Just bought FBTC in my 401k. First time ever holding crypto for retirement.

[fenican]

I have a feeling that the wide availability of Bitcoin ETFs will herald one of the longest and most stable bull markets for Bitcoin that we have seen to date. I've always invested in BTC using a private wallet but with Fidelity's offering I feel fairly safe and confident putting a portion of my 401k into it. I had to check a few boxes that I accept the risk but other than that Fidelity authorized the transaction.

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[ImThour]

Sounds good, if there are more people investing in Bitcoin, However as I have always said, I would love if people could directly invest in the Bitcoin and try to own the actual stuff rather than just buying it in some form of ETFs. I understand that there might be some benefits for buying ETFs which I do not understand or know of, but I would simply purchase Bits directly. Retirement plan is a must!

[Stepstowealth]

Just by being a consistent member of this forum, you can learn how bitcoin works And also understand the risk involved so that you can directly invest in Bitcoin and understand what you are getting into so that your investment in Bitcoin will be one that has a good testimony at the end. By only owning ETF's, you are not going to really enjoy the full benefits of bitcoins like the privacy and self custody, you still will have to pay maintenance fees which somehow is not different from the regular bank charges always complained about.

[PrivacyG]

Sounds good, if there are more people investing in Bitcoin, However as I have always said, I would love if people could directly invest in the Bitcoin and try to own the actual stuff rather than just buying it in some form of ETFs. I understand that there might be some benefits for buying ETFs which I do not understand or know of, but I would simply purchase Bits directly. Retirement plan is a must!

Pretty much this.  What is the point really.  I get there is a financial benefit and profit you could earn but this removes all the fun and purpose of Bitcoin to replace it with hope for a profit.  It makes no sense to me.  Bitcoin offers an opportunity to financial freedom like never before.  And experiencing that is the most fun part of it.

[bitzizzix]

Investing in ETFs compared to Bitcoin actually has disadvantages such as freedom and Bitcoin we cannot control completely. And investing in an ETF means we don't own the underlying asset directly, in this case bitcoin. This means you lose certain benefits, such as the ability to spend our bitcoins directly and some other points. As is usually done with our own Bitcoin holdings with complete freedom. Additionally, ETFs typically require higher fees due to brokerage fees, and this is obviously a bit different compared to actual Bitcoin.
And there are definitely advantages and disadvantages, and it is best to carry out thorough and detailed analysis and research before making a decision and also as a consideration.

[seoincorporation]

With this move you are not holding crypto at all... you are holding ETFs... is important to mention that FBTC (Fidelity Wise Origin Bitcoin Fund) is not Bitcoin, and you are not holding the keys of those coins. But as an investment is not a bad move at all. Right now the price is $39.58 and it could have a massive jump in the next months. So, good luck with your investment.

[tyz]

With this move you are not holding crypto at all... you are holding ETFs... is important to mention that FBTC (Fidelity Wise Origin Bitcoin Fund) is not Bitcoin, and you are not holding the keys of those coins. But as an investment is not a bad move at all. Right now the price is $39.58 and it could have a massive jump in the next months. So, good luck with your investment.

Not sure if I got you right, but the ETFs hold real Bitcoins. Although you do not actually own the actual keys, the physical share of Bitcoin within the ETFs is in principle yours, even if you can never transfer them to your wallet.

[ChiBitCTy]

So I would assume that your 401k has a brokerage account option that allows you to invest in funds that are not offered by the plan its self, correct?  Otherwise I highly doubt that any 401k/403b/457b etc would have any sort of Bitcoin ETF available inside the plan itself. 

I'm curious of the parameters that surround utilizing this brokerage account in connection with your 401k..are you paying a fee for it?

[thecodebear]

That's nice. I have like $4000 in a retirement account but just sitting in cash since I quit my job a few years ago and the bank moved that money out of the investments I had chosen without asking me and just left it as cash and also I lost access to that account until I go through some sort of process with the bank. Haven't actually had access to it since then. I need to get access to that again haha. I should figure out how to do that and move it to an IRA and put it into a Bitcoin ETF.

[BenCodie]

... invest in the Bitcoin ...

