Are USA's and China's ETFs "creating BTC from thing air"?

[Xylber]

Yesterday, chinese companies China Asset Management, Bosera Asset Management, and Harvest Global Investments released Bitcoin ETFs in the Hong Kong market.
Price fall around 5%.
In January 11, US company BlackRock released a Bitcoin ETF in the american market.

I know that a company selling ETFs must have the real thing stored somewhere, the rumor/opinion says that those ETFs are not actually backed up by Bitcoin, and these companies are "creating BTC from thin air", profiting from BTC real price, increasing supply, and bulk selling thin air to hit the price.

Don't forget the change in narrative in the american market, from "Bitcoin is used for terrorists" to "Bitcoin is a fantastic investment": https://bitcointalk.org/index.php?topic=5458778.0




Could it be true? Is there any way to check if those companies actually have the real thing?

[OgNasty]

Could it be true? Is there any way to check if those companies actually have the real thing?

I don't think it could be true just because it's so easy to have your reserves checked, it seems like in China they would be putting people to death for doing this.  That doesn't mean that some companies aren't trying it, but I don't think it's happening at the scale you seem to be insinuating.  In the end though these games won't work.  At some point someone will have to show their Bitcoin reserves and when companies are tasked with their leaders going to jail or having to spot buy BTC to the moon, they'll do what they're supposed to do and run the price up.  This would be the type of event that would send BTC to a million.  Don't fear it.

[bSpend]

Could it be true? Is there any way to check if those companies actually have the real thing?

I may want to believe it's true, though not because the price of bitcoin dropped after the launching of the etf, but because the government actually are good at stuffs like this, they are professionals in the inflating things/assets, most especially, if the asset is one that the buyers don't see for real, but simply view it as numbers on their screen.

As long as those bitcoin spot etf being sold to customers are not backed with the real bitcoin, it's very possible that those asset managers are creating bitcoin from thin air to profit from, and even if they claim the etf are backed with the real bitcoin, there have to be a way to verify that this claim is true, else, that's just another big lie.

[Dump3er]

Could it be true? Is there any way to check if those companies actually have the real thing?

I don't think it could be true just because it's so easy to have your reserves checked, it seems like in China they would be putting people to death for doing this.  That doesn't mean that some companies aren't trying it, but I don't think it's happening at the scale you seem to be insinuating.  In the end though these games won't work.  At some point someone will have to show their Bitcoin reserves and when companies are tasked with their leaders going to jail or having to spot buy BTC to the moon, they'll do what they're supposed to do and run the price up.  This would be the type of event that would send BTC to a million.  Don't fear it.

Right and I said in this post that it depends on how regulation is set up in different countries, but I am convinced in most countries there has to be a proof of reserve and it is indeed very easy to do for Bitcoin whereas difficult to verify when it's about thin air fiat money. Numbers get checked from auditors in the case of fiat money as well, but they have other constructs and asset classes that sometimes make it difficult to come up with a true and fair view.

But there could be one back door and this is when companies are allowed to secure positions in one asset class with reserves from another asset class. They would make it overly complicated again, as it is already actually.

But if the exposure can clearly be calculated, proof of reserves is either on point or it is not. I hope it works that way.

[blckhawk]

If I recall correctly, China's experiencing some form of funding shortage in their government so it's only logical to think that they would do this because they want to squeeze as much money from everyone else as much as possible, I guess that's what you get when you've got a regime that's only reason for continued existence is because you've got a leader with a cult of personality and your cabinet is full of yes men trying to curry the favor of that said president. I do think that ETFs are technically and on fundamental level, created out of thin air, I mean that they're not really existent and they're reliant on the trust of the people that it's true and the vouch of the people that created them, it's just fiat with extra steps.

[adaseb]

No they aren’t created out of thin air, they are not synthetic shares. If someone buys like $1M worth of bitcoin, the etf then needs to buy those bitcoins thru their custody which is most likely coinbase and those $1M is taken out of circulation and held in trust by coinbase for blackrock.

Nothing is printed out of thin air here. They need to update their etf holdings everyday and you can see how much bitcoin they hold exactly. For the first 3 months or so the flows have been positive but lately they are flat or negative.

