Bitcoin ETF

[brainactive]

The SEC are currently reviewing a number of Bitcoin ETF applications from big players like Fidelity.

I don't quite understand the rationale for buying Bitcoin ETF over just Bitcoin itself.

I understand that buying/selling gold ETF is much more convenient that dealing with physical gold so that's one advantage of dealing with ETF. But the same argument doesn't really apply to bitcoin because bitcoin is digital rather than physical so the inconveniences of storing etc don't exist.

Can someone explain who are the target market for Bitcoin ETF and what is their rationale for buying Bitcoin ETF over Bitcoin itself.

[TangentC]

The SEC are currently reviewing a number of Bitcoin ETF applications from big players like Fidelity.

I don't quite understand the rationale for buying Bitcoin ETF over just Bitcoin itself.

I understand that buying/selling gold ETF is much more convenient that dealing with physical gold so that's one advantage of dealing with ETF. But the same argument doesn't really apply to bitcoin because bitcoin is digital rather than physical so the inconveniences of storing etc don't exist.

Can someone explain who are the target market for Bitcoin ETF and what is their rationale for buying Bitcoin ETF over Bitcoin itself.

Rich People that don't want to be bothers with the little person task of securing their bitcoins,
they rather have IT professionals do it.

When you are rich enough to fully enjoy everything the world has to offer,
constantly worrying about where you left your laptop or hardware wallet, is a bother you may decide is not beneficial to you.
Especially when you can vacation and travel anywhere at anytime.

So ETFs are for the Ultra rich that don't want to bother with the small tasks, but do want to profit from BTC.
* Bitcoin ETFs charge insanely high fees, most of the rest of us would never ever use one. *

Kind of how in the US, the majority of upper middle class people don't bother to cut their own yards,
they pay someone else to do it, because they don't want to be bothered with it.

FYI:
I cut my own yard.  


FYI2:
https://www.investopedia.com/investing/bitcoin-etfs-explained/

Why Not Just Invest in Bitcoin?

If a bitcoin ETF merely mirrors the price of the cryptocurrency itself, why bother with the middle man?
Why not just invest in bitcoin directly?   There are several reasons for this.
First, as indicated above, investors don't have to bother with the security procedures associated with holding bitcoin and other cryptocurrencies. Further, there is no need to deal with cryptocurrency exchanges in the process—investors can just buy and sell the ETF through traditional exchanges and markets.

There is another crucial benefit to focusing on a bitcoin ETF rather than on bitcoin itself.
Because the ETF is an investment vehicle, investors would be able to short sell shares of the ETF if they believe the price of bitcoin will go down in the future.  This is not something that can be done in the traditional cryptocurrency market.

You can short sell bitcoin ETF shares if you believe the price of the underlying asset will go down—an advantage you won't find by investing in bitcoin itself.
 

[brainactive]

Rich People that don't want to be bothers with the little person task of securing their bitcoins,
they rather have IT professionals do it.

When you are rich enough to fully enjoy everything the world has to offer,
constantly worrying about where you left your laptop or hardware wallet, is a bother you may decide is not beneficial to you.
Especially when you can vacation and travel anywhere at anytime.

So ETFs are for the Ultra rich that don't want to bother with the small tasks, but do want to profit from BTC.
* Bitcoin ETFs charge insanely high fees, most of the rest of us would never ever use one. *

Kind of how in the US, the majority of upper middle class people don't bother to cut their own yards,
they pay someone else to do it, because they don't want to be bothered with it.

FYI:
I cut my own yard.  

There are custodian services available (e.g. through Coinbase Prime) that don't require you to hold your own cold storage wallet.

High net worth individuals or institutions use Coinbase Prime which obviates the need for Bitcoin ETFs. Is there something else I'm missing?

[TheUltraElite]

I don't quite understand the rationale for buying Bitcoin ETF over just Bitcoin itself.

Owning an asset and owning its ETF is a different thing. By owning something and that something becomes illegal tomorrow, the fund might end up being blacklisted but owning the ETF, they might not fall in that problem.

