So we FINALLY have a SEC approved BTC ETF!

[37andhappy]

Who would have thought all those years ago when Bitcoin was first unleased on the world, that it would ge to the point where the SEC recognized it as a legitimate asset class.

So, who's buying in?

This is a unique situation where we all as individuals, have the ability this weekend to front-run all the slow moving old-fashioned institutional money that will flow in slowly from Monday onwards ...

Becoming a whole-coiner is still in reach for many of us in 1st world countries. We will see over time Billions of Indians, Asians, Latin-Americans, Eastern Europeans etc toiling away for Sats, (with the possibility of ever becoming a "whole-coiner" a far away (and basically unachievable dream) kind of like a rat running on a treadmill.

For those with foresight and with current wealth, we are fortunate enough to be able to "lock in and secure" our place in what will be an increasingly competitive and wealth divided world. In the future, with growing demand, many will never have this opportunity as the number of Sats that will ever be produced is perfectly and mathematically finite.

 

[SecondAttempt]

Ok, I truly do not mean this as any kind of attack. But could you please explain to me the value of bitcoin if you do not have criminal intentions? It seems to me that the only reason to use bitcoin would be if I were trying to buy something illegal like drugs or a hitman so it could not be traced back to me or to evade taxes.

I get that some people are trying to make money mining bitcoin and that is perfectly fine. They can find the blockchain codes and sell them so criminals can use them I guess. The ethics are questionable but I won't go there.

But why would anyone invest in a bitcoin ETF? That's a legitimate question. What are the upsides? downsides? risks? Can you explain those quantitatively?

 

[37andhappy]

Ok, I truly do not mean this as any kind of attack. But could you please explain to me the value of bitcoin if you do not have criminal intentions? It seems to me that the only reason to use bitcoin would be if I were trying to buy something illegal like drugs or a hitman so it could not be traced back to me or to evade taxes.

I get that some people are trying to make money mining bitcoin and that is perfectly fine. They can find the blockchain codes and sell them so criminals can use them I guess. The ethics are questionable but I won't go there.

But why would anyone invest in a bitcoin ETF? That's a legitimate question. What are the upsides? downsides? risks? Can you explain those quantitatively?

Criminals would prefer to use paper money, or perhaps gold (as opposed to Bitcoin which has a publicly visible ledger).

The main value proposition of Bitcoin is its defence against a declining USD (or indeed any Government currency). One could analogize Bitcoin to being "digital gold" (only with far superior monetary qualities in terms of accessibility, divisibility, certainty of supply, etc.

All government issued currencies declined over time as they can be infinitely "printed". Bitcoin on the other hand, is perfectly limited in supply. It is also "permissionless" meaning that you don't need from either the Government or a private bank, to access your wealth.

There is also a philosophical and libertarian aspect to Bitcoin, which is, why should any Government dictate how and what we, as individuals, use a medium of exchange.

We know for certain that ALL BANKS are inherently unethical (in that their entire purpose is to make money from their customers). Its an absolute misalignment of interests. Bitcoin on the other hand is amorphous. It has no intention, and is not capable of having one. Bitcoin is available and is equal to all, as it exists entirely on a globally accessible decentralized block chain.

Takes some time to figure out, but I do get the role it fulfills and why the demands for this asset is growing.

As for the ETF itself, if we really do see one approved, clearly this is a massive stamp of legitimacy, and it will lead to massive institutional and HNW inflows into this asset class over time.

 

[freedom2022]

IMHO, bitcoin is a hedge against the greenback.
The Fed keeps printing money. At certain point, people will start to think Uncle Sam will not be able to pay back. There is no alternate currency at present time. So, the bet is bitcoin will be precious when that time come.

 

[bobandsherry]

Help me understand.... People worry that Uncle Sam may not be able to pay it's debts because they continue to print money. But if everyone who held Bitcoin wanted to cash in all at once, who makes them whole? Just curious.

BTW if Uncle Sam can't pay their debts y'all have a lot more to worry about.

 

[Sunset]

(IMHO)

Criminals that want to get paid prefer bitcoin. Transfer the millions in seconds. Repeat many times and 5 minutes later convert it to gold/goods.

Much safer than picking up a suitcase of cash under the bridge, which has a tracker on it and being watched by 5 FBI/CIA agents depending upon the country.

One deep concern I have for bitcoin, is possibly it's possible to "print" extra coins, a backdoor type of thing. I bet 99.999999% of folks buying bitcoin haven't studied the code and understand it enough to know for themselves about the possibility of this happening.

I see bitcoin as simply another currency, it's only an investment as a hedge against some other currency, similar to gold or silver.

As a hedge to gov't money, I prefer stocks.

 

[jim584672]

Help me understand.... People worry that Uncle Sam may not be able to pay it's debts because they continue to print money. But if everyone who held Bitcoin wanted to cash in all at once, who makes them whole? Just curious.

