Shower thought. Bitcoin ETF bad?

[leftgirly]

The ETF agreement is just one of those initiatives that can easily help maintain the price of bitcoin at an appreciable level. Imagine a company guaranteeing your property without causing any financial commitment from your end. Basically, that is the idea behind ETF, I don't think this means a third party would be given the power  to control bitcoin on the market.

[Leonardo7]

Not everyone definitely will subscribe to  ETF, but everyone has their choice to make, it entirely boils to an individual on how they use their money. I personally hate a third party holding my money for me, but still, if this will bring more liquidity to the market it's okay.

[prix]

The ETF is the way for users who cann't or don't want to understand the details of crypto. And for users of those countries where the crypto is in the gray zone or is banned (at least I know I person which wait ETF for that). In this case there will be no problems with the buying, nor with the selling, nor with the taxes.

[GreatArkansas]

The ETF agreement is just one of those initiatives that can easily help maintain the price of bitcoin at an appreciable level. (....)

But do you consider the being decentralized of Bitcoin? Like if you do that ETF things, you are actually buying a Bitcoin but not actually owning it, it's just like you will escape the actual trading and owning of Bitcoin.
And for me, I don't think ETF can drive the price or Bitcoin at an 'appreciable level'.

[fullhdpixel]

Shouldn't the communty discourage the creation of anything that gives up the custody of Bitcoin to third parties?

Although it might be good for its price, would it be good for Bitcoin as a censorship-resistant hard money?

With ETF, we are just indirectly giving chance to centralization of cryptocurrency which we should really discourage because there won’t be any difference from all the system that we have on ground already if we still use cryptocurrency in a centralized way. The reason why we have been so all over bitcoin is because it gave us freedom and one sense of ownership to our money and to our transaction, so why on earth would we give that out to ETF.

Sometimes when I see how we encourage and push for ETF, I really wonder if some of us really understand what cryptocurrency is about and what decentralization stands for. Well, one thing that we know is that even if ETF is being approved, it would still not stop bitcoin from being a decentralized coin which is what people want the most.

[jseverson]

Sometimes when I see how we encourage and push for ETF, I really wonder if some of us really understand what cryptocurrency is about and what decentralization stands for. Well, one thing that we know is that even if ETF is being approved, it would still not stop bitcoin from being a decentralized coin which is what people want the most.

The thing is though, most Bitcoin holders will probably ignore any ETF despite clamoring for it. All it means for them is more money in the market, and Bitcoin being legitimized as an asset class to some extent.

It would then come down to context as to whether it's bad or not. Is it bad to hold? For experienced Bitcoiners, that's almost certainly a yes. Actually holding coins is going to be better for just about every purpose. Is it bad for the market? It could be, but the opposite is also very possible, if not more probable.

At the end of the day, no ETF is going to affect Bitcoin itself, so I'm personally not against it. It may be bad for corporations to stock up on huge amounts of coins, but they're free to do just that anyway, ETF or no ETF.

[ololajulo]

I got reservation for the ETF, maybe we might not need it anyway. I thought it could help in this current market to bring new investment from institution but the recent ETF is not a true representative of what we want. Just like adding a document with crypto name in SEC file. They request for a good sum of money from investors with no chance for investors with bitcoin crumbs.

[squatter]

At the end of the day, no ETF is going to affect Bitcoin itself, so I'm personally not against it. It may be bad for corporations to stock up on huge amounts of coins, but they're free to do just that anyway, ETF or no ETF.

It may not affect the protocol, but it can certainly affect the price. The trustee would issue and redeem shares based on market demand, meaning an ETF could conceivably lead the rest of the market due to arbitrage forces. The same goes for Bakkt or any other physically delivered bitcoin contracts. Plus, ETF shares can be short sold. When I strap on my tin foil hat, I can see some scenarios where Wall Street keeps a lid on bitcoin prices through these avenues, the same way they supposedly do with gold.

