American Express (NYSE: AXP): $32,226,370,392

  4. Coca-Cola (NYSE: KO): $23,756,000,000

  5. Chevron (NYSE: CVX): $18,989,654,896

  6. Occidental Petroleum (NYSE: OXY): $15,010,057,107

  7. Kraft Heinz: $11,335,348,015

  8. Moody’s: $9,146,566,891

If there’s one common theme among Warren Buffett’s core investments, it’s strong brand recognition. Tech stock Apple, which accounts for more than 45% of Berkshire’s invested assets, is consistently the most valuable brand in surveys and is the leader in U.S. smartphone market share. Meanwhile, Kantar’s annual “Brand Footprint” report notes that Coca-Cola has been the most chosen brand by consumers every year for a decade (as of 2022). Familiar brands with sustained competitive advantages tend to produce predictable operating results — and that’s something Buffett absolutely loves.

Many of these core investments are also longtime holdings. Coca-Cola, American Express, and Moody’s have been continuous holdings in Berkshire’s portfolio since 1988, 1991, and 2000, respectively. Buffett and his investing aides understand that the U.S. and global economy tend to grow over long periods, and have positioned their company’s portfolio to take advantage of this expansion. Companies like American Express should enjoy higher fee collection and interest income from lending, as well as higher fee revenue from merchants, as transactional volume increases over time.

Interestingly, Buffett’s core investment thesis also involves energy stocks. Energy has never been a huge focus for the Oracle of Omaha or his team, but Chevron and Occidental Petroleum currently combine for about $34 billion of invested assets. This is a crystal-clear indication that Berkshire’s brightest minds expect the spot price for crude oil to remain elevated.

Although Chevron is a highly diversified integrated energy company, and therefore isn’t as sensitive to spot-price movements in crude oil, Occidental’s revenue stream is highly skewed toward drilling. A higher spot price for crude would definitely help the latter far more.

The other billion-dollar bets at Berkshire Hathaway

Although the aforementioned eight core investments make up more than 84% of Berkshire Hathaway’s close to $371 billion investment portfolio, there are still 20 additional holdings that tally at least $1 billion in market value (as of Feb. 16):

  1. Mitsubishi: $7,271,277,217

  2. Itochu: $5,222,432,191

  3. Mitsui: $5,215,608,560

  4. DaVita: $4,411,600,565

  5. Citigroup (NYSE: C): $3,030,177,115

  6. VeriSign: $2,489,304,669

  7. Kroger: $2,382,000,000

  8. Sumitomo: $2,372,187,302

  9. Visa (NYSE: V): $2,311,340,458

  10. Marubeni: $2,266,233,990

  11. BYD: $2,134,256,139

  12. Mastercard (NYSE: MA): $1,866,269,528

  13. Capital One Financial: $1,711,399,447

  14. Amazon: $1,695,000,000

  15. Liberty Sirius XM Series C: $1,455,469,155

  16. Snowflake: $1,410,735,347

  17. Aon: $1,276,084,000

  18. Charter Communications: $1,121,879,713

  19. Nu Holdings: $1,109,750,602

  20. Ally Financial: $1,043,420,000

The big theme of this mid-tier group of holdings which could, in theory, grow into core holdings for Buffett and his team, is valuation. The Oracle of Omaha is a stickler for a good deal, and this group of companies (mostly) demonstrates that.

For instance, the five Japanese trading houses Buffett and his team have been piling into (Mitsubishi, Itochu, Mitsui, Sumitomo, and Marubeni) trade at single-digit price-to-earnings multiples. If a broad-reaching business sustains its competitive advantages, trades at a single-digit earnings multiple, and offers a market-topping dividend yield, there’s a good chance it’s going to intrigue Warren Buffett.

You’ll also note that Berkshire’s top investment minds gravitate to financial stocks. Sizable bets have been placed on industry leaders like Visa, Mastercard, and Citigroup. The reason financial stocks are well-liked by Buffett is because they’re cyclical. In other words, they ebb and flow with the health of the U.S. economy.

As an example, Visa and Mastercard are the respective No. 1 and No. 2 in credit card network purchase volume in the United States. Meanwhile, Citigroup is one of the largest banks by total assets. If the U.S. economy continues to expand over time, fee collection from merchants should climb for Visa and Mastercard, while interest income can power Citigroup higher.

