[2024-03-21] Peter Schiff Highlights Problem With Owning Bitcoin ETF ...

[chmod755]

Peter Schiff Highlights Problem With Owning Bitcoin ETF — BTC Investors Respond Self-Custody Is Key

Gold bug Peter Schiff has highlighted a problem with owning spot bitcoin exchange-traded funds (ETFs). However, the issue Schiff pinpointed isn’t unique to bitcoin ETFs. This discussion has reignited calls for self-custody among crypto proponents.

Peter Schiff’s Warning Prompts Self-Custody Push

Gold advocate and economist Peter Schiff has highlighted a problem with owning spot bitcoin exchange-traded funds (ETFs). He wrote on social media platform X Tuesday:

One problem with owning bitcoin in an ETF is that liquidity is limited to U.S. market hours. So if the market crashes overnight, you have no ability to sell until the U.S. market opens for trading in the morning. Very frustrating to watch helplessly with no ability to get out.

Schiff’s statement came after the price of bitcoin dipped earlier this week. The gold bug shared on X Monday: “The more bitcoin that moves into ETFs, the more vulnerable bitcoin becomes to a catastrophic crash. That’s because ETF buyers are more likely traders than true believers. So if bitcoin is going up they’ll go along for the ride. But once it enters a bear market, they’ll bail out.”

When the liquidity of physical gold is questioned, Schiff replied: “Gold doesn’t crash overnight like bitcoin. So there is nothing to worry about.”

Many people commented on Schiff’s post. Bloomberg ETF analyst James Seyffart pointed out that the issue Schiff raised with spot bitcoin ETFs applies to other ETFs as well, including gold ETFs. The analyst detailed on X:

This isn’t new though or exclusive to bitcoin. Gold ETFs? Same thing. Any commodity ETF. Yup. International equity ETFs. Same deal. Even stocks that have market moving events occurring after market hours or during the weekend is pretty similar.

A number of bitcoin proponents responded to Schiff’s post by emphasizing the importance of self-custody and buying BTC directly instead of through ETFs.

Simon Dixon, CEO and co-founder of Bank To The Future, replied to Schiff: “True. Plus no ability to buy bitcoin ETF when the market is closed. Moral of the story is to own real bitcoin if you can. It’s a lot easier than owning real gold without a custodian.” Entrepreneur Bryce Clark opined:

You know Peter Schiff brings up a good point here, you really should self custody your crypto, stop letting third parties hold it. Great advice and thanks for the warning Peter.

Dave Weisberger, an advocate of digital assets for economic freedom, wrote: “Unwittingly, Peter provides another reason why the world’s analog asset markets WILL go digital… 24/7, multi-currency markets, with on-demand settlement, using on-chain value stores as the unit of account ARE superior & will be adopted.”

Source: https://news.bitcoin.com/peter-schiff-highlights-problem-with-owning-bitcoin-etf-btc-investors-respond-self-custody-is-key/

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[Oshosondy]

One problem with owning bitcoin in an ETF is that liquidity is limited to U.S. market hours. So if the market crashes overnight, you have no ability to sell until the U.S. market opens for trading in the morning. Very frustrating to watch helplessly with no ability to get out.

Bitcoin ETF is not bitcoin but what that is pegged with bitcoin price. Just like other people have said, if you do want to trade your coins at anytime of the day, be it day or night or weekend, you can go for bitcoin and not bitcoin ETF. Exchanges are opened 24/7. I am not saying you should leave your coins on the exchange. You can send it to the exchange when you want to trade it or make use of a decentralized exchange.

[cr1776]

One problem with owning bitcoin in an ETF is that liquidity is limited to U.S. market hours. So if the market crashes overnight, you have no ability to sell until the U.S. market opens for trading in the morning. Very frustrating to watch helplessly with no ability to get out.

Bitcoin ETF is not bitcoin but what that is pegged with bitcoin price. Just like other people have said, if you do want to trade your coins at anytime of the day, be it day or night or weekend, you can go for bitcoin and not bitcoin ETF. Exchanges are opened 24/7. I am not saying you should leave your coins on the exchange. You can send it to the exchange when you want to trade it or make use of a decentralized exchange.

Yes, and it is the same for GLD and other ETFs (and individual stocks and bonds):  you are limited to market hours.  This isn't a big revelation from Schiff.  Sure if you have physical gold, you could go to a pawn shop, but you'll be paying a big premium to do so.

[NeuroticFish]

One problem with owning bitcoin in an ETF is that liquidity is limited to U.S. market hours.

Well, this happens when one buys IOUs signed by third party, no matter they are called Bitcoin ETF and they are pegged to Bitcoin. They work when the issuer works, not 24/7 like Bitcoin.
Plus, as @cr1776 very well pointed this out, it's not a problem with Bitcoin. It's a problem with all ETFs, including gold.

I will add, as usual, that I find interesting how much this guy writes about Bitcoin

[Kakmakr]

I think we have to understand that a lot of the traditional Fiat investors and also institutional investors, wants regulated trading platforms, where security are key and also where custody and securing the coins are managed by a third party.

They just want to dump money into an investment and not have the hassle to secure it or to manage it.

Those type of investors are only focussed on profits and not about financial freedom or controlling their private keys. They love the false sense of security that centralization and regulation provide to them.