[stompix]

I know that a company selling ETFs must have the real thing stored somewhere, the rumor/opinion says that those ETFs are not actually backed up by Bitcoin, and these companies are "creating BTC from thin air", profiting from BTC real price, increasing supply, and bulk selling thin air to hit the price.

Think for a moment, how do you sell something created from thin air?
Also, how do you protect yourself if you take money for a thing you don't buy and that keeps increasing?
BR ETF was launched at 40k , how much loss could they sustain?

I may want to believe it's true, though not because the price of bitcoin dropped after the launching of the etf, but because the government actually are good at stuffs like this, they are professionals in the inflating things/assets, most especially, if the asset is one that the buyers don't see for real, but simply view it as numbers on their screen.

So you're willing to believe some tinfoil material with no proof that makes no sense whatsoever financially just because you hate the government.
You know one rule of Bitcoin, it's called "Don't trust, verify" but I guess conspiracy theories are more appealing when things don't go the way you planned!

[fuguebtc]

No they aren’t created out of thin air, they are not synthetic shares. If someone buys like $1M worth of bitcoin, the etf then needs to buy those bitcoins thru their custody which is most likely coinbase and those $1M is taken out of circulation and held in trust by coinbase for blackrock.

Nothing is printed out of thin air here. They need to update their etf holdings everyday and you can see how much bitcoin they hold exactly. For the first 3 months or so the flows have been positive but lately they are flat or negative.

You have a point there . If I remember correctly, before the ETF was approved, blockrock also chose coinbase as a partner to provide cryptocurrency services to their investors. Additionally, bitcoin ETFs buy and sell bitcoins , and the data is reported daily, so it wouldn't be unreasonable to say they don't own real bitcoins and print them out of thin air.

I believe we are all watching the money flows from ETFs every day but it's funny how many people start to doubt without any proof. Hopefully those who like to doubt others will not print evidence out of thin air to incriminate bitcoin ETFs  .

https://www.investopedia.com/blackrock-partners-with-coinbase-6363233

[Xylber]

I know that a company selling ETFs must have the real thing stored somewhere, the rumor/opinion says that those ETFs are not actually backed up by Bitcoin, and these companies are "creating BTC from thin air", profiting from BTC real price, increasing supply, and bulk selling thin air to hit the price.

Think for a moment, how do you sell something created from thin air?
Also, how do you protect yourself if you take money for a thing you don't buy and that keeps increasing?
BR ETF was launched at 40k , how much loss could they sustain?

Like a ponzi: you sell more ETFs to repay those who bought before.
In fact, people kept buying everyday since launch, and yesterday was the first day people cashed out the ETFs so they wouldn't have a problem.
https://cointelegraph.com/news/blackrock-bitcoin-etf-first-outflow-day-etfs-record-outflows

And don't forget that PayPal, in 2020, before having their own token PYUSD, used to sell "Bitcoin" which only worked in your account and to make payments between PayPal users. It couldn't be cashed out or sent to a private wallet.
https://newsroom.paypal-corp.com/2020-10-21-PayPal-Launches-New-Service-Enabling-Users-to-Buy-Hold-and-Sell-Cryptocurrency.

I may want to believe it's true, though not because the price of bitcoin dropped after the launching of the etf, but because the government actually are good at stuffs like this, they are professionals in the inflating things/assets, most especially, if the asset is one that the buyers don't see for real, but simply view it as numbers on their screen.

So you're willing to believe some tinfoil material with no proof that makes no sense whatsoever financially just because you hate the government.
You know one rule of Bitcoin, it's called "Don't trust, verify" but I guess conspiracy theories are more appealing when things don't go the way you planned!

Consider that not all of us are either americans nor chineses, those governments do not represent us.

As you say, don't trust, verify, Is there any address where we can see the actual BTC stored? How can we know it is the BTC for ETFs and not just the BTC of the clients of CoinBase?
Either way, we end up trusting somebody, as we don't have 100% proof.

[stompix]

Like a ponzi: you sell more ETFs to repay those who bought before.
In fact, people kept buying everyday since launch, and yesterday was the first day people cashed out the ETFs so they wouldn't have a problem.
https://cointelegraph.com/news/blackrock-bitcoin-etf-first-outflow-day-etfs-record-outflows

That's not how a ponzi works, it's completely different.
First, they don't have to pay someone from the funds the first investors put in, why would they?
They are getting money for a product, why would you risk your business to not buy it when you could simply buy the coins and still make a profit from the commissions you take from your clients? What would be the point?
BR made billions this way, they don't care about the value of those assets, that's what investors should do, up and or down BR just like CEX makes money!
Even if Bitocin would drop to 10k or raise to 100k, BR would still make money!