[Wind_FURY]

The freedom to do what one wants with one's bitcoins necessarily includes the freedom to give custody of them to a third party. Some (such as those who are unwilling or unable to safely manage their own private keys) will find such an arrangement beneficial. And some will not benefit from such an arrangement, and choose not to use it. That's what freedom means.

But what about if Bitcoin custodial services, and exchanges, cartelize then form an agreement with each other that would be possible for them to censor transactions.

Should the community encourage everyone their right of "freedom" to let your Bitcoins in be in custody of a third party?

[Kakmakr]

The way that Bakkt is doing it with the warehouse, might be the best way of doing it. A Bitcoin ETF must be backed by actual bitcoins and the ideal scenario would be for the owners of those coins to have sole access to the Private keys for those coins.

I can understand that institutional investors would want to avoid having the hassle of dealing with the safekeeping of coins and wallets and such, so they would pay a third party to do it on their behalf. The risk is much lower for them to invest in Bitcoin then and it is backed by actual bitcoins. 

[Wind_FURY]

The way that Bakkt is doing it with the warehouse, might be the best way of doing it. A Bitcoin ETF must be backed by actual bitcoins and the ideal scenario would be for the owners of those coins to have sole access to the Private keys for those coins.

I can understand that institutional investors would want to avoid having the hassle of dealing with the safekeeping of coins and wallets and such, so they would pay a third party to do it on their behalf. The risk is much lower for them to invest in Bitcoin then and it is backed by actual bitcoins. 

Then the actual point. "Is allowing the custody of Bitcoin to institutional third parties, without thinking of the consequences, good or bad?"

[mk4]

And for me, I don't think ETF can drive the price or Bitcoin at an 'appreciable level'.

I don't know why a lot of people think that a bitcoin ETF will make bitcoin rise in price either. Not saying that a price rise won't happen, because an ETF can give bitcoin a lot of legitimacy in the eyes of the masses, but it's just like any other open market whereas people can long or short bitcoin. In fact, it's also really possible that an ETF would drop bitcoin's price. In the end, it still, as always, boils down to supply and demand.

Then the actual point. "Is allowing the custody of Bitcoin to institutional third parties, without thinking of the consequences, good or bad?"

Could be either. ETFs will be used by people who doesn't care about financial freedom/sovereignty but only cares on the speculative aspect(whether bullish or bearish) of bitcoin.

[figmentofmyass]

I can understand that institutional investors would want to avoid having the hassle of dealing with the safekeeping of coins and wallets and such, so they would pay a third party to do it on their behalf. The risk is much lower for them to invest in Bitcoin then and it is backed by actual bitcoins. 

Then the actual point. "Is allowing the custody of Bitcoin to institutional third parties, without thinking of the consequences, good or bad?"

we're in no position to allow or disallow it, so it's a moot point. wall street wants it, and it's up to the SEC. and once they allow ETFs it's also not our business if people/institutions want to trust third parties. it's just like today with so many people using exchanges as wallets. it makes me shake my head, but what am i supposed to do about it?

people usually need to get burned a couple times before learning how important being your own bank really is.

[Wind_FURY]

I can understand that institutional investors would want to avoid having the hassle of dealing with the safekeeping of coins and wallets and such, so they would pay a third party to do it on their behalf. The risk is much lower for them to invest in Bitcoin then and it is backed by actual bitcoins.  

Then the actual point. "Is allowing the custody of Bitcoin to institutional third parties, without thinking of the consequences, good or bad?"

we're in no position to allow or disallow it, so it's a moot point. wall street wants it, and it's up to the SEC. and once they allow ETFs it's also not our business if people/institutions want to trust third parties. it's just like today with so many people using exchanges as wallets. it makes me shake my head, but what am i supposed to do about it?

Then, I bring forth the question, "Can Bitcoin be considered a "failure", if the majority of all coins were held by third-party custodians?"

[DooMAD]

I can understand that institutional investors would want to avoid having the hassle of dealing with the safekeeping of coins and wallets and such, so they would pay a third party to do it on their behalf. The risk is much lower for them to invest in Bitcoin then and it is backed by actual bitcoins.  