Hand holding magnifying glass above paperwork displaying stock charts and volume data.

Image source: Getty Images.

The Oracle of Omaha’s smaller holdings

Last but not least, there are 17 holdings in Warren Buffett’s approximately $371 billion portfolio that range in market value from a low of $8.6 million to as much as $840.9 million:

  1. T-Mobile: $840,869,220

  2. Paramount Global (NASDAQ: PARA): $823,192,383

  3. Liberty Sirius XM Series A: $717,186,367

  4. HP (NYSE: HPQ): $653,130,595

  5. Liberty Formula One Series C: $534,239,160

  6. Floor & Décor Holdings: $530,293,200

  7. Louisiana-Pacific: $482,858,063

  8. Liberty Live Series C: $418,362,732

  9. Sirius XM Holdings (NASDAQ: SIRI): $191,959,387

  10. Liberty Live Series A: $181,414,375

  11. NVR: $181,414,375

  12. Lennar Class B: $82,124,903

  13. Diageo: $33,456,475

  14. Jefferies Financial Group: $17,827,905

  15. Liberty Latin America Series A: $17,494,767

  16. Atlanta Braves Holdings Series C: $8,979,347

  17. Liberty Latin America Series C: $8,628,614

This bottom rung of the ladder in Berkshire’s portfolio is typically reserved for smaller investments made by Buffett’s top “lieutenants,” Todd Combs and Ted Weschler, as well as companies that may be falling out of favor.

For example, Buffett and his team sold a substantial percentage of their respective stakes in HP and Paramount Global during the fourth quarter. The recovery in personal-computing sales is taking longer than anticipated for HP. Meanwhile, Paramount Global is mired under a mountain of debt and contending with weaker ad sales and increased streaming competition.

When Berkshire’s top investors decide that it’s time for a holding to get the heave-ho, they aren’t shy about it. Don’t be surprised if HP and/or Paramount Global aren’t holdings for much longer.

However, these smaller holdings in Berkshire’s investment portfolio can still be gems. Satellite-radio operator Sirius XM Holdings is a perfect example. It’s a legal monopoly that enjoys exceptionally strong pricing power with its subscribers. Since it generates more than three-quarters of its revenue from subscriptions, it’s better positioned to navigate normal downturns in the U.S. economy than traditional radio operators that are heavily reliant on advertising for the bulk of their revenue.

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Citigroup, Ally, American Express, and Bank of America are advertising partners of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Sean Williams has positions in Amazon, Bank of America, Mastercard, Sirius XM, and Visa. The Motley Fool has positions in and recommends Amazon, Apple, BYD, Bank of America, Berkshire Hathaway, Chevron, HP, Jefferies Financial Group, Lennar, Mastercard, Moody’s, NVR, Snowflake, Vanguard S&P 500 ETF, VeriSign, and Visa. The Motley Fool recommends Diageo Plc, Kraft Heinz, Kroger, Nu, Occidental Petroleum, and T-Mobile US and recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.

Here Are All 45 Stocks Warren Buffett Holds for Berkshire Hathaway’s $371 Billion Portfolio was originally published by The Motley Fool

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CoinNews

Bitcoin Sees Massive Sell-Off From Miners, As Price Holds Steady

by CoinNews
written by CoinNews

Amid the excitement encompassing the approval of Bitcoin Spot Exchange-Traded Funds (ETFs), BTC miners have been spotted carrying out an aggressive selling spree leaving the community to ponder on the impact of the sell-off.

Bitcoin Miners Engage In Selling Spree

Well-known cryptocurrency analyst Ali Martinez shared this information with the community on the social media network X (formerly Twitter), noting a “substantial increase in selling activity” from Bitcoin miners lately.

According to data shared by Ali, miners have sold about 10,600 Bitcoin in less than 24 hours. This was valued at an estimated $455.8 million as of the time of the report.

Bitcoin
BTC miners in selling mode | Source: Ali_charts on X

The recent increase in sales by the Bitcoin miners indicates a responsive market. In addition, the sizable amount involved signifies an impactful development in the cryptocurrency landscape.

