How the Bitcoin ETF could actually tank Bitcoin's market value

[legiteum]

I'm just going to throw a contrarian view out here for discussion...

What if, by positioning Bitcoin as a serious investment that is judged along side other investments in companies, real estate, hard commodities, bonds, and so on, that the scrutiny actually diminishes Bitcoin's appeal?

Bitcoin is now having a very strong light shined upon it. In a sense, it's being exposed to daylight for the first time, no longer being in the shadow realm of boutique techie investors like it has been.

What happens when "mainstream" investors find out that Bitcoin isn't really a viable mainstream currency, and that it's really only useful as a meme investment instrument with no inherent value beyond its own name? What happens when they find out that the "decentralized" thing is just a myth, and that, in actual reality, almost nobody uses Bitcoin (or any other cryptos) that way? What if the "serious" investment managers discover that the mythology behind Bitcoin is just... mythology?

What happens, in short, when Bitcoin ventures outside of its tight community of enthusiastic anarcho-libertarians--who desperately want Bitcoin to succeed for geopolitical reasons--and it is instead evaluated, coldly, like any other investment by people who don't have that political agenda?

And what if the first impression of millions of mainstream potential investors in Bitcoin is that it's just a super-volatile asset that only seems to go down in price?

[cryptoaddictchie]

What happens when "mainstream" investors find out that Bitcoin isn't really a viable mainstream currency, and that it's really only useful as a meme investment instrument with no inherent value beyond its own name? What happens when they find out that the "decentralized" thing is just a myth, and that, in actual reality, almost nobody uses Bitcoin (or any other cryptos) that way? What if the "serious" investment managers discover that the mythology behind Bitcoin is just... mythology?

Well as starter they have technology its called blockchain and thats not just a meme coin like others. If they found it not so attractive they thry could leave right? Even theyre gone theres still a lot of other institutions interested. Even without etf bitcoin manage to go up to level of 60k without them on the ride so this will continue rven without them. Yheres a lot of investors like the design of bitcoin so this wouldnt happened.

[criptoevangelista]

Bitcoin is not an investment, bitcoin is a hedge and is an alternative to the traditional financial system, the traditional financial system will never cease to exist. Everyone who participates in this movement should know this.

Bitcoin has brought countless advantages to those who use it, and fundamentally speaking it is capable of replicating social scalability, something rare these days.


Apparently, the OP completely ignores the solid fundamentals that the currency has and all the revolutionary technology that makes it work.

[kryptqnick]

Companies have been trying to get an ETF approval for many years, so there's been a lot of time to put Bitcoin under scrutiny. I think that this market just opens up new opportunities, makes Bitcoin attractive to investors who deal with traditional investments like those the op mentioned. Bitcoin will remain appealing to all those who were with it before the ETF approval, and it can start being appealing to new people. Some might shy away from it, but that's not a problem.
Decentralization isn't a myth, Bitcoin isn't a meme investment, so the risk of that disenchantment happening seems low to me.

[avikz]

I am not worried about Bitcoin ETF itself, rather more concerned about the company that runs the ETF. Let's keep all these debates around decentralized ecosystem and geo-political situations a side. But unfortunately the world's largest asset holder has got the approval to run Bitcoin ETF. They have so much financial power, they can indeed really manipulate the market.

Just ask a simple question - why the Bitcoin price didn't increase after ETF approval? Who's behind this? BlackRock controls a lot of things. Bitcoin should not be controlled by them.

[legiteum]

What happens when "mainstream" investors find out that Bitcoin isn't really a viable mainstream currency, and that it's really only useful as a meme investment instrument with no inherent value beyond its own name? What happens when they find out that the "decentralized" thing is just a myth, and that, in actual reality, almost nobody uses Bitcoin (or any other cryptos) that way? What if the "serious" investment managers discover that the mythology behind Bitcoin is just... mythology?

Well as starter they have technology its called blockchain and thats not just a meme coin like others. If they found it not so attractive they thry could leave right? Even theyre gone theres still a lot of other institutions interested. Even without etf bitcoin manage to go up to level of 60k without them on the ride so this will continue rven without them. Yheres a lot of investors like the design of bitcoin so this wouldnt happened.

Yes, but what actual value does blockchain serve? Technologies like blockchain have come and gone through the years, and blockchain doesn't have any verified technical uses besides cryptocurrencies and NFTs.

And yes, there are a lot of investors who love Bitcoin, blockchain, and so on--obviously, since Bitcoin is worth hundreds of billions. But what if the rest of the world isn't interested in this technology as an end in itself and just looks at Bitcoin and blockchain in purely practical terms?

