Bitcoin Forum

For some reason everyone was convinced that this ETF will be the turning point for bitcoin & bring many more mainstream investors into bitcoin without them having to make a wallet and protect their private keys etc...

HERE IS WHY THE ETF HAS DONE & WILL NEVER DO ANYTHING GOOD FOR BTCITCOIN :

• Nobody involved in the ETF knows what they're doing! 
  
  

That's why they listed Mt.Gox as one of the three exchanges that will be mirrored in the ETF. Who knows if other exchanges can stand the test of time & create profit with no new funds in bitcoin. They state they have no idea wtf they are doing in the form they released to the SEC "... the Sponsor and its management have no history of operating an investment vehicle like the Trust, their experience may be inadequate or unsuitable to manage the Trust.
The Sponsor was formed to be the Sponsor of the Trust and has no history of past performance in managing investment vehicles like the Trust. The past performances of the Sponsor’s management in other positions are no indication of their ability to manage an investment vehicle such as the Trust. If the experience of the Sponsor and its management is inadequate or unsuitable to manage an investment vehicle such as the Trust, the operations of the Trust may be adversely affected."
This goes hand in hand with
"The value of the Shares could decrease if unanticipated operational or trading problems arise. The mechanisms and procedures governing the creation, redemption and offering of the Shares and storage of the Bitcoins have been developed specifically for this product. There may be unanticipated problems or issues with respect to the mechanics of the Trust’s operations and the trading of the Shares that could have an adverse effect on an investment in the Shares. In addition, although the Trust is not actively “managed” by traditional methods, to the extent that unanticipated operational or trading problems or issues arise, the Sponsor’s past experience and qualifications may not be suitable for solving these problems or issues..."
They also acknowledge that they could be hacked or the private key could be compromised or the security system they use could have flaws or bugs & any of that would mean no recovery of any of the bitcoins rendering the shares useless. Bitcoins held by the Trust are not subject to FDIC or SIPC protections and the bitcoins will not be insured in anyway. Also nobody can be held responsible if one day they are all gone.

• The block reward halving in 2016 is also looked at as negative! 
  

"As the number of Bitcoins awarded for solving a block in the Blockchain decreases, the incentive for miners to continue to contribute processing power to the Bitcoin Network will transition from a set reward to transaction fees. The requirement from miners of higher transaction fees in exchange for recording transactions in the Blockchain may decrease demand for Bitcoins and prevent the expansion of the Bitcoin Network to retail merchants and commercial businesses, resulting in a reduction in the Blended Bitcoin Price. If transaction fees paid for the recording of transactions in the Blockchain become too high, the marketplace may be reluctant to accept Bitcoins as a means of payment and existing users may be motivated to switch from Bitcoins to another Digital Math-Based Asset or back to fiat currency. Decreased use and demand for Bitcoins may adversely affect their value and result in a reduction in the Blended Bitcoin Price."
"If the award of Bitcoins for solving blocks and transaction fees for recording transactions are not sufficiently high to incentivize miners, miners may cease expending processing power to solve blocks and confirmations of transactions on the Blockchain could be slowed. A reduction in the processing power expended by miners on the Bitcoin Network could increase the likelihood of a malicious actor or botnet obtaining control in excess of 50 percent of the processing power active on the Bitcoin Network or the Blockchain, permitting such actor or botnet to manipulate the source code of the Bitcoin Network in a manner that adversely affects an investment in the Shares or the ability of the Trust to operate. If transaction fees are not sufficiently high, miners may not have an adequate incentive to continue mining and may cease their mining operations. Miners ceasing operations would reduce the collective processing power on the Bitcoin Network, which would adversely affect the confirmation process for transactions and make the Bitcoin Network more vulnerable to a malicious actor or botnet obtaining control in excess of 50 percent of the processing power on the Bitcoin Network. Any reduction in confidence in the confirmation process or processing power of the Bitcoin Network may adversely impact an investment in the Shares. " They also realize this could cause serious liquidity problems for the shares and they might possibly be locked out of buying or selling reasonably.