As you say, don't trust, verify, Is there any address where we can see the actual BTC stored? How can we know it is the BTC for ETFs and not just the BTC of the clients of CoinBase?

So, did you question also Microstrategy's finances? Did you question also Bukele funds?
You know for both the custodian is also Bitgo and Coinbase, right? 
But wait, those were the "good" guys, right? 

Either way, we end up trusting somebody, as we don't have 100% proof.

And since you have no proof just accusations, ....see where this is heading? 

[bittraffic]

I know that a company selling ETFs must have the real thing stored somewhere, the rumor/opinion says that those ETFs are not actually backed up by Bitcoin, and these companies are "creating BTC from thin air", profiting from BTC real price, increasing supply, and bulk selling thin air to hit the price.

Think for a moment, how do you sell something created from thin air?
Also, how do you protect yourself if you take money for a thing you don't buy and that keeps increasing?
BR ETF was launched at 40k , how much loss could they sustain?

Like a ponzi: you sell more ETFs to repay those who bought before.
In fact, people kept buying everyday since launch, and yesterday was the first day people cashed out the ETFs so they wouldn't have a problem.
https://cointelegraph.com/news/blackrock-bitcoin-etf-first-outflow-day-etfs-record-outflows

And don't forget that PayPal, in 2020, before having their own token PYUSD, used to sell "Bitcoin" which only worked in your account and to make payments between PayPal users. It couldn't be cashed out or sent to a private wallet.
https://newsroom.paypal-corp.com/2020-10-21-PayPal-Launches-New-Service-Enabling-Users-to-Buy-Hold-and-Sell-Cryptocurrency.

I may want to believe it's true, though not because the price of bitcoin dropped after the launching of the etf, but because the government actually are good at stuffs like this, they are professionals in the inflating things/assets, most especially, if the asset is one that the buyers don't see for real, but simply view it as numbers on their screen.

So you're willing to believe some tinfoil material with no proof that makes no sense whatsoever financially just because you hate the government.
You know one rule of Bitcoin, it's called "Don't trust, verify" but I guess conspiracy theories are more appealing when things don't go the way you planned!

Consider that not all of us are either americans nor chineses, those governments do not represent us.

As you say, don't trust, verify, Is there any address where we can see the actual BTC stored? How can we know it is the BTC for ETFs and not just the BTC of the clients of CoinBase?
Either way, we end up trusting somebody, as we don't have 100% proof.

It's time you ask Coinbase to provide the wallet since they are the custodian of the BTC ETF. If you can provide evidence this is just like what Paypal or the central bank did when they didn't really have gold in them then people are too trusting once again. Institutional traders are supposed to ask for Proof of Reserves in case they wanna withdraw.

The truth is that ETF is just like printing BTC out of thin air unless there will be BTC address proving balance.

[famososMuertos]

One moment...!

The issue here is that we cannot always put bitcoin as the "odd" one, that happens with any asset, they have done it with gold, in the past gold reserves have been created, they have been sold to investors, they have paperwork bureaucrats, even on-site investigations, but it is a lies, there were not the Gold reserves that were claimed. (Bre-X)*

Therefore, obviously this is verified before, and afterwards, as for the investor's comment, these flow for and against, as best suits them.


^{*
I am not comparing the Gold with bitcoin, it is an example, what a coincidence it is Gold. I only assimilated the plot that this scam entails, with this it is understood that distrust is always the best ally, hence if you are going to invest in any asset, look for it to be the most reliable possible}

[Jawhead999]

They didn't create BTC from thin air, but people who bought Bitcoin ETFs didn't own the real BTC.

The companies that release ETFs mostly didn't hold the coins, only Fidelity that self custody the coins, the rest are hold by Coinbase.

The good thing most people still trade the real BTC instead of invest in ETFs, so those conspiracy theory weren't make sense right now. If everyone are invest in ETFs, then there's a possibility Bitcoin supply might be larger than 21 Million.

[STT]

If thats true you have to check if Coinbase keeps the BTC it says it does.  It would be quite profitable for them to operate that way as they would save a percentage on every BTC dealt by themselves.