Several reasons could be traced back to the massive selling spree by these miners. One potential reason could be attributed to the decline in the Bitcoin hash rate, which generally affects the profitability of miners.

BTC miners must make several guesses at a challenging mathematical problem in order to process transactions. A greater hash rate indicates that the miners are carrying out more guesses, suggesting more effort to secure the network. 

The crypto asset’s hash rate saw a notable decrease of 25% during the last weekend. This raises speculations regarding the security of BTC’s network ahead of the much-awaited “Halving.”

It was reported that the total real-time rate from all mining pools decreased from 570 exahashes per second (EH/s) to as low as 425 EH/s. However, the hash rate is currently sitting at 550 exahashes per second (EH/s).

The reduction occurred due to the restrictions placed on businesses’ use of electricity by ERCOT (Electric Reliability Council of Texas) because of unfavorable cold weather.

Interest In BTC Mining From Institutions

Top financial companies have been demonstrating interest in Bitcoin mining companies for a while now. Various financial institutions have made significant investments, which have also helped the mining industries. 

Even those who have historically opposed Bitcoin or have been hostile to it have invested millions of dollars in the industry throughout 2023.

Since August 2023, Blackrock has been a significant stakeholder in four of the five biggest mining companies. The asset manager increased its level of involvement with these firms only during the second half of last year.

As of the time of writing, Bitcoin was trading at $42,710, indicating an over 7% decrease in the past seven days. Its market cap is up slightly by 0.02% in the past 24 hours, while its trading volume is down by 17.17%.

Bitcoin
BTC trading at $42,730 on the 1D chart | Source: BTCUSDT on Tradingview.com

Featured image from iStock, chart by Tradingview.com

Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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CoinNews

Ethereum Price Could Start 2024 With A Strong Increase If It Holds This Support

by CoinNews
written by CoinNews

Ethereum price is correcting gains below the $2,350 zone. ETH could attempt a fresh increase unless there is a close below the $2,200 support.

  • Ethereum is correcting gains and trading below the $2,350 level.
  • The price is trading below $2,320 and the 100-hourly Simple Moving Average.
  • There is a key bearish trend line forming with resistance near $2,300 on the hourly chart of ETH/USD (data feed via Kraken).
  • The pair could start a fresh increase if there is a close above the $2,350 level.

Ethereum Price Eyes Fresh Increase

Ethereum price struggled to clear the $2,440 resistance zone and started a fresh decline. ETH declined below the $2,350 support zone to move into a short-term bearish zone, like Bitcoin.

There was a close below the $2,320 level. A low was formed near $2,258 and the price is now consolidating losses. Ethereum is now trading below $2,320 and the 100-hourly Simple Moving Average. There is also a key bearish trend line forming with resistance near $2,300 on the hourly chart of ETH/USD.

On the upside, the price is facing resistance near the $2,300 level and the trend line. It is close to the 23.6% Fib retracement level of the downward move from the $2,445 swing high to the $2,258 low.

Ethereum Price

Source: ETHUSD on TradingView.com

The first major resistance is now near $2,350 or the 50% Fib retracement level of the downward move from the $2,445 swing high to the $2,258 low. A close above the $2,350 resistance could send the price toward $2,400. The next key resistance is near $2,440. A clear move above the $2,440 zone could start another increase. The next resistance sits at $2,500, above which Ethereum might rally and test the $2,550 zone.

More Losses in ETH?

If Ethereum fails to clear the $2,300 resistance, it could continue to move down. Initial support on the downside is near the $2,250 level.

The first key support could be the $2,240 zone. A downside break and a close below $2,240 might start another major decline. In the stated case, Ether could test the $2,200 support. Any more losses might send the price toward the $2,120 level.

Technical Indicators

Hourly MACD – The MACD for ETH/USD is losing momentum in the bearish zone.

Hourly RSI – The RSI for ETH/USD is now below the 50 level.

Major Support Level – $2,240

Major Resistance Level – $2,350

Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Finance

Should You Take Social Security at Age 65, 67, or 70? An Extensive Study Finds That 1 Claiming Age Holds a Big Advantage

by CoinNews
written by CoinNews

For the past 22 years, national pollster Gallup has surveyed retirees to gauge their reliance on Social Security income to make ends meet. In each of these years, anywhere from 80% to 90% of then-current retirees noted that their Social Security benefit comprises a “major” or “minor” part of their monthly income. 