"The Bitcoin"

This made me cackle. Sounds like how a grandmother would refer to Bitcoin if one were to talk about it 

I have a feeling that the wide availability of Bitcoin ETFs will herald one of the longest and most stable bull markets for Bitcoin that we have seen to date. I've always invested in BTC using a private wallet but with Fidelity's offering I feel fairly safe and confident putting a portion of my 401k into it. I had to check a few boxes that I accept the risk but other than that Fidelity authorized the transaction.

What's the basis behind the assumption that a stable and long lasting bull market is coming? I'd be very curious to know a bit more about that comment.

People have lost their 401K's in financial products before. Please don't think that just because Fidelity have done this, it doesn't mean you'll ever be able to redeem that bitcoin etf unit for a real one down the line.

[JeromeTash]

With this move you are not holding crypto at all... you are holding ETFs... is important to mention that FBTC (Fidelity Wise Origin Bitcoin Fund) is not Bitcoin, and you are not holding the keys of those coins. But as an investment is not a bad move at all. Right now the price is $39.58 and it could have a massive jump in the next months. So, good luck with your investment.

Not sure if I got you right, but the ETFs hold real Bitcoins. Although you do not actually own the actual keys, the physical share of Bitcoin within the ETFs is in principle yours, even if you can never transfer them to your wallet.

He has a point though, the investment platform holds both your FBTC and the underlying asset Bitcoin which you think you "bought". So, technically, you momentarily own nothing of the two until the day you liquidate the fund for your cash 

Maybe I am being too ignorant and these funds, but I don't see any good advantage these ETFs hold over owning Bitcoins in a personal wallet except just transferring your financial responsibility to someone else.

[Dr.Bitcoin_Strange]

I have a feeling that the wide availability of Bitcoin ETFs will herald one of the longest and most stable bull markets for Bitcoin that we have seen to date.

Yeah, sometimes people's assumptions coincidentally comes true.

I've always invested in BTC using a private wallet but with Fidelity's offering I feel fairly safe and confident putting a portion of my 401k into it. I had to check a few boxes that I accept the risk but other than that Fidelity authorized the transaction.

When Bitcoin got developed, it was just in singular, which means Bitcoin alone, nothing like FBTC, Bitcoincash, ETF and some other annoying ones I don't want to mention. If you are investing in something else that is not just Bitcoin, then you are not investing in the real thing, but as long as you are aware of the risk and comfortable with it, there is no problem. I just prefer the real one, which is only Bitcoin. Anything other than that is either centralized or could have very unpredictable results. If it's Bitcoin, there is no way to just easily control the technology because if it were possible, then the government would have done it.

[suzanne5223]

Fidelity investment company is one of the reputable investment space but with the FBTC you just bought what you bought yourself is a fungible token, not the actual Bitcoin.
Yes, the spot ETF will trigger a huge market bull but it will also with huge market manipulation which will be played by Fidelity, BlackRock, etc.
You feel safer and confident in FBTC than the BTC you hold yourself means you don't trust and believe in yourself enough.

[adaseb]

Yeah this is why these etfs long term will be very bullish. In the past it was very difficult holding Bitcoin and risky. Now you can easily log in to your 401k brokerage and you can buy the BTC etf.

This is why they have so many competing ads on google. These etfs want to get the word out because if someone invests in bitcoin today, they will most likely hold for a decade and supply will become even more scarse.

[Poker Player]

Sounds good, if there are more people investing in Bitcoin, However as I have always said, I would love if people could directly invest in the Bitcoin and try to own the actual stuff rather than just buying it in some form of ETFs. I understand that there might be some benefits for buying ETFs which I do not understand or know of, but I would simply purchase Bits directly. Retirement plan is a must!

Pretty much this.  What is the point really.  I get there is a financial benefit and profit you could earn but this removes all the fun and purpose of Bitcoin to replace it with hope for a profit.  It makes no sense to me.  Bitcoin offers an opportunity to financial freedom like never before.  And experiencing that is the most fun part of it.

I agree with you, and that's the first thing I thought when I read the OP. However, I think this is going to become more popular than we would like. Just like people use custodial wallets and buy Bitcoin on centralized exchanges, they will buy Bitcoin in their 401k or equivalents when the option is implemented. I have a pension plan, not a 401k exactly because I don't live in the USA, and I don't have Bitcoin there. The Bitcoin I do have is managed by me with my private keys. It makes the most sense.