I agree there's probably a price floor somewhere for Bitcoin, but it could be a lot lower than the current price...

Bitcoin is not an investment, bitcoin is a hedge and is an alternative to the traditional financial system, the traditional financial system will never cease to exist. Everyone who participates in this movement should know this.

Bitcoin has brought countless advantages to those who use it, and fundamentally speaking it is capable of replicating social scalability, something rare these days.


Apparently, the OP completely ignores the solid fundamentals that the currency has and all the revolutionary technology that makes it work.

Um, if it's an ETF, it's not an "alternative" anymore, it's actually a mainstream investment. That was the whole point  .

And if your pitch to main street USA investors is that Bitcoin is, "capable of replicating social scalability", well, I'm going to bet that pitch doesn't... persuade a lot of people .

[coolcoinz]

Bitcoin is now having a very strong light shined upon it. In a sense, it's being exposed to daylight for the first time, no longer being in the shadow realm of boutique techie investors like it has been.

Are you sure about that? If this is the first time it's in the spotlight, how will you describe the opening of bitcoin futures in 2018?
What about acceptance in El Salvador? What about that short time when Musk was promoting it, or the investment that Microstrategy made?

What happens when "mainstream" investors find out that Bitcoin isn't really a viable mainstream currency,

It never was a viable mainstream currency. In fact, bitcoin never was a mainstream investment, which is proven by the amount of people who own it. If you ask around, maybe 1 out of 10 people you know will hold bitcoin, probably even less than that. Is that mainstream?

What happens when they find out that the "decentralized" thing is just a myth,

It's not and the fact that a certain amount, for instance 10% of it will be held by ETFs doesn't make it centralized.

What happens, in short, when Bitcoin ventures outside of its tight community of enthusiastic anarcho-libertarians

It has already done that long ago. Do you think Wall Street wasn't involved in bitcoin trading in 2019?

[legiteum]

What happens, in short, when Bitcoin ventures outside of its tight community of enthusiastic anarcho-libertarians

It has already done that long ago. Do you think Wall Street wasn't involved in bitcoin trading in 2019?

You make good points. Maybe all of the downsides of the ETF I listed here have been priced in already.

I would think that the ETF moves the "serious investor" scrutiny way, way up, but... maybe I'm wrong about that? We'll see.

[kentrolla]

Not sure if you really understand why Bitcoin was created because it was never created as an investment medium or mainstream product, understand one thing that Bitcoin was created as an alternative for P2P transactions without involvement of any third party. It's people who made it investment scheme and that's not the reason why Bitcoin was created. Hence I would like to conclude it doesn't matter of what potential investor thinks because a true Bitcoin enthusiast is more concerned about anonymity rather than investment or returns.

[buwaytress]

Too late. The unexpected dip already means yours is not a contrarian opinion. Can't tell you how many pings I'm seeing now about similar what ifs.

The true contrarian has always disliked any supposed boon for Bitcoin that involves speculation and not owning your keys.

[legiteum]

Not sure if you really understand why Bitcoin was created because it was never created as an investment medium or mainstream product, understand one thing that Bitcoin was created as an alternative for P2P transactions without involvement of any third party. It's people who made it investment scheme and that's not the reason why Bitcoin was created. Hence I would like to conclude it doesn't matter of what potential investor thinks because a true Bitcoin enthusiast is more concerned about anonymity rather than investment or returns.

I understand very well why it was created, but... that's not how it evolved. Today, almost all Bitcoin transactions have a third party involved because almost no mainstream investors physically hold their own private key. It's certainly possible Bitcoin could be used that way, but it mostly isn't, and the reason for that is that most people don't care about "centralized" and "decentralized" and don't even know what that means. To most investors today, Bitcoin is nothing more than the word, "Bitcoin".

And it doesn't matter what potential investors think... unless you are talking about the market price of Bitcoin. I am not trying to say here that Bitcoin is worthless, or that it's price will go to zero, only that the current price depends on a mass appeal which could evaporate because of the attention the ETF is bringing.

Also, you understand Bitcoin isn't great for anonymity, right?   

[legiteum]

Too late. The unexpected dip already means yours is not a contrarian opinion. Can't tell you how many pings I'm seeing now about similar what ifs.

The true contrarian has always disliked any supposed boon for Bitcoin that involves speculation and not owning your keys.

Touché!