• This ETF is for brokerage accounts & small time investors might not be allowed to buy in until it's too late! 
  

Read more on who is even allowed to buy/short this ETF! Since they want to release over 1mil shares right off the bat, Remember many big investors will be the first to have shares of this ETF that they will gladly sell you for over $20/share ESPECIALLY since they can continue to issue shares(read the next 2 bullet points for more info)
"...The Shares may be purchased from the Trust only in one or more blocks of [50,000] Shares (a block of [50,000] Shares is called a Basket). The Trust will issue Shares in Baskets to certain authorized participants (Authorized Participants) on an ongoing basis as described in “Plan of Distribution.” Baskets will be offered continuously at the net asset value (NAV) for [50,000] Shares on the day that an order to create a Basket is accepted by the Trustee. The Trust will not issue fractions of a Basket."
"... Baskets may be created or redeemed only by Authorized Participants. Each Authorized Participant must (1) be a registered broker-dealer or other securities market participant such as a bank or other financial institution which is not required to register as a broker-dealer to engage in securities transactions, (2) be a direct participant in DTC, (3) have entered into an agreement with the Trustee and the Sponsor (“Authorized Participant Agreement”) and (4) have established a Bitcoin custody account (“Authorized Participant Custody Account”) with the Trustee. The Authorized Participant Agreement provides the procedures for the creation and redemption of Baskets and for the delivery of Bitcoins required for such creations or redemptions."

• Even the "Authorized Paricipants" admit speculators are the only ones using Bitcoin
  

"Currently, there is relatively small use of Bitcoins in the retail and commercial marketplace in comparison to relatively large use by speculators, thus contributing to price volatility that could adversely affect an investment in the Shares."
"As relatively new products and technologies, Bitcoins and the Bitcoin Network have not been widely adopted as a means of payment for goods and services by major retail and commercial outlets. Conversely, a significant portion of Bitcoin demand is generated by speculators and investors seeking to profit from the short—or long-term holding of Bitcoins. The relative lack of acceptance of Bitcoins in the retail and commercial marketplace limits the ability of end-users to pay for goods and services with Bitcoins. A lack of expansion by Bitcoins into retail and commercial markets, or a contraction of such use, may result in increased volatility or a reduction in the Blended Bitcoin Price, either of which could adversely impact an investment in the Shares."

• Unlimited ability to issue shares!!! One share doesn't even equal one bitcoin & it never will!
   

They planned to make a share of this ETF equal to .2BTC and they will have the ability to issue more shares at any time(in which the "authorized participants" will always get the first offerings for) This means they would have the ability to lower your exposure & your gains by issuing more shares that they have the authority to buy first! Then your share becomes worth .1bitcoin then .05 then who knows! And it's all at their leisure! "... The Trust expects to create and redeem the Shares from time to time, but only in one or more whole Baskets (a Basket equals a block of [50,000] Shares..."

• There are many many events that can happen causing this ETF to terminate.. Here is what they mention from 2013 :   
  

