What is Bitcoin ETF?

[yudi09]

There are already many explanations about Bitcoin ETFs available online, all of which describe what a Bitcoin ETF is and the different types available. In general, a Bitcoin ETF is a security traded on a stock exchange that allows people to invest in its price movements.
In addition to BlackRock, there are other names such as the Grayscale Bitcoin Trust (GBTC).
When people say that a Bitcoin ETF is like a stock whose underlying asset is Bitcoin, that is correct.

[Sobz]

As far as I know, the Bitcoin ETF is an interesting structure because 80 percent of its Bitcoins are owned by whales. Unlike other self-custodial Bitcoins, it's easy to track inflows and outflows.

I have not seen a report before that states that 80% of bitcoin ETFs are owned by whales. I think you should differentiate between whales and institutions. The coins or asset or ETFs that institutions are holding are not owned by a single person.or organization. There is not evidence that 80% of bitcoin ETFs holding are for whales. But you can give me a link that I can read about it if I am wrong.

Because of how the market volatility is being influenced by ETF i think this is why most people normally think bitcoin ETFs are owned by whales. But i know it is not owned by a single person's but some groups. Their are a whales that are very concerned with self-custody, that are so much concerned in investing by themselves and to control their asset. And their are also whales who are more in ETF but their is no evidence of 80% of whales own ETF or more investing in bitcoin through ETF.

[sergiorus]

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.

Annual sponsor fee of 0.25% for management fee in IBIT (iShares Bitcoin Trust ETF), the NAV is going down every year, this won't happen if someone buy spot BTC but to be fair it's far better than keeping it on CEX because ETF have SIPC if you buy through brokerage. If CEX fail, that's the end of it.

If we are talking about something like Coinbase, then if it fails - everything fails, that's the scenario where you won't be safe no matter what or where you hold it.

Besides, iShares hold BTC mainly in Coinbase Custody as well. But Coinbase is the definition of ''too big to fail''.

[free-bit.co.in]

Annual sponsor fee of 0.25% for management fee in IBIT (iShares Bitcoin Trust ETF), the NAV is going down every year, this won't happen if someone buy spot BTC but to be fair it's far better than keeping it on CEX because ETF have SIPC if you buy through brokerage. If CEX fail, that's the end of it.

If we are talking about something like Coinbase, then if it fails - everything fails, that's the scenario where you won't be safe no matter what or where you hold it.

Besides, iShares hold BTC mainly in Coinbase Custody as well. But Coinbase is the definition of ''too big to fail''.

Not just ishares either, 9 out of the 12 Bitcoin ETFs in the US picked Coinbase custody to hold their BTC. If anything happened to Coinbase, it'd be a real disaster for the market.
https://cryptobriefing.com/coinbase-dominates-spot-etf-custody/

It's not hard to see why they go with ETFs, either. Institutions and companies have strict requirements to meet when it comes to risk management, financial reporting and asset custody..ETFs let them get exposure to Bitcoin without overhauling their existing processes, and they stay compliant with SEC regulations at the same time.

[Byebyebtc]

It's must have already been explained to you, regardless to my understanding it's basically an indirect way of buying Bitcoin, you buy stocks that are involved in buying and selling of Bitcoin.

They do hold significant amount of Bitcoin to their buying and selling of coins will definitely influence the market

Although ETFs are centralized, it's a centralized way of owning a discentralized asset

[sergiorus]

Annual sponsor fee of 0.25% for management fee in IBIT (iShares Bitcoin Trust ETF), the NAV is going down every year, this won't happen if someone buy spot BTC but to be fair it's far better than keeping it on CEX because ETF have SIPC if you buy through brokerage. If CEX fail, that's the end of it.

If we are talking about something like Coinbase, then if it fails - everything fails, that's the scenario where you won't be safe no matter what or where you hold it.

Besides, iShares hold BTC mainly in Coinbase Custody as well. But Coinbase is the definition of ''too big to fail''.

Not just ishares either, 9 out of the 12 Bitcoin ETFs in the US picked Coinbase custody to hold their BTC. If anything happened to Coinbase, it'd be a real disaster for the market.
https://cryptobriefing.com/coinbase-dominates-spot-etf-custody/

It's not hard to see why they go with ETFs, either. Institutions and companies have strict requirements to meet when it comes to risk management, financial reporting and asset custody..ETFs let them get exposure to Bitcoin without overhauling their existing processes, and they stay compliant with SEC regulations at the same time.

Well technically Coinbase Custody is different from Coinbase CEX and funds on there are protected completely differently than funds on the CEX. They also charge fee for holding assets on there. It would probably still get affected if Coinbase is hit too hard (FTX/Mt.Gox kinda thing) but that's extremely unlikely. On the other hand, if the hack/exploit is not very serious, deposits on the CEX will be compensated anyway.

I understand why institutions have to use ETFs but there are plenty retail investors (prolly mostly boomers) in them as well, and this is where it's strange to me. Like, in my opinion retail has no excuse to purchase Bitcoin ETFs instead of spot ETFs even if they just keep it on Coinbase/Kraken.

[free-bit.co.in]

Well technically Coinbase Custody is different from Coinbase CEX and funds on there are protected completely differently than funds on the CEX. They also charge fee for holding assets on there. It would probably still get affected if Coinbase is hit too hard (FTX/Mt.Gox kinda thing) but that's extremely unlikely. On the other hand, if the hack/exploit is not very serious, deposits on the CEX will be compensated anyway.

Yep, I'm aware of that. Coinbase Custody, Coinbase CEX and Coinbase Prime are all separate platforms, and Custody is mostly cold storage that sits in its own regulated entity.

I understand why institutions have to use ETFs but there are plenty retail investors (prolly mostly boomers) in them as well, and this is where it's strange to me. Like, in my opinion retail has no excuse to purchase Bitcoin ETFs instead of spot ETFs even if they just keep it on Coinbase/Kraken.

Then you also have to accept that not everyone who gets into Bitcoin cares about the tech, decentralization, privacy, or having full control over their coins. A lot of folks only care about one thing: making money. So it's hardly surprising that they go with CEXs or ETFs.