Considering how important Social Security is to current retirees and the key role it’s likely to play in keeping future generations of retired workers out of poverty, there’s arguably nothing more important than deciding when to begin taking your Social Security benefit. And making this decision begins with understanding how your monthly benefit is calculated.

A pair of glasses, a pen, and a calculator, set atop a Social Security benefits application.

Image source: Getty Images.

These four factors are what determine your monthly Social Security benefit

While there are certain elements that could alter what retirees ultimately get to keep of their payout (e.g., the federal taxation of benefits and penalties for certain early filers), there are four factors used by the Social Security Administration (SSA) to calculate what you’ll receive each month from the program. Assuming you’ve earned the 40 requisite lifetime credits to receive a retired-worker benefit, these four factors are your:

The first two components, work history and earnings history, take into account how long you’ve worked and the amount you’ve earned each year (wages and salary, but not investment income). As you might imagine, more earned income will almost certainly result in a bigger Social Security check.

The caveat is that the SSA will account for your 35 highest-earning, inflation-adjusted years when calculating your Social Security benefit. Every year less than 35 worked will result in a $0 being factored into your calculation. If you have any aspirations of maximizing your payout, you’ll need to work a minimum of 35 years.

The third factor, your full retirement age, is solely determined by your birth year and represents the age you become eligible to receive 100% of your retired-worker benefit. A majority of the current labor force was born in or after 1960, which equates to a full retirement age of 67.

The fourth factor, and the one capable of meaningfully altering how much you’ll receive each month or during your lifetime from Social Security, is your claiming age. Retired-worker checks can be taken as early as age 62, but as you can see in the table, patience is encouraged. For every year an eligible beneficiary waits to take their benefit, their monthly payout can increase by up to 8%, through age 69.

Birth Year Age 62 Age 63 Age 64 Age 65 Age 66 Age 67 Age 68 Age 69 Age 70
1943-1954 75% 80% 86.7% 93.3% 100% 108% 116% 124% 132%
1955 74.2% 79.2% 85.6% 92.2% 98.9% 106.7% 114.7% 122.7% 130.7%
1956 73.3% 78.3% 84.4% 91.1% 97.8% 105.3% 113.3% 121.3% 129.3%
1957 72.5% 77.5% 83.3% 90% 96.7% 104% 112% 120% 128%
1958 71.7% 76.7% 82.2% 88.9% 95.6% 102.7% 110.7% 118.7% 126.7%
1959 70.8% 75.8% 81.1% 87.8% 94.4% 101.3% 109.3% 117.3% 125.3%
1960 or later 70% 75% 80% 86.7% 93.3% 100% 108% 116% 124%

Data source: Social Security Administration. Table by author.

Should you claim benefits at age 65, 67, or 70?

As you can see from the percentages in the table, there’s a lot riding on your claiming decision. The challenge is there’s no concrete formula that’ll tell us which age is best to begin taking benefits. Without knowing our expiration date, there’s always going to be some guesswork involved.

Every claiming age, from 62 through 70, has its advantages and drawbacks. In the years to come, ages 65, 67, and 70 are all likely to become increasingly popular claiming choices. Here’s a breakdown of what each of these three claiming ages offers retirees, along with potential drawbacks.

  • Age 65: An age 65 claim offers a sensible middle-ground approach for retirees. In exchange for waiting three years, once eligible to begin receiving a Social Security check, your monthly benefit would be reduced by only 6.7% to 13.3%, depending on your birth year. That’s a considerably smaller permanent reduction than the 25% to 30% haircut age 62 claimants can expect. On the other hand, age 65 claimants haven’t reached full retirement age, and can therefore be exposed to select penalties, including partial or full benefit withholding, per the retirement earnings test.
  • Age 67: Taking your payout at age 67 is another middle-ground claiming tactic, but with an arguably larger bull’s-eye. Since this is the full retirement age for most of today’s labor force, waiting until age 67 will entitle future beneficiaries to 100% of their monthly benefit. The one downside to an age 67 claim is that if you live well past age 80, you’ll likely miss out on a significant amount of additional lifetime income from Social Security.
  • Age 70: The undeniable lure of taking your Social Security check at age 70 is that you’re maximizing what you’ll receive each month. Workers born in or after 1960 can expect to receive 24% more than what they would have taken home each month at age 70. The potential drawback is that you may not live long enough to see your patience pay off in the form of a higher lifetime benefit.