Can someone explain who are the target market for Bitcoin ETF and what is their rationale for buying Bitcoin ETF over Bitcoin itself.

Financial institutions, not retail investors like you and me.

The rationale is that if you have to buy bitcoin, you also have to keep it safe from getting stolen. For buying the ETF, you can trade it without having to worry about keeping the asset safe during holding period. Same with Gold ETF if you have had experience with that you would know.

There are both pros and cons of both methods, but one thing is for sure, if ETFs get started and exchanges start selling them as product, retail investors will also flock in. This will have a positive impact from the governments on crypto, the same reason why the ETF craze a few years back died out and now is starting again. Lets see how much mainstream attention this gains.

[brainactive]

I don't quite understand the rationale for buying Bitcoin ETF over just Bitcoin itself.

Owning an asset and owning its ETF is a different thing. By owning something and that something becomes illegal tomorrow, the fund might end up being blacklisted but owning the ETF, they might not fall in that problem.

Can someone explain who are the target market for Bitcoin ETF and what is their rationale for buying Bitcoin ETF over Bitcoin itself.

Financial institutions, not retail investors like you and me.

The rationale is that if you have to buy bitcoin, you also have to keep it safe from getting stolen. For buying the ETF, you can trade it without having to worry about keeping the asset safe during holding period. Same with Gold ETF if you have had experience with that you would know.

There are both pros and cons of both methods, but one thing is for sure, if ETFs get started and exchanges start selling them as product, retail investors will also flock in. This will have a positive impact from the governments on crypto, the same reason why the ETF craze a few years back died out and now is starting again. Lets see how much mainstream attention this gains.

Custodian services through Coinbase Prime solve the storage issue as well.

Why would financial institutions want ETFs rather than use Coinbase Prime? Based on your first statement, you seem to be suggesting that the main reason is financial institutions might be worried bitcoin might be outlawed in the future and by investing through ETFs they won't be blacklisted. If bitcoin does become illegal, I don't think the law would be imposed within the same day that it is announced. Financial institutions holding the ETF can sell it (as they probably would if they held BTC in Coinbase Prime). So I don't see the difference still.

[TheUltraElite]

Why would financial institutions want ETFs rather than use Coinbase Prime?

Their choice? Maybe they already are doing that but they wish to improve their odds of getting more returns and hence twisting the SEC to start new markets for them.

Based on your first statement, you seem to be suggesting that the main reason is financial institutions might be worried bitcoin might be outlawed in the future and by investing through ETFs they won't be blacklisted. If bitcoin does become illegal, I don't think the law would be imposed within the same day that it is announced. Financial institutions holding the ETF can sell it.

Correct, if they get outlawed, the institutions will feel much more at ease selling off ETFs rather than bitcoins itself. Someones sees a big bank selling BTC after it gets outlawed, the media will not like it at all. Getting the wind? They want their money "insured" by owning ETF and not BTC directly.

However the bigger thing is retail acceptance too, once SEC starts ETFs for institutions, smaller traders will also want to join, bigger whales will dump and make the money there. That is what they are targeting and also the security issue of having to store bitcoins in wallets.

Now I dont use CB or its services so I cant comment on that, but this is my point of view. Yours might vary, which also makes sense.

[o_e_l_e_o]

There are loads of reasons people might prefer an ETF over bitcoin itself. If you are a boomer who has been trading in ETFs for years, why would you want to learn another technology and all the risks it brings when you can just phone up your bank/broker/whoever and say "Buy me some bitcoin ETF". Some countries give much more favorable tax allowances to ETFs than they do to bitcoin, and some countries allow you to put them in retirement accounts or investment vehicles and trade them tax free altogether.

People who are interested in ETFs by and large don't care about owning their own coins, the fundamentals of bitcoin, or even the reason bitcoin exists. They just want price exposure.

[DooMAD]

Chances are, if you're reading this and you came here to learn how Bitcoin actually works, an ETF isn't the right option for you.  They're intended for a different audience.  'Traditional Finance' has some sort of collective neurological disorder where they have an overwhelming and unrelenting compulsion to have all the fingers in all the pies.  They can't help themselves but to find a way to get onboard.  And for them, this is one of the few ways they can do it.  So they're going to play with some IOUs like they always do.  It's the only thing they can comprehend.