•      the Trustee is notified that the Shares are delisted from the [EXCHANGE] and are not approved for listing on another national securities exchange within five business days of their delisting;
•      Shareholders acting in respect of at least 75 percent of the outstanding Shares notify the Trustee that they elect to terminate the Trust;
•      60 days have elapsed since the Trustee notified the Sponsor of the Trustee’s election to resign and a successor trustee has not been appointed and accepted its appointment;
•      the SEC determines that the Trust is an investment company under the Investment Company Act of 1940 and the Trustee has actual knowledge of that determination;
•      the CFTC determines that the Trust is a commodity pool under the Commodity Exchange Act of 1936, as amended (“CEA”), and the Trustee receives notice from the Sponsor that, because of that determination, termination of the Trust is advisable;
•      the Trust is determined to be a “money transmitter” under the regulations promulgated by FinCEN under the authority of the US Bank Secrecy Act and is required to comply with certain FinCEN regulations thereunder, and the Trust receives notice from the Sponsor that, because of that determination, termination of the Trust is advisable;
•      the Trust fails to qualify for treatment, or ceases to be treated, as a grantor trust for US federal income tax purposes, and the Trustee receives notice from the Sponsor that the Sponsor determines that, because of that tax treatment or change in tax treatment, termination of the Trust is advisable;
•      a United States regulator requires the Trust to shut down or forces the Trust to liquidate its Bitcoins;
•      the aggregate market capitalization of the Trust, based on the closing price of the Shares, was less than $[    ] million (as adjusted for inflation by reference to the US Consumer Price Index) at any time after the first anniversary of the Trust’s formation and the Trustee receives, within six months after the last trading date on which the aggregate market capitalization of the Trust was less than $[    ] million, notice from the Sponsor of its decision to terminate the Trust;
•      60 days have elapsed since DTC ceases to act as depository with respect to the Shares and the Sponsor has not identified another depository that is willing to act in such capacity; or
•      the Trustee elects to terminate the Trust after the Sponsor is conclusively deemed to have resigned effective immediately as a result of the Sponsor being adjudged bankrupt or insolvent, or a receiver of the Sponsor or of its property being appointed, or a trustee or liquidator or any public officer taking charge or control of the Sponsor or of its property or affairs for the purpose of rehabilitation, conservation or liquidation.
 

[/list]
I think I could go on forever but it is very hard to preach to people who only see things one sided & one way. I am a supporter of bitcoin but even though I have made money in the process I am worried about other people getting sucked in & never being able to cash out or use their currency! I am just noticing that this amazing technology is being stolen from bitcoin & being moved to other practical uses. I am noticing all the money being moved out of bitcoin and only "dumb" money flowing in. As the system gets bigger it looks more and more unsustainable. I mean c'mon we are mining close to $2mil worth of bitcoin per day everyday... In 2013 it was calculated that every 24hrs miners are burning through over $300,000 in just electricity cost! Some miners out there haven't sold yet & their expenses keep rising! Soon they won't be able to take out more loans to cover costs and they will have to join all the other miners who are dumping. WOW! 2016 should be very surprising and interesting indeed!!! If somehow you were a firm believer that this ETF will turn bitcoin completely around somehow... You must consider that the Winklevoss twins will at least do everything in their power & throw all the money they can into constantly suppressing the price of each bitcoin so they can buy up a lot more for future profit. So why would you be a buyer anywhere near these levels when in the short term you will be able to buy 2,3, maybe even more than 4times as much in bitcoin! IN THE SHORT TERM!!!
This ETF has already taken a year and a half... Watch what happens in price over the next year... Good luck to all.

also great video why bitcoin failed:

https://www.youtube.com/watch?v=GYJdOiLqSxE

The OP is FUD in its grandest form.

What is your motivation?

Why don't you go preach gun control on the NRA forums instead.

^

LOL!

I'm 100% sure Fallling is getting paid after that wall of text.

Sucks how you guys can't even see facts... I now own two businesses that both accept bitcoin. You guys are doing nothing for the community & instead of trying to come up with solutions, you spend your time photo shopping! It's sad!!! I literally put all the facts out & you guys can't even address it properly. Keep trying to get rich off bitcoin, looks like its working -_-

This is why me & many more with large sums of money in bitcoin are pulling out.

Bitcoin etf was never going to serve the bitcoin community and it was never aimed to be a charitable venture.   The idea is to profit from bitcoin growth, how that helps us is not immediately clear apart from raising the profile of bitcoin perhaps.
   Their intentions were to profit not serve though, nobody needs a lecture on that as its quite obvious.    The main basis behind capitalism is open competition inadvertently causes social good by the work done in self interest being applicable and useful to a wider audience.  The ETF might have helped pave political acceptance Im thinking, any lasting benefit is probably quite unintentional.  If it does not go ahead that is more a loss their end then on the market here I think

The ETF is a middleman.  Anybody reading this forum shouldn't be operating in BTC through a middleman. The entire purpose of BTC is to remove the middleman!  Whatever the ETF does is irrelevant.  It was never going to be the make or break it thing for BTC.  Just like financial vehicles such as IRAs diversify in gold right now, they will eventually do the same thing with Bitcoin.  All Bitcoin has to do is not die for it to happen.

