COIN ETF effect on USD/Bitcoin

[CEG5952]

Won't 'the whales of wall street' also be able to effectively short Bitcoin now too? I think it's going to lead to a lot more volatility.

How do you short bitcoin using an ETF (besides just selling your ETF shares)?

Couldn't you leverage assets to borrow ETF shares to sell? Just like shorting bitcoins, except ETF shares instead? I would think down pressure on the ETF price would cause similar pressure on exchanges. Maybe I'm missing something here.

[theonewhowaskazu]

Won't 'the whales of wall street' also be able to effectively short Bitcoin now too? I think it's going to lead to a lot more volatility.

How do you short bitcoin using an ETF (besides just selling your ETF shares)?

Couldn't you leverage assets to borrow ETF shares to sell? Just like shorting bitcoins, except ETF shares instead? I would think down pressure on the ETF price would cause similar pressure on exchanges. Maybe I'm missing something here.

Once again, if you've got an actual seat at the exchange you don't even need  to borrow shares. You can just issue more (naked short). Even if you can't cover, you just get hit with a what, 5% failure to deliver fee? And usually you can cover by the settlement date, or at least get some via repo.

[BitchicksHusband]

The COIN ETF has a set number of Bitcoins (which are already procured).

The Winklevii will almost certainly be buying more coins and selling them as ETF shares. The number of shares is not limited by what they have now. So if there is investor demand (and I'm betting there will be tons), they'll be buying more coins and pushing up the price.

Yeah, so basically their stock will be an asset pegged to the bitcoin, if bitcoin goes up everybody win, and without the risk of holding coins by yourself.

That's how I understand it.

I think the attraction of the ETF to Wall Street goes way beyond the technical aspects of storing and handling bitcoins. I think the main issue is that portfolio managers have no way of putting bitcoin into a portfolio without having some sort of instrument like this. It's kinda ridiculous to me that that's the way things work, but that's the way things work ...

Large investors already can invest in bitcoin via the second market bitcoin fund. I would argue that the main attraction for large investors is not having to manage a complex security setup to keep the bitcoin safe, but rather let the trust deal with that.  

Mutual funds, for instance (which house lots of assets) can only buy SEC approved funds.  Lots of businesses have rules that they can only buy SEC approved funds.

[Harley997]

The COIN ETF has a set number of Bitcoins (which are already procured).

The Winklevii will almost certainly be buying more coins and selling them as ETF shares. The number of shares is not limited by what they have now. So if there is investor demand (and I'm betting there will be tons), they'll be buying more coins and pushing up the price.

Yeah, so basically their stock will be an asset pegged to the bitcoin, if bitcoin goes up everybody win, and without the risk of holding coins by yourself.

That's how I understand it.

I think the attraction of the ETF to Wall Street goes way beyond the technical aspects of storing and handling bitcoins. I think the main issue is that portfolio managers have no way of putting bitcoin into a portfolio without having some sort of instrument like this. It's kinda ridiculous to me that that's the way things work, but that's the way things work ...

Large investors already can invest in bitcoin via the second market bitcoin fund. I would argue that the main attraction for large investors is not having to manage a complex security setup to keep the bitcoin safe, but rather let the trust deal with that.  

Mutual funds, for instance (which house lots of assets) can only buy SEC approved funds.  Lots of businesses have rules that they can only buy SEC approved funds.

The SEC does not approve what kinds of funds assets that mutual funds can purchase. The prospectus of a mutual fund will outline exactly what the goals, and risks of the mutual fund are and what kinds of assets that it will invest in. 

[TheJuice]

Has there been an updates with the COIN fund? Last I heard it was stuck in SEC land.