But my scenario here wouldn't portend a small drop like it's seen in the past few days, but rather a huge drop like it saw 18 months ago, or maybe much more. My thesis here is that the current price is based on the perception that Bitcoin has mass appeal, and when the market finds that it doesn't, it would correct to a much, much lower level.

[The Cryptovator]

Do you think institutional investors don't know what Bitcoin is and how it works? Everyone knows who is involved with Bitcoin; it's a piece of code that exists only virtually. Therefore, they are investing in it. It's true that Bitcoin isn't backed by any centralised organisation; it's backed by the biggest community worldwide. We already consider Bitcoin an investment asset, but the goal was to create a decentralised financial system.

[legiteum]

Do you think institutional investors don't know what Bitcoin is and how it works? Everyone knows who is involved with Bitcoin; it's a piece of code that exists only virtually. Therefore, they are investing in it. It's true that Bitcoin isn't backed by any centralised organisation; it's backed by the biggest community worldwide. We already consider Bitcoin an investment asset, but the goal was to create a decentralised financial system.

I can almost guarantee that nearly all Institutional investors... don't know what a private key is, nor would they want to.

Bitcoin's goal of creating a decentralized financial system... failed. It doesn't do that in any mainstream way. In actual reality, it's mostly just a meme investment.

[thecodebear]

I'm just going to throw a contrarian view out here for discussion...

What if, by positioning Bitcoin as a serious investment that is judged along side other investments in companies, real estate, hard commodities, bonds, and so on, that the scrutiny actually diminishes Bitcoin's appeal?

Bitcoin is now having a very strong light shined upon it. In a sense, it's being exposed to daylight for the first time, no longer being in the shadow realm of boutique techie investors like it has been.

What happens when "mainstream" investors find out that Bitcoin isn't really a viable mainstream currency, and that it's really only useful as a meme investment instrument with no inherent value beyond its own name? What happens when they find out that the "decentralized" thing is just a myth, and that, in actual reality, almost nobody uses Bitcoin (or any other cryptos) that way? What if the "serious" investment managers discover that the mythology behind Bitcoin is just... mythology?

What happens, in short, when Bitcoin ventures outside of its tight community of enthusiastic anarcho-libertarians--who desperately want Bitcoin to succeed for geopolitical reasons--and it is instead evaluated, coldly, like any other investment by people who don't have that political agenda?

And what if the first impression of millions of mainstream potential investors in Bitcoin is that it's just a super-volatile asset that only seems to go down in price?

huh?? Since when is Bitcoin not a viable currency and has no value and is a meme token and isn't decentralized and is only used by anarcho-libertarians and since when did Bitcoin enter back into only being in the "shadow realm of boutique techie investors" that it fully exited a good 7 years ago?

Literally none of those things are true. So I don't even understand why you're asking the question. I guess you're just asking hypothetically what if history was the same but Bitcoin was just a random altcoin instead of Bitcoin?

You're asking if a bunch of false things were actually true and somehow despite Bitcoin having lots of attention of the public and media for 7 years now nobody had realized all these false things were actually true and for some reason the fact that there are ETFs makes everyone realize these false things are true and so nobody wants Bitcoin anymore....ummm okay. That's not a contrarian view, that's just making up a bunch of stuff and asking what would happen in that imaginary world. You are confusing contrarian with imaginary.

[goldkingcoiner]

I'm just going to throw a contrarian view out here for discussion...

What if, by positioning Bitcoin as a serious investment that is judged along side other investments in companies, real estate, hard commodities, bonds, and so on, that the scrutiny actually diminishes Bitcoin's appeal?

Bitcoin is now having a very strong light shined upon it. In a sense, it's being exposed to daylight for the first time, no longer being in the shadow realm of boutique techie investors like it has been.

What happens when "mainstream" investors find out that Bitcoin isn't really a viable mainstream currency, and that it's really only useful as a meme investment instrument with no inherent value beyond its own name? What happens when they find out that the "decentralized" thing is just a myth, and that, in actual reality, almost nobody uses Bitcoin (or any other cryptos) that way? What if the "serious" investment managers discover that the mythology behind Bitcoin is just... mythology?

What happens, in short, when Bitcoin ventures outside of its tight community of enthusiastic anarcho-libertarians--who desperately want Bitcoin to succeed for geopolitical reasons--and it is instead evaluated, coldly, like any other investment by people who don't have that political agenda?

And what if the first impression of millions of mainstream potential investors in Bitcoin is that it's just a super-volatile asset that only seems to go down in price?