[pinggoki]

Sounds good, if there are more people investing in Bitcoin, However as I have always said, I would love if people could directly invest in the Bitcoin and try to own the actual stuff rather than just buying it in some form of ETFs. I understand that there might be some benefits for buying ETFs which I do not understand or know of, but I would simply purchase Bits directly. Retirement plan is a must!

They probably don't like to manage the bitcoins themselves, that's why they do ETFs, that's probably the reason and also there's the fact that it will also grow together with the company I think but it's definitely a better thing if they just go for bitcoin. I haven't thought much about retirement but I do hope that I can get there somewhere, with all the bills that I need to pay right now, I don't have the luxury to save right now.

[spectre71]

I knew this thread would be full of morons saying anything to effect of "it's better to hold it yourself"

In context of a 401K, they are a wrong as d**k cancer.

Let me make this simple for those that speak slow. A 401k takes out money pre tax driving down the tax burden and maximising returns. Most companies also match employee contribution! Free money. When entering retirement and taking a draw from the 401k, the person would most likely be in a lower tax bracket.

Additionally  investments within the 401k can be rebalanced without a tax event.

After tax money in the context retirement would be best in a roth ira. Why?

Here's why.

quote from google:
Although you pay taxes on the money you put into a Roth IRA, the investment earnings in the account are tax-free. Also, when you reach age 59 ½ and have had the account open for at least five years, withdrawals are tax-free
https://www.google.com/search?q=do+you+pay+taxes+on+roth+ira+gains&rlz=1C1CHZN_enUS987US987&oq=do+you+pay+taxes+on+roth+&gs_lcrp=EgZjaHJvbWUqBwgBEAAYgAQyBwgAEAAYgAQyBwgBEAAYgAQyBggCEEUYOTIHCAMQABiABDIHCAQQABiABDIHCAUQABiABDIHCAYQABiABDIHCAcQABiABDIHCAgQABiABDIHCAkQABiABNIBCjE5MDAzajBqMTWoAgCwAgA&sourceid=chrome&ie=UTF-8

Or you can just pay a shit on of taxes you don't have to

[franky1]

under fidelity FBTC the OP does not own a share of BTC
he owns a share of a fidelity company share. he cannot redeem that share for actual BTC. he has no ownership rights of actual BTC

however yes using the 401k method to own shares EXPOSED to bitcoin PRICE. means he gets the exact same ups-down of the market movements, with for him the upside that he can purchase exposure amounts at a discount due to pre-tax share purchasing. and tax free selling of shares

but its still worth stating the OP does not have ownership rights over actual bitcoin.

[OgNasty]

What made you choose Fidelity over Blackrock? I also invested in FBTC using a retirement account. The reason I decided to go with Fidelity over Blackrock was that I liked the idea Fidelity wasn’t using Coinbase for custody like everyone else. If I owned stock in Coinbase or Blackrock though I would’ve gone with their offering.

[Silberman]

With this move you are not holding crypto at all... you are holding ETFs... is important to mention that FBTC (Fidelity Wise Origin Bitcoin Fund) is not Bitcoin, and you are not holding the keys of those coins. But as an investment is not a bad move at all. Right now the price is $39.58 and it could have a massive jump in the next months. So, good luck with your investment.

Not sure if I got you right, but the ETFs hold real Bitcoins. Although you do not actually own the actual keys, the physical share of Bitcoin within the ETFs is in principle yours, even if you can never transfer them to your wallet.

The issue is that now you are trusting that a third party is actually holding that amount of bitcoin instead of holding that amount yourself, and we know that those third parties have a horrible record when it comes to that, so anyone that is serious about owning bitcoin needs to go through the trouble of creating a wallet, buy bitcoin and send that bitcoin to their wallet, I know that this includes additional steps but it is way better than to rely on someone else.

[franky1]

With this move you are not holding crypto at all... you are holding ETFs... is important to mention that FBTC (Fidelity Wise Origin Bitcoin Fund) is not Bitcoin, and you are not holding the keys of those coins. But as an investment is not a bad move at all. Right now the price is $39.58 and it could have a massive jump in the next months. So, good luck with your investment.