The all-important question is, which of these claiming ages — 65, 67, or 70 — is going to be best for a majority of future retirees? The answer to that question can be found in an extensive study released four years ago.

A person seated on a couch holding their glasses while critically reading material on an open laptop.

Image source: Getty Images.

One claiming age gives retirees the best chance to get the most out of Social Security

In 2019, Washington, D.C.- based financial planning company United Income released a study that examined the claiming decisions of approximately 20,000 retirees using the University of Michigan’s Health and Retirement Study. The goal of this analysis was to extrapolate these claims and determine whether retirees made an optimal choice. For United Income, “optimal” means a claiming decision that resulted in the highest possible lifetime income, which may not necessarily correlate with the highest monthly income.

What researchers at United income found was a glaring disparity between actual claims and optimal claims. Whereas the bulk of the 20,000 claimants studied chose to take their Social Security benefit prior to reaching full retirement age (ergo, accepting a permanent monthly payout reduction), the lion’s share of optimal claims occurred at or after full retirement age.

More specifically, United Income found that a jaw-dropping 57% of claimants would have optimized their lifetime income by taking benefits at age 70. Although age 67 was the second-most-optimal claiming age — around 10% of retirees would have benefited most from an age 67 claim — it’s well behind age 70 in terms of maximizing lifetime income. Meanwhile, age 65 came in behind ages 66 through 70 in terms of optimized lifetime benefits. 

Keep in mind that there are instances where earlier filings make sense. For example, a person with one or more chronic health conditions who could have their life expectancy shortened may receive more lifetime income with an earlier claim.

Nevertheless, United Income’s extensive study suggests that a majority of future retirees would be better off financially by waiting until age 70 to begin receiving their Social Security check.

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CoinNews

MicroStrategy bought $167M worth of Bitcoin in Q3 2023, holds over $4B total

by CoinNews
written by CoinNews

Steadfast Bitcoin investor MicroStrategy announced that it purchased another batch of Bitcoin in its Q3 2023 earnings report on Nov. 1.

Andrew Kang, Chief Financial Officer (CFO) at MicroStrategy, said:

“We further increased our total bitcoin holdings to 158,400 bitcoins, adding 6,067 bitcoins since the end of the second quarter. Our commitment to acquire and hold bitcoin remains strong, especially with the promising backdrop of potential increased institutional adoption.”

The company applied different valuation methods to its Bitcoin holdings. It reported a total market value of $4.277 billion as of Sept. 30. It identified the original cost basis — that is, the purchase price — as $4.681 billion. The company also reported a much lower carrying value of $2.5451 billion, accounting for cumulative impairment losses of $2.230 billion.

Regarding its purchase of 6,067 BTC since the end of Q2, MicroStrategy said that this amount was worth $167 million in total, or $27,531 per coin.

MicroStrategy executive chairman Michael Saylor separately stated that the company acquired 155 BTC in October alone, valued at $5.3 million.

On Oct. 27, Saylor highlighted that Bitcoin outperformed certain other high-profile investments on a 2023 year-to-date basis. He provided a chart indicating that Bitcoin gained 103% over that period, while Nasdaq 100 gained 30% and gold gained 9.7%.

MicroStrategy started buying BTC in 2020

MicroStrategy first invested in Bitcoin in 2020 and has increased its dedication to crypto investment since then. The company now describes Bitcoin investment and business analytics software as its two main corporate strategies.

The firm is the publicly traded company with the largest amount of Bitcoin holdings. Other notable investors like Marathon (which holds 13,286 BTC worth $470 million) and Tesla (which holds $218 million of Bitcoin) rank distantly behind MicroStrategy’s $4 billion.

MicroStrategy is also developing services related to Bitcoin’s Lightning Network. The company announced an enterprise Lightning plugin in late 2022, now reflected on its website. Saylor’s email address was also converted to a Lightning address this year.



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CoinNews

Bitcoin price holds steady following surprising US PPI uptick, eyes on upcoming CPI data

by CoinNews
written by CoinNews

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