There actually is a real need for 3rd party security services to handle BTC storage for people with no technical knowledge, a Bitcoin bank in other words, and that functionality essentially can already do most things an ETF does with probably less legal requirements.  Going the ETF route really doesn't make sense.

Please change the title or show proof that the ETF has already FAILED.

Title should say "Why I think the ETF might fail"

I encourage you to come get your car fixed in NYC by me! Swing by so I can get your car repaired in no time... or I can sell you one of the great cars off my lot. Let me know what you would want. Both accepting bitcoin! Or Vist KlipKeeper.com (http://KlipKeeper.com) I can even give you guys the code "klipcig" for 20% off! Enjoy!!!


Very true! Unfortunately if more leveraged shorting occurs, things will not be looking good. The people involved in this ETF are already controlling the btc market... we are talking about big moves here!!!

I think that coin ownership will be one of the reasons for Bitcoin ETF to fail. You just can't guarantee, that the majority of coins aren't held by criminals, who earned it during the period where bitcoin was almost solely used by the black market and the coin supply was cheap.
Anyway, I think that there could be one last pump left with BTC. The pump that will be started by a "credible" rumor that ETF will be super successful. This pump will be the exit for the smarter speculators who started this rumor.

It's no surprise that no one even tries to debate OP's arguments. The majority of people here always try to ridicule someone who is critical about bitcoins success. To them, bitcoin is not a matter of debate, but a matter of faith.

At least the Unibomber's Manifesto was entertaining. The OPs rant was just silly and random. His statements didn't support any rational argument. Besides, there are already Bitcoin based financial instruments in the wild. Why doesn't the OP mention them?

If you actually read the ETF's prospectus on the SEC site, the terms are not very good. Compared to a good mutual fund, they're awful. For example, the managers of the ETF do not hold errors, omissions, or theft insurance in case they happen to somehow lose the Bitcoins. Owners of fund shares have weakened voting and litigation rights. Stuff like that. There are more risks here than the value of Bitcoin.

muahahaha, after reading this i feel the strong urge to send more cash to bitstamp and buy bitcoins. actually this is what i will do today.
op, you are doing it wrong. e v e r y o n e  with a few brain cells left knows now you get paid for puking out this analysis.

I bought 20 BTC after reading this thread. True story.

I had never, ever understood the ETFs, derivatives, stocks and anything else in Bitcoin. I'm not mocking anything, I sincerely never understood why would someone need something like that.

There are many types and risk levels for investments. There's plenty of room for a Bitcoin ETF and certainly far riskier options.

bla bla bla bla bla bla bla bla bla

You must have a bad life isn't it? You act like a 8 year old kid whos crying for his lolypop.

Btw, if the ETF failed we shoud alrdy know that. I dont see those headlines on Coindesk.

OP doesn't know the meaning of the word "failed" then spreads FUD without substance.

I applaud you man. You put more work into your FUD than anyone. It's obvious that you took the time to do some editing and adding bullet points, etc. ;It's very readable. I disagree with the premisses your making, but you do a good job posting.
Consider that the failings you see are failings that ETF investors make make if they don't understand what they are doing. That's a good point. One should never invest money in anything unless they fully understand it. I would imagine that many of the ETF investors do know what they are doing and see a realistic path to profits.

That is gen. 1 thinking, IMO. Eventually they will spend their bitcoin directly rather than using bitcoin as a way to collect dollars.