BTW if Uncle Sam can't pay their debts y'all have a lot more to worry about.

Bitcoins don't disappear (unless someone forgets their wallet password and those coins become locked forever) so there is nothing to "cash in", the price would just drop if people went sour on it.

 

[freedom2022]

Total supply of bitcoins is capped at 21 millions. There are 2,250,000 bitcoins left.
More people own bitcoin nowadays. A lot more people still have faith in greenback.
If a lot of people want to sell bitcoin, the price will drop. It may go down to zero.
Time will tell what will happen.

 

[Sniggle]

I may dabble if there is an option market for it, but I still can't make sense of crypto.

 

[Starsky]

But why would anyone invest in a bitcoin ETF? That's a legitimate question. What are the upsides? downsides? risks? Can you explain those quantitatively?

It's almost impossible to quantify the upside and downside risks since they are usually external in nature.

For bitcoin holders, hacking is a potentially major issue if they store them online and not in an offline wallet. Once stolen, Bitcoin can't be recovered. This official recognition will probably allow these companies to get better security and insurance for their BTC holders now. That's only a concern for ETF's to the extent they are exposed to a particular companies loss.

As an investment, bitcoin is somewhat similar to a precious metal. Especially in that it is easy to sell, but has a very high transaction cost which makes it more challenging to hold. This is one huge benefit of a Bitcoin ETF. It would be much easier to trade. I think this will blow up the Bitcoin market.

One significant difference from PM in the short-term is that there are a limited number of bitcoins in circulation. This has the potential to increase the value as bitcoin is accepted and used more widely; or to destroy the value if bitcoin is blocked by regulators. The former seems more likely at this point. I suppose one potential risk would be that they redesign the blockchain and increase the supply of bitcoin, which would depress the value of the existing inventory.

In the past two years, Bitcoin has increased in value from around $12K to a current price of $60K. With that kind of appreciation and volatility, it is a perfect investment vehicle for a certain type of high-risk investor. I only wish I owned a lot more of it. I will definitely buy some of the ETF when it comes out for the risky side of my portfolio. I'd like to own at least a full coin or two.

 

[bobandsherry]

Bitcoins don't disappear (unless someone forgets their wallet password and those coins become locked forever) so there is nothing to "cash in", the price would just drop if people went sour on it.

I wasn't asking about it disappearing. But if everyone wanted to turn Bitcoin into cash, USD, Euro, or even gold or some other crypto, maybe pay for their Lambo's....whatever, who stands behind that to ensure everyone is paid? Can't happen from what I understand, instead the value of each coin would just drop to $0. Last one out holds the bags. So why is this a hedge against Uncle Sam not paying their bills?

 

[jim584672]

I wasn't asking about it disappearing. But if everyone wanted to turn Bitcoin into cash, USD, Euro, or even gold or some other crypto, maybe pay for their Lambo's....whatever, who stands behind that to ensure everyone is paid? Can't happen from what I understand, instead the value of each coin would just drop to $0. Last one out holds the bags. So why is this a hedge against Uncle Sam not paying their bills?

Nothing stands behind it, it has no intrinsic value. It has value because the next person will buy it from you. Bitcoins have a creation limit where new coins stop being created. Relative to the USD it should become more valuable.

 

[MichaelB]

I can’t believe I’ve made it this far without a crypto-ETF.

 

[pb4uski]

Who would have thought all those years ago when Bitcoin was first unleased on the world, that it would ge to the point where the SEC recognized it as a legitimate asset class. ...

First and most importantly... just because the SEC approved the sale of an ETF that invests in crypto doesn't mean that they have recognized crypto as a legitimate asset class.

Beyond that, I have trouble vieing anything that lacks cash flows as a legitimate asset class... I even struggle with precious metals being a legitimate asset class but at least precious metals have some legitimate commercial uses.

Crypto is right up there with tulip bulbs to me.... and if someone created a tulip bulbs ETF with the right attributes then the SEC would probably approve that for sale too.

Actually, at least you can plant tulip bulbs and in a month or so have some nice flowers... you can't say the same for crypto.

 

[Major Tom]

I can’t believe I’ve made it this far without a crypto-ETF.

Yes, how on earth have we all managed!

 

[Markola]

I want to make money and have a fear of missing out (FOMO). Bitcoin is:

A decade+ old bit of computer code. I usually don’t buy those.

Bad for the environment, due to the massive energy consumption required to mine and sustain it. I usually avoid such choices when possible.

Favored by criminals, like Russian ransomeware thieves. Same as above.

Not a company and it has no earnings. Ok. I also don’t own gold for that reason.

I don’t play in the global currency markets, so why would I start speculating in digital currency markets……

…..Especially a speculation with thousands of digital competitors, some of them intended a jokes (Dogecoin) that are presently worth billions. Hmmm. I remember when I felt stupid not to own Pets.com, Webvan, Netscape, Altavista, Yahoo…

Illegal to use, so far, among 20% of the global population living in the world’s second largest economy.