Not sure if I got you right, but the ETFs hold real Bitcoins. Although you do not actually own the actual keys, the physical share of Bitcoin within the ETFs is in principle yours, even if you can never transfer them to your wallet.

The issue is that now you are trusting that a third party is actually holding that amount of bitcoin instead of holding that amount yourself, and we know that those third parties have a horrible record when it comes to that, so anyone that is serious about owning bitcoin needs to go through the trouble of creating a wallet, buy bitcoin and send that bitcoin to their wallet, I know that this includes additional steps but it is way better than to rely on someone else.

no you do not have ownership rights of BTC as a ETF share holder.
the sponsor (fidelity) owns the coins they are the sponsor that bought the coins and locked them up

share holders just have partial voting right of the fidelity trust that trades as a company/trust

fidelity can in their sole discretion de-peg the share:coin comparison(share dilution/spread/etc).. fidelity can go bankrupt and can "close out" its fund

the SEC made it clear. there is not "in-kind" redemption.. only "in-cash" which is based on the NAV, which can tank and de-peg should the trust have profitability issues

[DapanasFruit]

With this move you are not holding crypto at all... you are holding ETFs... is important to mention that FBTC (Fidelity Wise Origin Bitcoin Fund) is not Bitcoin, and you are not holding the keys of those coins. But as an investment is not a bad move at all. Right now the price is $39.58 and it could have a massive jump in the next months. So, good luck with your investment.

While we don't encourage people most especially member of this forum to take a plunge and invest with ETFs, we should also understand that it can be a good investment vehicle one can get into, that is in addition to actually holding the real BTC in one's secured wallet. So this is a matter of choice and maybe a matter of diversity of investments. I am just wondering: if one has already BTC and will also go into ETF...can we consider this as diversification or just the same basket with new eggs?

[franky1]

once people realise they have no ownership claim of actual bitcoin and cant redeem bitcoin "in-kind" of shares
the benefits they can have of the ETF price exposure is mainly tax related saving for exposure to a market price:

when using pre-tax income, its like discount
if employer matched, its like 2x

think about it if you earn say $35k salary
using https://smartasset.com/taxes/income-taxes (advance)
putting $4660 as your investment pre-tax into 401k (which should be enough shares to be exposure equivalent to spot price of 0.1btc right now)


your take home difference is not $4660 but only $3895 thus a discount
of 0.1($4660)exposure equivalence(but not ownership) you only paid $3895
if you have employer match
of 0.2($9320)exposure equivalence(but not ownership) you only paid $3895

[avikz]

I have a feeling that the wide availability of Bitcoin ETFs will herald one of the longest and most stable bull markets for Bitcoin that we have seen to date. I've always invested in BTC using a private wallet but with Fidelity's offering I feel fairly safe and confident putting a portion of my 401k into it. I had to check a few boxes that I accept the risk but other than that Fidelity authorized the transaction.

I assume your pension fund is going to be a very long term investment for you. As I don't know your age I am assuming this. Historically we have seen, Bitcoin has given a very very good return during long term investment. So I am fairly confident that your investment into Bitcoin through your pension fund will give you the highest return compared to all other asset classes.

Also I believe your pension fund is going to be tax free when you will reach your retirement age. If that is the case then you should be in a good position.

[Natsuu]

Just by being a consistent member of this forum, you can learn how bitcoin works And also understand the risk involved so that you can directly invest in Bitcoin and understand what you are getting into so that your investment in Bitcoin will be one that has a good testimony at the end. By only owning ETF's, you are not going to really enjoy the full benefits of bitcoins like the privacy and self custody, you still will have to pay maintenance fees which somehow is not different from the regular bank charges always complained about.

This is so true. I learned a lot frim here since I started. Re ETFs that offer convenience, they may not provide the same level of control and privacy as direct ownership. It's essential to weigh the pros and cons to make informed investment decisions that align with personal preferences and goals

[Doan9269]

I have a feeling that the wide availability of Bitcoin ETFs will herald one of the longest and most stable bull markets for Bitcoin that we have seen to date. I've always invested in BTC using a private wallet but with Fidelity's offering I feel fairly safe and confident putting a portion of my 401k into it. I had to check a few boxes that I accept the risk but other than that Fidelity authorized the transaction.