  I presume they can hold back BTC from their normal business of exchange and that is a profitable business model.   I wouldnt assume they need to 'create' BTC for the ETF ledgers when they already have access to BTC at the market rate.   They charge tons to people to exchange it, all they have to do is take some of that transaction and redirect it as a secondary purpose of serving the ETF business.


ETN is a form of debt sometimes mistaken as an ETF.  This can be leveraged but ETF are supposed to hold 1:1 everything they say they do.   They could still mess up, maybe speculate in their buying arms for the ETF but not normally would that be the case.

[retreat]

No they aren’t created out of thin air, they are not synthetic shares. If someone buys like $1M worth of bitcoin, the etf then needs to buy those bitcoins thru their custody which is most likely coinbase and those $1M is taken out of circulation and held in trust by coinbase for blackrock.

Nothing is printed out of thin air here. They need to update their etf holdings everyday and you can see how much bitcoin they hold exactly. For the first 3 months or so the flows have been positive but lately they are flat or negative.

They have no obligation to use all the money they get from customers to buy Bitcoin as a reserve for the ETF they provide, they only need a few percent as a reserve for their operations, and at any time they can sell it back if they feel they need it. There are even ETF providers who don't explain their reserves at all, because as long as they get the "green light" from the SEC to launch a Bitcoin ETF, they can provide shares whenever they want to potential customers. That's the bad fact about ETF providers, that's why I don't really like them.

[Woodie]

If they create BTC from thin air to be a non existent asset, then it defeats the idea of being called an ETF especialy that it's users use this option to avoif holding to actual BTC for their peace of mind ...and besides these are regulated platforms and having to cheat their clients could have a negative impact on the markets AFAIK as these might become unpopular or could mean proof of reserves will have to be provided to avoid any scams.

I know that a company selling ETFs must have the real thing stored somewhere, the rumor/opinion says that those ETFs are not actually backed up by Bitcoin, and these companies are "creating BTC from thin air", profiting from BTC real price, increasing supply, and bulk selling thin air to hit the price.

This could be a problem if this is what's happening... imagine a scenario of price going x3 on the ROI and most investors decided to remove their investments...this could be catastrophic and possibly filling for bankruptcy which is something we wouldn't want to see tbh...

[EarnOnVictor]

Well, I appreciate that you've already labelled it "rumour/opinion," so it's not particularly true. And with the level I am in Bitcoin investment and in the general market investment, it doesn't work like creating a virtual ETF, no, the law forbids that and the asset and your ETF operation must work hand-in-hand and must be proportionate as well. Maybe the source of the Bitcoin was not known, but that is a different ballgame. Nothing can back Bitcoin ETF up more than Bitcoin and even if there will be some other assets like Gold and fiat currencies technically backing it up, it will only be for some insurance purposes.

As for the image posted of the Blackrock CEO Larry Fink, I couldn't agree more, the guy is saying the truth only that the truth is bitter especially if you are in love with something. Regardless, it is a way to show people who are sceptical about Bitcoin to rethink. Because of their concerns associated with it, they may turn to its ETF which is centralised and that can make transactions more traceable to allay their fear.

[bocyaj]

I don't think it could be true just because it's so easy to have your reserves checked, it seems like in China they would be putting people to death for doing this.  That doesn't mean that some companies aren't trying it, but I don't think it's happening at the scale you seem to be insinuating.  In the end though these games won't work.

The China should allow their people to get into the cryptocurrency,because many countries economy was now had the good standard because of the revenue from the cryptocurrency traders after legalisation of cryptocurrency in their country.China is the first country to had huge population,So adding their people to the cryptocurrency will help their people too.The market of the cryptocurrency also get into the good value and it’s increase the demand of cryptocurrency in the market.

  At some point someone will have to show their Bitcoin reserves and when companies are tasked with their leaders going to jail or having to spot buy BTC to the moon, they'll do what they're supposed to do and run the price up.  This would be the type of event that would send BTC to a million.  Don't fear it.

The bitcoin had a potential to get 10 times of the current market price,So the trust towards the future was the important one here.Now only believe the bitcoin at the beginning of release,most of the people criticised.Only the earlier adopter of the bitcoin was the millionaire and billionaire from their long holding bitcoin.