Obviously you don't pay attention to my post... I am very transparent about when I buy BTC & when I sell it after I feel a rally is loosing steam. You are correct though, I hope eventually we might find a real good use for bitcoin! At least that's what all these speculators are hoping. Right now we are on the same path as the failing dollar. Extreme Leverage, naked shorting, government control, banks, interest, traders, regardless everyone in BTC is speculating!! How am I spreading fud when I had a lot of money in bitcoin?? I go to broad st. at least once per month! Most on here have never even been to anything pro bitcoin. The people I work with closely on wall st. have said many many times that this ETF in it's current form will never be released! Most on this forum would never buy that money stealing ETF anyway... All I did was put up facts so you guys don't think a massive amount of money will go rushing into BTC because of this ETF (which I have seen many many many post on) Since when do people on this forum attack you for letting your fellow bitcoiners know what the deal is??? IT'S HONESTLY SAD!

You don't have to listen to me, many on this site never did... some did & have saved a lot of money not buying this whole way down to 350! The ones who completely shit on the facts I bring to the table are usually the ones buying the entire way down! They are salty they keep getting burned again and again so I can't argue with them... They have faith in a system they don't know or understand. Good luck to them all.

Your own username is 'fewcoins'.

It seems pretty unlikely that you a) have any real wealth, b) have 'large' sums in bitcoin or c) are pulling anything out.

You come across as a young dumb kid hoping to push the price down on a day you think might result in a few more coins than normal hitting exchanges (black friday).

Edit: Reddit might be a better crowd for your age group

LMFAO Hilarious! Another basher instead of reading up on facts... I am far from a young kid but okay enjoy your bashing and loosing all your money.
I started with a few coins & I mine more everyday. You have no idea about what I own but continue to guess! You are really doing good smh.
You're probably another salty bag holder that's been buying from the willy bot since 1,200 & you're mad we will never ever see that price again until a pack of gum is $5
I have already pulled out of bitcoin. I WILL GO FULL LEVERAGE INTO SHORTING after the next pop. Just like I have done at every huge pop. Enjoy getting burned buying on the way down.

Anyone with any real helpful opinions, knowledge, or facts???

The Winkelvoss ETF is still pending. Fact.  This thread title is false. Fact. Anything else is speculative. Fact.

You joined this forum two months ago, that is if you aren't a troll alt. If you don't own any coins then you have no influence on the market price except posting troll crap like this on a potentially price sensitive day. I don't think there is anything more to you than that to be honest.

It is dangerous to judge people based on the quality of their prose, but I wish you the best of luck when you 'GO FULL LEVERAGE' matey, you are surely going to need it.

Edit: see posts by Matthecat for an education in bitcoin trading 101

Continue to predict I have no coins & I am coming on here just to troll... That might be something you would do but my real life money is in this digital bitcoin game & I am going to do my due diligence. People with real opinions & information can chime in... Inca, you should probably go find a permabull thread. I think I just saw one about the moon in 2015, enjoy!  :D

Ooh moon! :)

When you start your thread saying "failed" you come across as someone who is not interested in discussing "facts" just trolling and throwing out FUD.

The title of your thread is wrong.  The ETF has not "failed" since it has not even been approved yet, so your "facts" turn out to be nothing more than speculation.

You claim to want to discuss "facts" but you can't even be honest when you start the thread.

If you want to be taken seriously, act like you do.

the ETF has been dragging on for quite a while now - is that the usual timeframe to get an ETF going or is it moving more slowly than usual

They take a fair old while at the best of times, and this is a totally new breed. It could drag on for a long time yet.

Maybe Zuckerberg is lobbying against the ETF just as a revenge against the twins.

Good writer OP!  :)

As long as they perform voluntary trade, and do not rely on the power of the state: As long as they can exist as a fund, they have to create some value for some customers. At the bare minimum, they help calculatively challenged people happy in their delusion.

This isn't a congressional issue. Lobbyists wouldn't have any effect. If true the drama would make a good sequel movie someday.

fewcoins,

Excellent writeup - I agree with many, if not all, of your points.

In summary, wall street = kiss of death.

... Says the person trying to earn Bitcoin from affiliate links.  ::)

Better get out now while you can! Between Second Market and this ETF, Bitcoin is doomed.  ::)

Did I say Bitcoin was doomed?  No.

