What's So Great About a Bitcoin ETF?


#1

I’ve been trying to get an idea of how important a Bitcoin ETF might be. There was a lot of hype when the futures market started, and that’s been mostly a dud. Will an ETF be any different? Here’s what I’ve come up with so far. Feel free to add to this list or correct me where I’m mistaken:

  • An ETF is regulated. (so any investor class can participate; such as pensions, mutual funds, etc.)

  • It most likely will be insured. (greatly reduces perceived risk)

  • The ETF would actually need to purchase and hold the BTC in its portfolio. (this really sets it apart from the futures market and means the volume of the ETF would directly affect the price of BTC.)

  • The ETF would be responsible for custody of the BTC (big investors won’t have to worry about storing and securing their keys)

  • ETFs tend to be long-term investments (this could affect the supply-side of BTC, causing prices to rise)

  • ETFs increase market liquidity (an ETF would presumably be able to make massive trades much easier than exchanges, and cheaper than OTC markets)

When the first gold ETFs started in late 2004 / early 2005, there wasn’t an immediate surge in the price of gold, but there is no doubt that the ETFs helped fuel the massive growth that soon followed.


#2

You answered your own question. Massive growth follows an ETF.


#3

ETF’s by definition will end many of the current problems of investing in crypto. Once Bitcoin makes it there, others will follow. I expect many moons when this happens :slight_smile:


#4

I’d much rather see ETF’s over CFD’s, though I still think it might be a little way off as insurance companies don’t want to touch it.

Still waiting to see what the “old boys” are going to do.

Stay Fishy


#5

I agree that an ETF will be great for BTC however the ETF didn’t have much to do with gold soaring in the late 2000’s.

The recession is what caused a meteoric rise in gold prices. People lost faith in USD because of the recession and fled to gold in order to protect themselves from possible massive inflation and government collapse. None of that actually happened but people were very scared.

Every time the economy takes a dive gold shoots up in value due to loss of faith in fiat currencies and the economic system as a whole…


#6

Apparently the current Gold ETF holdings are right around $100 billion, worldwide. Compare that to the approximately $7 trillion marketcap of gold. That comes out to about 1.5%.

If you take 1.5% of Bitcoin’s marketcap today, that ends up right around $2 billion. Not very much.

I can’t help but think a Bitcoin ETF would see much higher investment than that. But it’s an interesting comparison.


#7

What strikes me is that nobody seems to talk about the fact that ETF’s go exactly against why BTC was created but nobody seems to care…greed comes always on top in human nature and here is an example. Let’s be honest, right!


#8

Can you explain this in more detail? What exactly do you think Bitcoin was created for?


#9

Well, it seems to me that BTC was (if it really was I don’t know) to free up the world of centralised governance. Does it seem that any of the Futures, GBTC, ETF’s, etc. are supporting that? We should, at least, be hoping to find ways of increasing the adoption of crypto by getting the fundamentals better as the community of developers is trying to do and not by making up derivatives that are actually the origin of the problem that BTC is trying to solve. People are looking for the SEC to regulate or not which is a total contradiction for what the crypto world was aiming for…Aren’t we going back to the problem?


#10

I thought this news was interesting, and closes the gap between crypto and traditional investing. The first IPO to accept BTC goes to High Times magazine. Start of a trend? I think so. Could it be that the first BTC related ETF will consist of stocks funded by BTC, and rather than in a fund of coins?


#11

I agree 100% most people here could only care about the price they don’t give a shit about the philosophical idea of bitcoin don’t get me wrong I’d love to see the price go up against the dollar but the whole point of bitcoin is no regulation,no authority, and no government backing.


#12

You make some good points but ETFs aren’t all bad. First of all, they can’t change the fundamental nature of btc. It will still be decentralized and censorship resistant. Second,it will be the first exposure to crypto for most people in a familiar manner. I’m expecting that many people will then start to look into and actually buying into other cryptos directly. Third, it will massively drive up btc prices and because of greed, like it or not, will attract many more people into the crypto space (not merely thru an etf) and increase crypto adoption and perceived legitimacy. There will be coins such as monero that most likely will never have an etf but will get new money flowing into it, due to the additional money and adoption gained from a btc etf.


#13

All good arguments. I am not sure that ETF’s will not interfere with BTC though. This time we are talking about custody, and I wonder how the SEC will be able to rule without any saying in the matter…no auditing exchanges, nothing? Beside BTC purpose was to give the power back to people by holding their assets with no third party. At the end as they say in marketing, you should listen to the market and not try to get the market buy into your idea. BTC doesn’t seem to mirror the current human nature in today’s society.


#14

Well there are always alternatives to btc. I don’t think coins such as Monero will ever be subject to any sort of auditing. I tend to look at the entire crypto space, not merely btc. I think diversification of holdings is key. Nobody knows the future for certain.


#15

Bitcoin was as built to incentivize greed. The deeper into it you get, the more recourses you must put into. To reward that, you get more value/BTC.
Look at Bitmain. I don’t agree with what they have done and are doing. The btc system has rewarded them with Billions of profit, and the power to shape the entire space.
Back to the original point, legacy financial systems are uniquely resistant to disruption unlike any other space/technology before. Why this is am not completely sure. What seems to happen is a very slow shift from one tech to another. Allowing King makers to harvest the new tech for their own profit, as they have the greatest resources to put into it. BTC is a speeding bullet to them.
They are using regulation and banks lack of funding into crypto to slow the bullet down, hop on and enjoy the ride. In essence they are trying assimilating BTC, I hope they fail. Until the last couple years btc was the plague to them. Now legacy systems are trying go all in, banks, investment firms, and countries are openly or quietly embracing crypto.
As bitcoin grows I am sure it will eat small countries and then go after larger ones later. It will provide freedom from economic slavery from some of the worst fiat systems. Look at Argentina.
I am no longer sure if it will kill the legacy banking and stock market as we know in my life time. BTC and a few other crypto’s will FORCE them to change there business models for the better or die. I think this is the best outcome we can hope for.


#16

#17

Awesome post. I am hoping to establish a strong position in BTC, before the next bull run/halving as well. I have been here in the space for about 4 months, trying learn as much as I can. I am on book 10 or 11 now. I KNOW you are right about supply and demand theory.
We should chat about firearms later. Pm me if you want.