You are making many assumptions about Bitcoin which are not true and then asking us what we think about the eventuality of those false assumptions. A lot of "what if" scenarios. There is absolutely no point in asking such questions because you could claim anything, even something as ludicrous as for example: the entire internet might collapse in a few years due to some mysterious cosmic burst of radiation from some far-away galaxy. What would happen to the value of Bitcoin in such a scenario? Would the Blockhain be lost?

All such questions do is create more FUD. Especially during times when Bitcoin is going down.

So lets stick to what we know to be true. Bitcoin ETFs will not be able to "break" Bitcoin. ETF is a net positive for the value stability of Bitcoin.

[cryptoaddictchie]

Yes, but what actual value does blockchain serve? Technologies like blockchain have come and gone through the years, and blockchain doesn't have any verified technical uses besides cryptocurrencies and NFTs.

And yes, there are a lot of investors who love Bitcoin, blockchain, and so on--obviously, since Bitcoin is worth hundreds of billions. But what if the rest of the world isn't interested in this technology as an end in itself and just looks at Bitcoin and blockchain in purely practical terms?

Well if you used that blockchain to real world application then it might help some task or industry move faster. For example uses the blockchain for tax payment but I doubt that since some Politicians might disagree with this due to ehem you know what I meant.

If some doesnt interested then they are not obligated thats why its called decentralized space. But if a certain Governmemt enforce something with the use of blockchain maybe thats gonna be a different story which also mandate people to learn and understand it cause it might be useful now.

[Seal]

What happens, in short, when Bitcoin ventures outside of its tight community of enthusiastic anarcho-libertarians--who desperately want Bitcoin to succeed for geopolitical reasons--and it is instead evaluated, coldly, like any other investment by people who don't have that political agenda?

I like the challenge of a contrarian debate. Consider this, Bitcoin naturally acts as a hedge against existing currencies and asset classes. As centralised currency systems rise and fall (periods of recessions) which economists agree happens in 8-12 year cycles, hedges become important. Protecting against a loss in financial value is not a view thats constrained to a group of as you put 'enthusiastic anarcho-libertarians', its a bi-partisan or nonpartisan (universal) desire that is not constrained by geographical boundaries.

In this scenario, the outcome is universally bullish for Bitcoin as an alternative asset class.

[legiteum]

What happens, in short, when Bitcoin ventures outside of its tight community of enthusiastic anarcho-libertarians--who desperately want Bitcoin to succeed for geopolitical reasons--and it is instead evaluated, coldly, like any other investment by people who don't have that political agenda?

I like the challenge of a contrarian debate. Consider this, Bitcoin naturally acts as a hedge against existing currencies and asset classes. As centralised currency systems rise and fall (periods of recessions) which economists agree happens in 8-12 year cycles, hedges become important. Protecting against a loss in financial value is not a view thats constrained to a group of as you put 'enthusiastic anarcho-libertarians', its a bi-partisan or nonpartisan (universal) desire that is not constrained by geographical boundaries.

In this scenario, the outcome is universally bullish for Bitcoin as an alternative asset class.

Sure, but assets to hedge against currency losses have been around for hundreds of years (commodities, metals, real estate, equities, etc. etc.).

This is exactly what I was trying to say in the OP: now that Bitcoin is "just another investment", it's going to be evaluated along side all of the others, and it's going to need a story about why it's uniquely positioned to outperform other investment instruments that do the same thing. If Bitcoin doesn't do that, it's going to take on a bad reputation.

[franky1]

there is a non-zero bottom with bitcoin (unless the technology broke(code bug))

even if hobby miners cant mine. there is a significant amount of mining farms that are not day players but instead already invested 2 years worth of electric contracts and 2 years of hardware lifetime. so they will mine no matter what..
and they want to break even so they wont sell daily or at a loss, they will just accumulate coin as they dont have daily costs. its all prepaid longterm


this means hashrate wont drop to zero. this also means there is a non zero cost of mining even most efficiently. which everyone on the planet sees as a base rate no one can acquire for less and everyone cant afford to sell for less if they acquired.

everyone will then project their own personal/regional higher costs and if the market is cheap they will be happy to buy bitcoin cheap

this will and does cause a non zero market price support.
yes traders can try to sell large lumps of bitcoin to push the price down, but even they will run out of coin.

the amount that the price can tank is not down to zero (unless bitcoins code was broken)

so these corrections back to value levels. are not "tanking to zero" risk.. but instead temporary discount opportunity

on the other hand PoS coins dont really have any "work" cost of mining.. so PoS coins can tank to zero
especially coins which do not have their own market sentiment but are instead shadow tracing bitcoins price.