Why the ETF when you are having bitcoin to invest, you stand to loose one great opportunity which is what locks you under centralization while dealing with a centralized organization like Fidelity, don't you think you're signing in to their terms and condition could impose a future danger in you later in future, but with bitcoin, there's no need of going through all these because you're investing on a decentralized digital network with bitcoin.

[Fiatless]

no you do not have ownership rights of BTC as a ETF share holder.
the sponsor (fidelity) owns the coins they are the sponsor that bought the coins and locked them up

share holders just have partial voting right of the fidelity trust that trades as a company/trust

fidelity can in their sole discretion de-peg the share:coin comparison(share dilution/spread/etc).. fidelity can go bankrupt and can "close out" its fund

the SEC made it clear. there is not "in-kind" redemption.. only "in-cash" which is based on the NAV, which can tank and de-peg should the trust have profitability issues

Thank you for clearing this misconception, I thought investors indirectly owned the coin. However, this post has even shown that investing through these ETF providers makes the process more complicated than I thought. It's a choice and everyone is free to make their Investment decision.

I have a feeling that the wide availability of Bitcoin ETFs will herald one of the longest and most stable bull markets for Bitcoin that we have seen to date. I've always invested in BTC using a private wallet but with Fidelity's offering I feel fairly safe and confident putting a portion of my 401k into it. I had to check a few boxes that I accept the risk but other than that Fidelity authorized the transaction.

Why the ETF when you are having bitcoin to invest, you stand to loose one great opportunity which is what locks you under centralization while dealing with a centralized organization like Fidelity, don't you think you're signing in to their terms and condition could impose a future danger in you later in future, but with bitcoin, there's no need of going through all these because you're investing on a decentralized digital network with bitcoin.

I wonder why people will prefer to invest through a third party when the have ample opportunity to buy Bitcoin directly and hodl it as much as they can. They don't mind going through all the complicated processes instead of spending time to learn how to keep their coin. Some of them have come up with some explanation justifying this move but I still think it is safer and better keep your keys.

[tyz]

once people realise they have no ownership claim of actual bitcoin and cant redeem bitcoin "in-kind" of shares
the benefits they can have of the ETF price exposure is mainly tax related saving for exposure to a market price:

The people who buy Bitcoin ETF for the 401k plan are usually not those who buy Bitcoin for idealistic reasons, but because of the possible positive price development. All those who are idealistic will still buy "real" bitcoins and put them on their self-hosted wallet.

[franky1]

once people realise they have no ownership claim of actual bitcoin and cant redeem bitcoin "in-kind" of shares
the benefits they can have of the ETF price exposure is mainly tax related saving for exposure to a market price:

The people who buy Bitcoin ETF for the 401k plan are usually not those who buy Bitcoin for idealistic reasons, but because of the possible positive price development. All those who are idealistic will still buy "real" bitcoins and put them on their self-hosted wallet.

but people still think they are buying ownership shares of bitcoin and they think if anything goes wrong with an ETF they as creditors can claim/redeem shares for BTC "in-kind"... i just corrected that false narrative where share holders do not prosper nor get btc if a ETF closes out/bankrupts/dissolves offering

so although ETF offers discounted PRICE exposure due to pre-tax access to spot exposure. it does not mean ownership stake of BTC

[Casdinyard]

I have a feeling that the wide availability of Bitcoin ETFs will herald one of the longest and most stable bull markets for Bitcoin that we have seen to date. I've always invested in BTC using a private wallet but with Fidelity's offering I feel fairly safe and confident putting a portion of my 401k into it. I had to check a few boxes that I accept the risk but other than that Fidelity authorized the transaction.

Could be huge and you're definitely onto something with this 401k retirement fund powered by the crypto titan, but the thing is that since this is an ETF, how secure are you that you're getting your money's worth. I mean, what are the pros and cons that you're looking at cause as far as I know, buying bitcoin outright from users or getting it straight from the people is still a better concept for investments against a paper telling you that you own x amount of bitcoins with nothing to show for it.