Then the actual point. "Is allowing the custody of Bitcoin to institutional third parties, without thinking of the consequences, good or bad?"

we're in no position to allow or disallow it, so it's a moot point. wall street wants it, and it's up to the SEC. and once they allow ETFs it's also not our business if people/institutions want to trust third parties. it's just like today with so many people using exchanges as wallets. it makes me shake my head, but what am i supposed to do about it?

Then, I bring forth the question, "Can Bitcoin be considered a "failure", if the majority of all coins were held by third-party custodians?"

Well there's certainly a great deal of room for personal opinion on that one, heh.

If it did happen (and I find it pretty unlikely), I'd say it depends on how much trust it would require from those of us not utilising their services.  If they started leveraging their influence and pushing for protocol changes, I probably would consider it a failure.

[figmentofmyass]

we're in no position to allow or disallow it, so it's a moot point. wall street wants it, and it's up to the SEC. and once they allow ETFs it's also not our business if people/institutions want to trust third parties. it's just like today with so many people using exchanges as wallets. it makes me shake my head, but what am i supposed to do about it?

Then, I bring forth the question, "Can Bitcoin be considered a "failure", if the majority of all coins were held by third-party custodians?"

probably yes. but IMO it wouldn't be a failure of bitcoin's design so much as a failure of humans to properly use it.

i still worry that bitcoin is before its time. people are so driven by convenience. the natural tendency for newcomers (and even some old hands!) is to use a third party custodian. i don't know how that cycle will be broken. maybe people can only grasp the importance of being their own bank by experiencing severe custodial losses first.

[Ucy]

The freedom to do what one wants with one's bitcoins necessarily includes the freedom to give custody of them to a third party. Some (such as those who are unwilling or unable to safely manage their own private keys) will find such an arrangement beneficial. And some will not benefit from such an arrangement, and choose not to use it. That's what freedom means.

People can actually do whatever they want with their bitcoins, including giving them to banks. This however has disadvantages and advantages...    There is the risk of complacency. Most people could begin to prefer the easy-to-use things in Crypto while the "real things" struggle to compete. There is also the possibility that real things will  become criminalized for operating outside the law

[franky1]

the word "custodian" keeps popping up in this topic. and it makes me laugh

custodian is someone put in to look after something/someone. but doesnt own the property.
a school custodian is just the maintenance man
a police custodian just checks the arrested suspects dont escape and dont harm themselves or others
but does not own the person/asset.

in an ETF the company buys the bitcoins and its the companies property. they are not custodians. they are businesses with assets / collateral.
what ETF customers are buying are shares. they are not buying real bitcoins, just common stock shares

if WindFury was trying his hardest to get to a point. it would be worded more like
does offering common shares to the fiat financial industry to allow them to bet on the bitcoin price legitimately have more benefits than the risks of majority ownership of the circulation of bitcoin being owned by corporations.

[figmentofmyass]

in an ETF the company buys the bitcoins and its the companies property. they are not custodians. they are businesses with assets / collateral.
what ETF customers are buying are shares. they are not buying real bitcoins, just common stock shares

the ETF trustee still has to custody the bitcoins that form the basis for share creation, and investors can redeem blocks of shares from them for real bitcoins. that's who people are referring to.

i'm not sure why this distinction matters. when you buy "bitcoins" on an exchange, or a futures contract that supposedly settles in bitcoin, these are also essentially just IOUs that carry counterparty risk. the biggest risk with ETF investment is the same one as holding your coins on an exchange---you are trusting that account balances can be redeemed for real bitcoins.

[rodel caling]

Shouldn't the communty discourage the creation of anything that gives up the custody of Bitcoin to third parties?

Although it might be good for its price, would it be good for Bitcoin as a censorship-resistant hard money?

Depends on how people understand well about ETF regulations, because a lot of the cyrpto holders since from the beginning of the proposal if  iam not wrong is against into ETf regulation to control crypto currency as independent digital currency and the bad result of ETF bcrto is undressed by the government their price value, but until now their nothing comfirmation about etf status approval. Meaning no need to worry all abput etf issue until the government not approve.