You have a better option.  You don't have to play with IOUs.  You can have the real thing.  

[btc-room101]

The SEC are currently reviewing a number of Bitcoin ETF applications from big players like Fidelity.

I don't quite understand the rationale for buying Bitcoin ETF over just Bitcoin itself.

I understand that buying/selling gold ETF is much more convenient that dealing with physical gold so that's one advantage of dealing with ETF. But the same argument doesn't really apply to bitcoin because bitcoin is digital rather than physical so the inconveniences of storing etc don't exist.

Can someone explain who are the target market for Bitcoin ETF and what is their rationale for buying Bitcoin ETF over Bitcoin itself.

Why buy an ETF when you can just buy GME? Why buy GOLD(ETF) when you can just buy the real thing.

Well to explain it to you is because most people are too stupid to buy the real thing, they would rather sit on their ass and dongle their mobile phone, and buy something with liquidity, of course the seller makes out like a bandit, because they're selling 'IOU's" not the real thing, they can pull BTC-ETF's out of their arse, and sell them to you. This is the stock-market scam.

Lastly, people like to diversify, but also liquidity is a bring problem in crypto, the btc-etf makes it easy to go cash to btc and back to cash. Right now you go USDT to btc back to USDT most people know this is a scam bound to fail, when the SHTF; The downside of ETF's is they lose real value in time, they go up slower than the real thing, and they fall faster than the real thing, but they do offer diversification. Also pension funds need to have liquidity.

I think the most important take-away is that ETF's let these big-companys make a ton of money, without actually buying anything, just like "GOLD" ETF, they don't have gold, in fact they trade 100x, e.g. they buy-sell 100x more paper-contracts than gold they hold, its all a scam,

but the entire western financial system is all a scam, which is why we have 'real bitcoin'.

[btc-room101]

Chances are, if you're reading this and you came here to learn how Bitcoin actually works, an ETF isn't the right option for you.  They're intended for a different audience.  'Traditional Finance' has some sort of collective neurological disorder where they have an overwhelming and unrelenting compulsion to have all the fingers in all the pies.  They can't help themselves but to find a way to get onboard.  And for them, this is one of the few ways they can do it.  So they're going to play with some IOUs like they always do.  It's the only thing they can comprehend.

You have a better option.  You don't have to play with IOUs.  You can have the real thing.  

Crypto has the same king of 'scammers' at the wheel, which is why we have tokens, defi's, and smart-contracts, ... endless novelty's, anything talked about but the real thing, which  of course is boring and not profitable for the scammers.

If I can pull "IOU's" out of my arse, and sell them to suckers; then why would you not expect a ton of ETF's for crypto to flourish, the SEC is just a gate-keeper, they decide who gets to be rich, and who doesn't; Its called a 'circle-jerk' then entire wall-street club/family is a circle-jerk of scammers selling worthless paper to the morons ( pensioners, inverstors, and the gullible )

But then most of the crypto world is also a circle-jerk of scammers trying to sell their bile to noobs

Sure why not just by BTC for cash and be done with it? Well because its boring, and it there is nobody there to hold your hand. Most people are poor, and they need confirmation, they need someone to lead them to the toilet since birth.

I would never buy ETF gold, or ETF crypto, why? But I have a choice, but lots of people have no choice, also the taxes are a big problem for the old-farts, they know that Fidelity&Schwab will automatically take care of all these 'headaches'

All big companys are always looking for new revenue sources, its just normal, and they must make appearances otherwise the young will see them as 'not with it';

Lastly, most sad of all is that BTC was designed to get out of the fake paper world (FIAT), and this high-way to hell BTC-ETF is just a paper fiat version of bitcoin, where the IOU's can be sold 100x, just like fiat bankers do borrow $1 and loan out $100;

Then just like GOLD, when 100x paper trades over the real thing, then the GOV can control the price; so eventually they will control the price of BTC, just like they do Real-Gold.