At the end of the day you could've done the same thing with buying bitcoin outright and investing through DCA strategy, eventually you'll still get the same amount of money (in theory) and the only thing that you'd really have to worry about is losing your money through belligerent usage or hacking, and perhaps crashes when you're just about to cash it all out. But I reckon you'd deal with the same sets of problems in ETFs as you would've with buying the real thing out, with the teeny tiny added benefit of getting the peace of mind that you can blame someone else besides yourself when it happens.

I see bitcoin ETFs as a sustainable way to really get the whole bitcoin bull run machine running, but I don't see it being very useful to us who are already in the crypto space to begin with. Matter of fact I see it as a way to get those boomers and their coveted millions from destroying the planet and the economy to invest in this technology and possibly give the Gen Zs a chance at life for once.

[fenican]

So I would assume that your 401k has a brokerage account option that allows you to invest in funds that are not offered by the plan its self, correct?  Otherwise I highly doubt that any 401k/403b/457b etc would have any sort of Bitcoin ETF available inside the plan itself. 

I'm curious of the parameters that surround utilizing this brokerage account in connection with your 401k..are you paying a fee for it?

Yes this is correct quite a few 401k's including mine allow you direct control of investments through a linked brokerage account. They charge an annual fee for it but it is modest particularly in my case as I have a fairly good sized balance in the account.

[tread93]

It honeslty can't hurt to diversify your holdings. Of course this is not the same as holding BTC and keeping your own keysl but it is no different than owning stocks or other comparable assets. These ETFs will be a great hedge for investors and prove to be probably one of the best investments or little corners of their portfolio that they wish they always bought more of  

[adaseb]

Yes it’s probably true that if day Blackrock lost its private key or some hacker took the funds bitcoin, then the investor in the fund would most likely just get a cash equivalents like the MtGox or Ftx bankruptcy’s.

However I don’t think they will shut down or lose their Private keys or get hacked. I am sure they have proper custody of those bitcoins. The only way I see an etf shutting down is most likely due to lack of demand for the fund. If GBTC loses all their customers, they will most likely shut down since they can’t compete with the larger etf providers. Why invest with GBTC at a high rate when you can choose a better etf with lower fees.

[franky1]

Yes it’s probably true that if day Blackrock lost its private key or some hacker took the funds bitcoin, then the investor in the fund would most likely just get a cash equivalents like the MtGox or Ftx bankruptcy’s.

However I don’t think they will shut down or lose their Private keys or get hacked. I am sure they have proper custody of those bitcoins. The only way I see an etf shutting down is most likely due to lack of demand for the fund. If GBTC loses all their customers, they will most likely shut down since they can’t compete with the larger etf providers. Why invest with GBTC at a high rate when you can choose a better etf with lower fees.

blackrock use coinbase as custodian.. so not even blackrock hold their own keys
if you look back to the days coinbase held the keys for grayscale. coinbase announced it does not even tell grayscale of the whole custodian process as its "commercially sensitive"

people have also used chain analysis to find the addresses of coinbases custody, and found the funds resided on legacy addresses (one privkey per address) and not even using things like multiparty secured addresses (multisig)

as for instances where coinbase lose funds due to hacking/insider syphoning/stealing.. blackrock would have to dissolve shares that were linked to said baskets via buying shares back fro their AP, by which the aP would need to buy back shares from their customers
this is not a easy fast cheap, beneficial process for all those involved. which is why investments come with risk statements like "you can lose some or all of your invested funds"

shares do not come with guarantees/fixed rate returns.
when the underlying companies have bad performance they do not honour shares at fixed contract rate, but adjust the shares price based on a market rate.. a market rate which can implode and de-peg from whatever index it previously followed

[doomloop]

Sounds good, if there are more people investing in Bitcoin, However as I have always said, I would love if people could directly invest in the Bitcoin and try to own the actual stuff rather than just buying it in some form of ETFs. I understand that there might be some benefits for buying ETFs which I do not understand or know of, but I would simply purchase Bits directly. Retirement plan is a must!

They probably don't like to manage the bitcoins themselves, that's why they do ETFs, that's probably the reason and also there's the fact that it will also grow together with the company I think but it's definitely a better thing if they just go for bitcoin. I haven't thought much about retirement but I do hope that I can get there somewhere, with all the bills that I need to pay right now, I don't have the luxury to save right now.