Wall Street needs Bitcoin more than Bitcoin needs Wall Street.

In fact, Bitcoin does not need Wall Street, at all.

Hero members should know this by now.

You said "kiss of death".  Death is the end.  Doomed is then end.   So, yes, you said that Wall Street would kill Bitcoin which means it is doomed.  Hero members can't read your mind when you say one thing and mean the opposite.

Bitcoin may not "need" Wall Steet, but it is a positive for Bitcoin to have investment and people developing products and uses for the technology no matter where they are based. 

OP says the ETF "failed" when it hasn't even started yet. That is misleading and untrue.

You are wrong, this will bring bitcoin within reach of anyone with a brokerage account.  Because of that infrastructure there will be no ATML or know your customer issues.  I can't help but think that this will be a Very Good Thing.

It has not failed yet.  Let's give it a chance.

20% off sounds a great offer.   I dsagree on the leveraged shorting though, the basic premise of bitcoin is that it is an accounted for system without leverage.  The failures that may occur from leverage will be tied to the companies that operate them much like when mt gox went under.  We found out they had been using fractional reserve but this is not a failure of bitcoin.   Of course if people associate the two and if a leveraged company is used by many then it looks bad but on a basic level this etf failure occuring would not cause any damage to bitcoin itself mostly just its reputation.  
In a network economy that association to negative events can be serious and cause value lost but it is face value.  Im more worried about the protocol or the mining operations long term

It isn't a congressional issue but lobbysts can act in the fincen circle too, isn't it?

To hedge production cost for miners and to gamble.

To make money  ::)

I suppose Wall Street is ultimately about big time gambling and the ETF sounds the same to me.

What I do know about what's going on behind the scenes here is that the Wink bros got a heavyweight attorney that knows her way around the SEC playground very well. I wouldn't write this one off so flippantly. And, SecondMarket ain't no slouch neither. ;)

I totally agree. Bitcoin ETF and CFTC will mess up bitcoin the same way gold ETF messed up gold.
There is NOT enough gold behind gold ETF, options, futures, swaps, etc, etc. Most of it is just paper as in everything else.
As soon as bitcoin is financialized, its long term future will dim.
That does not mean that beforehand there will not be a final "financial bubble" in bitcoin to 5000-10000.

No, the point of Bitcoin was to escape a) the fiat control of central banks, b) the fees of money transmitters, and c) the naked short selling in the gold market.

These are under no threat by taking wall street money.

There is only one reason why most posters are here, and same reason why you are here.

This event already occured with Mt Gox.  It was not 100% backed, depositors there were taking part in a leveraged scheme they were not aware of.    The collapse you are describing is already apparent in the price now with confidence of many shaken in how bitcoin allowed this deception so easily.
    
I dont think we have a solution except the obvious that convenience is not a good reason to keep the majority of your holdings in one place not fully under your control and this was a failure of trust in one man or one website not the bitcoin protocol itself.   Similar failings can occur with gold deposits and many central banks store their gold in new york federal reserve who struggle to return it on demand

Sorry for having my head buried in the sand for a while but are we any closer to knowing if or when this is hitting wall street?

Not yet.  They are waiting on the bureaucrats.

Anti-GOX type measures include auditing their holdings publicly on the blockchain.  :-)

Well no one wants that mess again.

Bitcoin was meant to bring more freedom, less central control and lower costs to the general public.  Embracing a different group of middlemen, rent seekers, and general Wall Street leaches seems quite counterproductive in the long term.

Especially after mt. gox failed & that was suppose to be one of the main indicators!


Point is the cost of production is ridiculous!! Paper money in the banking system has very high profit margin... this shit takes close to $500k PER DAY to make that crazy amount of coins they do. Not enough buyers... prices are being held up by exchange inflating, fractional reserve investing, and it won't end! Don't get caught in this, check out how many people really only "BTCITCOIN" !!! We are simply share holders with .0---% It is horrible! At least cash is gladly accepted everywhere  ;) Good luck to all