What is Bitcoin ETF?

[NPCVAL]

I technically don't know what a Bitcoin ETF is? since I only know the  Bitcoin fluctuation of price which is caused by ETF and thats why i created a new topic to know about it.I dont know what an ETF is, i heard/read the term ETF from someone, and then i wanted to know more,i asked the same question on social media but everyone gave the same answers and I want someone who can explain ETFs and then Bitcoin ETFs

And I also wanted to know when ETFs came and before ETFs, how did Bitcoin rise and fall

I found this board while searching about ETF.

I also posted the same question on Wallobserver but nobody has commented as of now so i thought of asking here

[_act_]

There are many bitcoin spot ETF companies, the most known is Blackrock. The name of its ETF for bitcoin is IBIT. If bitcoin move 10%, IBIT will also move just 10%.

Blockrock bought bitcoin as more people are buying IBIT and sell bitcoin as more people are selling IBIT.

And I also wanted to know when ETFs came and before ETFs, how did Bitcoin rise and fall

As more people buy bitcoin than sell, the price of bitcoin will increase. As more people sell bitcoin than buy, the price of bitcoin will reduce. Also count Blackrock among this people as they buy and sell due to their customers buying and selling IBIT.

[noorman0]

Much like stocks, investment management firms can issue specific bitcoin securities (known as ETF products) that use Bitcoin as their underlying asset. Different firms offer own ETF products; for example, Grayscale has GBTC, BlackRock has IBIT, and many others. However, the volatility remains influenced by and can also affect the global Bitcoin market.

In short: Bitcoin ETFs are a solution for those who prefer not to own or manage Bitcoin directly.

[Ambatman]

I technically don't know what a Bitcoin ETF is? since I only know the  Bitcoin fluctuation of price which is caused by ETF and thats why i created a new topic to know about it.

Bitcoin rise and fall are not caused explicitly by ETF.
They are caused by factors like demand and supply, market sentiment and Etf are just another
Channel of the demand and supply.

ETF allow people to invest in an asset through a stock exchange
If you want to exposure to bitcoin price but not managing them
Then etf is a method one can use.


Common misconception: ETFs buy Bitcoins for themselves.
The truth is they are just custodians and help people buy and also sell
Hence why you hear about inflow and outflow, that's just investors demanding more or selling.

I also wanted to know when ETFs came and before ETFs

ETFs for other assets have always been existing
For Bitcoin ETF future was 2021 while the long awaited spot then was 2024 January.

[tbct_mt2]

I technically don't know what a Bitcoin ETF is?

https://www.investopedia.com/spot-bitcoin-etfs-8358373
https://www.investopedia.com/where-to-buy-the-new-spot-bitcoin-etfs-8557203

I also posted the same question on Wallobserver but nobody has commented as of now so i thought of asking here

If you have time to post in Wall Observer thread and wait for replies, then have time to make this thread, you have enough time to search for what is Bitcoin ETF.

Why you don't do searching and finding answers for your question?
I am really sure that searching will quickly give you answers, with or without AI assistance.

[BlackHatCoiner]

A Bitcoin ETF is just a basket that holds actual Bitcoin (or Bitcoin futures). Wall Street suits and retirement fund managers buy shares of that basket through their regular stockbroker instead of figuring out seed phrases. BlackRock buys the BTC, puts it in cold storage, and gives investors a ticker symbol.

It's an IOU.

[PostQuantumBTC]

Why you don't do searching and finding answers for your question?
I am really sure that searching will quickly give you answers, with or without AI assistance.

Is that the reason you just gave him link to investopedia when most people that have posted already gave him good answers that will let him easily understand what bitcoin ETFs are without reading the content on the link that you posted.

This is a forum, I do not like when someone will ask a question and an user will post that the person should search online. Just give him the answer or a link to the answer just like you did.

[Sim_card]

ETF means Exchange-Traded Fund. They buy real bitcoin and sell you part of their shares and a paper is given to you as an ownership of their shares. Instead of having bitcoin that you bought from an exchange and store in your noncustodial wallet, Bitcoin ETFs is in custody of your bitcoin and whenever, you need to sell your coins, you show them your ownership paper and they sell it for you giving you back in cash. So, it just like using cash to buy and sell back to receive cash based on the price of bitcoin at that moment.

[sunsilk]

since I only know the  Bitcoin fluctuation of price which is caused by ETF

This is not entirely true. The price fluctuation that we see on Bitcoin is its nature affected by several factors and Bitcoin ETF inflows are just a part of it.

But it's not the only thing that affects it, we are here the retailers and as well as the other financial sectors which are also now into Bitcoin.

And I also wanted to know when ETFs came and before ETFs, how did Bitcoin rise and fall

Simply due to its demand, there were also news about FUD that made the fall. Like the ICOs, NFTs in the past if we go back a couple of years ago and there's even more.

If you are interested in getting into ETFs, do yourself a favor and buy bitcoin per se not an etf.

[sergiorus]

Wall Street suits and retirement fund managers buy shares of that basket through their regular stockbroker instead of figuring out seed phrases.

+pay fees to the broker and the funds for both buying/selling AND holding.

Complete ripoff, I really don't understand why they do it and seed phrases aren't even a problem since they all could at least use centralised exchanges to buy and hold BTC on there if self-custody is beyond their Harward education.

[Alphakilo]

Bitcoin ETF is different from normal ETF because it strictly concerns Bitcoin investment through standard stock accounts managed by companies that have insurance and the investor don't get to worry about their funds being hacked or worry about self custody practices because they leave it all to the company managing their portfolio. It's mostly for big investors with large portfolio.

While ETF is simply just a single market share with many other assets embedded that allows an investor to own multiple stocks instead of buying these stocks individually.

[suzanne5223]

Let's start with an ETF, which is a fund used to trade and tracks the price of an asset on the regular stock market.
A Bitcoin ETF is a share sold by the company that holds actual Bitcoin.
When people sell the ETF shares, or want their dividend, the company in charge of the BTC ETF sells its BTC holdings. This is why MicroStrategy sells BTC at some point nd that's why Bitcoin ETFs affect the market due to how they create real buying and selling pressure on the Bitcoin market.

But understand that if you invest in a BTC ETF, you don't own any Bitcoin yourself. You just own shares of the company (MSTR, IBIT, FBTC, etc.) fund. That's why it's called an IOU here.