They don't want to, not because they are busy and lazy but as the OP said, they trust the company more than himself. I think ETF's aren't the only one that offers this but there might be others before, however this ETF might be more known and safer than them.

Growing together with the company seems cool and it gives us a good feeling but the only problem is, if the company collapses, our BTC's or invested amounts are also going to be in danger. This is the risk of doing it. Retirement plans like that were most of the times offered by the company we are working with, but if you are self-employed and you are still struggling financially, you may want to less prioritize them for a while.

[kryptqnick]

I understand investing in Bitcoin directly, which isn't hard and is quite promising in the long run. I also get that some traditional investors who are used to dealing through big funds can find Bitcoin ETFs attractive. But can the op explain the benefits of buying FBTC? How is Fidelity's ETF more attractive than Bitcoin itself? Is it expected to somehow be more profitable? Do they offer interest rates or something like that? I just honestly don't get why one would put money into a big company's hands if one is comfortable investing into Bitcoin directly.

[spectre71]

I understand investing in Bitcoin directly, which isn't hard and is quite promising in the long run. I also get that some traditional investors who are used to dealing through big funds can find Bitcoin ETFs attractive. But can the op explain the benefits of buying FBTC? How is Fidelity's ETF more attractive than Bitcoin itself? Is it expected to somehow be more profitable? Do they offer interest rates or something like that? I just honestly don't get why one would put money into a big company's hands if one is comfortable investing into Bitcoin directly.

In the scope of a 401K: My employer matches my 401K contributions 100%, tax free money at this point. Additionally the 401K lowers my real tax exposure. When I retire I can draw that money at a much reduces tax exposure. Additionally I can rebalance within my 401k with ease and no tax.

Outside the scope of 401K: It fit's nicely inside a one screen portfolio. Again I can rebalance inside without a tax event.

Corporate: It's far more palatable to own ETF. Having custody of a private key within a company even with ulti sig is frightening. Imagine the temptation of a controller holding the 12 words to millions of dollars. Think vanish to El Salvador.

In conclusion: It's never all or nothing. Hold some in your 401k, hold some in your portfolio and hold some in your  cold wallet. Holding it all in one place is FOOLISH. Hold a couple cold wallets of different architectures in different places. And the biggest thing of all keep your mouth shut.

 

[fenican]

under fidelity FBTC the OP does not own a share of BTC
he owns a share of a fidelity company share. he cannot redeem that share for actual BTC. he has no ownership rights of actual BTC

however yes using the 401k method to own shares EXPOSED to bitcoin PRICE. means he gets the exact same ups-down of the market movements, with for him the upside that he can purchase exposure amounts at a discount due to pre-tax share purchasing. and tax free selling of shares

but its still worth stating the OP does not have ownership rights over actual bitcoin.

With an ETF shareholders, admittedly only the larger ones, have a right to redemption meaning they can request delivery of the underlying asset. To simplify the Bitcoin ETF's it is a cash only redemption meaning you would get the spot market price of Bitcoin not physical Bitcoin but effectively it's the same thing. So with an ETF in a very real sense the shareholders are owners of the underlying asset and the fund manger, in this case Fidelity, is just a custodian. It's not as good as holding Bitcoin in your own wallet but has the advantage that you can get access to it through an IRA or 401k with a linked brokerage account.

[franky1]

under fidelity FBTC the OP does not own a share of BTC
he owns a share of a fidelity company share. he cannot redeem that share for actual BTC. he has no ownership rights of actual BTC

however yes using the 401k method to own shares EXPOSED to bitcoin PRICE. means he gets the exact same ups-down of the market movements, with for him the upside that he can purchase exposure amounts at a discount due to pre-tax share purchasing. and tax free selling of shares

but its still worth stating the OP does not have ownership rights over actual bitcoin.

