Bitcoin ETF (Exchange Traded Fund)

[EuSouBitcoin]

Topic: Since bitcoin is a "virtual commodity", why not create a bitcoin exchange traded fund (ETF)? You could make 1 ETF share represent 1 BTC. If someone could successfully do this it would certainly help with regard to exchanging BTC for fiat currencies. Discuss amongst yourselves.

[1713520091]

1713520091

[dinzy]

Since it's so easy, why not do it yourself?  Not that I have any idea how this would be any different.  ETFs own the stocks so in this case you would own a fraction of the bitcoins in the etf and this would differ from owning the bitcoins yourself how?  Or are you naively suggesting that someone could magically list a BTC fund on a legitimate stock exchange?

sorry to be such a prick, but I couldn't help myself

[Fjordbit]

Topic: Since bitcoin is a "virtual commodity", why not create a bitcoin exchange traded fund (ETF)? You could make 1 ETF share represent 1 BTC. If someone could successfully do this it would certainly help with regard to exchanging BTC for fiat currencies. Discuss amongst yourselves.

One advantage (to us) would be that people could invest in BTC with their IRAs. This would help raise the price of btc. Not sure if it would work out well for the retirees, though.

I'm not sure, but I think there are minimum capital requirements. I think ETFs are considered hedge funds, which require $500,000. Now if early adopter were out there with 50k btc, they could probably start one up.

One final thing is that I think it might be hard to set a NAV since there are many different trading sites and btc is not very liquid.

I did find this book which was interesting. http://www.amazon.com/Create-Your-Hedge-Fund-Yourself/dp/0470138955  Not personally going to buy it.

[Grinder]

The reason why ETFs are used is that they contain assets of a kind or mix that individual investors can't easily buy on their own. It is much easier for most people to buy a bitcoin than a share in an ETF, so there's no point in creating one.

[cothoms]

Correct, Grinder.  Since ETFs are typically aggregated, they point at an index that details the collective movement.  But since BTC is an individual source, an ETF consisting solely of BTCs would be like investing directly in BTCs.

[Fjordbit]

Correct, Grinder.  Since ETFs are typically aggregated, they point at an index that details the collective movement.  But since BTC is an individual source, an ETF consisting solely of BTCs would be like investing directly in BTCs.

Typical isn't always, for example GLD. Or even better, FXY. Yeah you could just invest directly in yen, but people find ETF easier in a lot of cases. Hell in forex you get a 50:1 margin while in an ETF you get 4:1 at best. Don't forget the best reason to have a BTC ETF: a futures options market.

[oksgvardukraine2018]

Asset Manager Bitwise Files for a Top-10 Cryptocurrency Exchange Traded Fund

Bitwise, a prominent cryptocurrency index fund, has filed with the U.S. Securities and Exchange Commission (SEC) to offer a cryptocurrency-based exchange-traded fund (ETF).

In a press release issued on July 24th, the company stated that they intend to create an ETF called “Bitwise HOLD 10 Cryptocurrency Index Fund” which would be tied to the ten largest cryptocurrencies by market capitalization. The index is going to capture about 80% of the total market capitalization of the cryptocurrency market.

Bitwise said that they would use a 5-year-diluted market cap and take several parameters into consideration for eligibility keeping continuously changing supply, liquidity, trade volume concentration, and custody limitations in mind.

The proposal is not in effect yet and would have to be approved by the SEC to be available for trading on traditional stock markets.
https://www.ccn.com/asset-manager-bitwise-files-for-a-top-10-cryptocurrency-exchange-traded-fund/

[Visteryy]

The reason why ETFs are used is that they contain assets of a kind or mix that individual investors can't easily buy on their own. It is much easier for most people to buy a bitcoin than a share in an ETF, so there's no point in creating one.

These purchases and investments are not simply made by themselves. Certainly there is support from the back to protect them, or possibly joint capital. However, this is not an important issue, it is important to exist in the market and be trusted by the investor community. This is the core point to discuss with each other.

[BitOffer.EN]

I have heard the Bitoffer News on the website. Lucian, Bitoffer’s chief analysts, has said that not only the domestic market is keen on ETFs, but also in overseas markets. According to the British Financial Times, there is currently a strong demand for ETF products in Europe, and with the surge in Bitcoin fund assets, people are eager for cryptocurrencies. It's also very strong.

iI have my own experience. Take BitOffer’s ETF Fund to be an example. Its transaction is simple and clear, you can buy up and buy down. The investors buy and hold on increasing. The increasing rate of BitCoin is so large. But it can gain high profits for about 3 times to 17 times. Buy the ETF Fund.

[Hydrogen]

Topic: Since bitcoin is a "virtual commodity", why not create a bitcoin exchange traded fund (ETF)? You could make 1 ETF share represent 1 BTC. If someone could successfully do this it would certainly help with regard to exchanging BTC for fiat currencies. Discuss amongst yourselves.

The Winklevoss twins proposed crypto ETFs in the USA since 2017 or earlier. Their application was denied by the SEC each time. Crypto ETFs are illegal in the USA. Although AFAIK they are legal in europe and elsewhere in the world.

One aspect to ETFs in crypto is their off chain approach potentially being fractional. They might report holding 20 bitcoins, while in reality they only hold 2. They can operate under the assumption that all of their buyers will not attempt to cash out at the same time, and so they only need to hold a fraction of their depositors money in reserve. This is a criticism which has been made of gold and silver ETFs in the past. Where ETFs have been blamed for market prices being undervalued.

OP's post makes me wonder what happened to all of those crypto pyramid schemes that used to be common. The term ETF is used but I have a feeling what you're describing would look more like a pyramid scheme in the end.

[Kong Hey Pakboy]

I think I have heard of something similar awhile ago, if I remember correctly it was JP Morgan that was offering these kind of ETF but it was full of holes and a lot of personal finance Youtuber do not like it because you basically don't own any bitcoin and the head of JP Morgan is also an avid opposition with bitcoin meaning that he is a hypocrite trying to say that bitcoin is bad and at the same time trying to make money out of it.

[Mauser]

I think I have heard of something similar awhile ago, if I remember correctly it was JP Morgan that was offering these kind of ETF but it was full of holes and a lot of personal finance Youtuber do not like it because you basically don't own any bitcoin and the head of JP Morgan is also an avid opposition with bitcoin meaning that he is a hypocrite trying to say that bitcoin is bad and at the same time trying to make money out of it.

I think the Winklevoss twins (famous from the Facebook idea and the movie) were one of the first ones to make an Bitcoin ETF. They were already rich from Facebook but made even more money this way. The idea is pretty nice, you don't need have to an actual bitcoin wallet or pay the high transaction fees of buying them. I like ETF for all type of asset classes, cheap and efficient.