With an ETF shareholders, admittedly only the larger ones, have a right to redemption meaning they can request delivery of the underlying asset. To simplify the Bitcoin ETF's it is a cash only redemption meaning you would get the spot market price of Bitcoin not physical Bitcoin but effectively it's the same thing. So with an ETF in a very real sense the shareholders are owners of the underlying asset and the fund manger, in this case Fidelity, is just a custodian. It's not as good as holding Bitcoin in your own wallet but has the advantage that you can get access to it through an IRA or 401k with a linked brokerage account.

i can tell you have not even read fidelity's s-1/a filing with the SEC..
there are too many corrections i would have to make to clarify where you have things mixed up, that its probably best you go read the s-1/a to realise that you as a share holder through a broker are several levels away from having any ownership claim of bitcoin. your shares are just measured on the performance of the bitcoin market index.. (you have exposure to spot price but not ownership claim of btc)

if not interested in reading the whole of it. and just want to learn some risks .. use browsers [find in page] function for "sole discretion" and see all the points where all the levels above you can do things without share holders permission/vote/knowledge or notice.. its enlightening

https://www.sec.gov/Archives/edgar/data/1852317/000119312524003839/d375081ds1a.htm#rom375081_4
by the way its really worth learning what a trust is. its where there is no ownership. just a hierarchy of management and beneficiaries whom dont own the property inside the trust but can get beneficial benefit of the trust structure without ownership

ill just add this lil snippet

MANAGEMENT; VOTING BY SHAREHOLDERS

The Shareholders of the Trust take no part in the management or control, and have no voice in, the Trust’s operations or business. Except in limited circumstances, Shareholders will have no voting rights under the Trust Agreement.

and

The Sponsor will have full power and authority, in its sole discretion, without seeking the approval of the Trustee or the Shareholders (a) to establish and designate and to change in any manner and to fix such preferences, voting powers, rights, duties and privileges of the Trust as the Sponsor may from time to time determine, (b) to divide the beneficial interest in the Trust into an unlimited amount of shares, with or without par value, as the Sponsor will determine, (c) to issue shares without limitation as to number (including fractional shares), to such persons and for such amount of consideration, subject to any restriction set forth in the By-Laws, if any, at such time or times and on such terms as the Sponsor may deem appropriate, (d) to divide or combine the shares into a greater or lesser number without thereby materially changing the proportionate beneficial interest of the shares in the assets held, and (e) to take such other action with respect to the shares as the Sponsor may deem desirable.

[Fundamentals Of]

There are probably other people who rather trust companies than themselves. I understand them especially those who are already too old to get into the rabbit hole of technicalities. Of course I prefer to own and keep real Bitcoins myself, but to those who can't handle the heavy responsibilities that it implies, a Bitcoin spot ETF offered by a trusted and popular financial institution is an option. There's still risk of course but others might feel that keeping it personally is riskier.

[franky1]

There are probably other people who rather trust companies than themselves. I understand them especially those who are already too old to get into the rabbit hole of technicalities. Of course I prefer to own and keep real Bitcoins myself, but to those who can't handle the heavy responsibilities that it implies, a Bitcoin spot ETF offered by a trusted and popular financial institution is an option. There's still risk of course but others might feel that keeping it personally is riskier.

but holding a share does not mean you own a bitcoin managed by someone else.. you do not own bitcoin by holding shares. you just have beneficial interest in the market price exposure of the index the ETF chooses and the pegging amount the ETF chooses..

[tbterryboy]

Sounds good, if there are more people investing in Bitcoin, However as I have always said, I would love if people could directly invest in the Bitcoin and try to own the actual stuff rather than just buying it in some form of ETFs. I understand that there might be some benefits for buying ETFs which I do not understand or know of, but I would simply purchase Bits directly. Retirement plan is a must!

Pretty much this.  What is the point really.  I get there is a financial benefit and profit you could earn but this removes all the fun and purpose of Bitcoin to replace it with hope for a profit.  It makes no sense to me.  Bitcoin offers an opportunity to financial freedom like never before.  And experiencing that is the most fun part of it.

So, people who buy Bitcoin through an ETF get additional financial benefits and profit apart from the rising value of Bitcoin? I didn't know this, I guess I need to do some reading about ETFs, investments and their pros and cons, etc.

Anyway, just like any other Bitcoin user from the past, I'm not a fan of buying Bitcoin or any cryptocurrency through a third-party that would have possession of my assets instead of myself. I know that most of us use third-party exchange platforms to make purchases, but they give us complete freedom to withdraw and keep our assets with ourselves in our private wallets. There is no fun and meaning in having Bitcoin if you don't have the freedom to hide it from the world and don't let anyone know how much you have and where and how you spend it.