Not really useable for commerce, or if it is, I’m seeing Bitcoin used exactly nowhere in my daily existence.

If the world realizes the explosive potential of block chain, and if some of the thousands of digital currencies become useful and thrive, I know that all of that growth will be reflected organically and in the proper proportions in the 28,000 securities I’m exposed to in my portfolio of global index funds, just like the advent of the internet itself made us all richer.


Other than that, Mrs. Lincoln, how was your night at the opera?

 

[ownyourfuture]

Nothing stands behind it, it has no intrinsic value. It has value because the next person will buy it from you

This isn't an endorsement for bitcoin (I've never held it in any form) or an opposition to equities (I was able to retire at 53 because of them)
But your quote could be attributed to individual stocks as well.

Of course, literally thousands of individual stocks have a slightly longer track record than bitcoin

 

[bobandsherry]

But your quote could be attributed to individual stocks as well.

Of course, literally thousands of individual stocks have a slightly longer track record than bitcoin

Not really true, stocks do have intrinsic value.

https://www.fool.com/investing/how-to-invest/stocks/intrinsic-value/

 

[ownyourfuture]

Not really true, stocks do have intrinsic value.

https://www.fool.com/investing/how-to-invest/stocks/intrinsic-value/

I should've been more clear. I was referring to a worst case scenario. Like GM in 2009.

 

[pb4uski]

+1 because stock ownership entitles the owner to a portion of the distributable cash flow of the company and the right to those distributable cash flows is the value. In some other situations, the distributable cash flow is prospective if the company grows and becomes profitable.

 

[pb4uski]

....But your quote could be attributed to individual stocks as well. ...

I should've been more clear. I was referring to a worst case scenario. Like GM in 2009.

Nice backpedal! Now that's the way to walk back a post!

You didn't qualify it at all... like "some" individual stocks or a "small percentage" of individual stocks.

 

[bobandsherry]

Nice backpedal! Now that's the way to walk back a post!



You didn't qualify it at all... like "some" individual stocks or a "small percentage" of individual stocks.

Yeah, I thought the same thing but was just going to let it go. And up until 2009 GM had intrinsic value, just circumstances changed.

 

[NW-Bound]

No "precious bits" for me.

Talk about the "bits" production being limited hence guaranteeing the value of the "bits", that limitation is artificial. People already find ways to generate different kinds of bits beyond the original Bitcoin. Following is the list of the largest "bits" among the long list of more than 6,000.

1) Bitcoin
2) Ethereum
3) Binance Coin
4) Cardano
5) Tether
6) XRP
7) Solana
8) Polkadot
9) USD Coin
10) Dogecoin
...
6594) Tails
6595) Imperial Obelisk

There's more intrinsic value in collectibles. For example, the supply of artwork by Monet or Renoir or any artist is truly limited. Same with Ming vases, or Egyptian artifacts.

But bits? Bits? Any guy with a computer can create a new type of bits. The bits are not worth the power it takes to run the PC to create them.

 

[37andhappy]

+1 because stock ownership entitles the owner to a portion of the distributable cash flow of the company and the right to those distributable cash flows is the value. In some other situations, the distributable cash flow is prospective if the company grows and becomes profitable.

The BTC ETF itself itself a stock. Albeit one which simply provides exposure to BTC. Just like there are gold ETFs, or other companies which are indeed negative yielding and/or have never been profitable, an commodities ETF provides no actual yield - your entire gain (or loss) is dependent on the value of the underlying commodity.

However, wit a commodity ETF, the entire purpose is to give you exposure to the underlying asset class - in the case of BIT ETFs, its Bitcoin. Personally, I would consider simply buying Bitcoin directly, but there are a whole class of people and institutions who would likely only buy Bitcoin via an ETF. From Monday onwards then can do so.

Yes, in general we should be looking at investing in income producing companies. I presume that other than income producing companies, you may be holding some cash? Well that cash, is with absolute certainly declining. At some point, people start to "cash in" that cash, because they have lost faith in its ability to hold value. When that happens more rapidly we see prices of all non-cash assets rise. This is what we are seeing now, hence the move into stock, houses, and hence the huge value proposition for Bitcoin (which functions like digital gold, is globally accessible and transferable, and which is perfectly limited in supply.

Stocks and houses have some benefits but also a huge list of risks and downsides. For this reason, may are seeking Bitcoin as an alternative to cash and as a diversification to other types of asset classes.

 

[triangle]

I remain skeptical of long term value, even as Bitcoin periodically surges in popularity and ramps up in value over times. While it is not a Fiat currency, I don't see how that isolates it from similar forces but in a somewhat sudden and binary manner, meaning governments could by fiat make it hard to transact in bitcoin it ever became competitive with its national currency and threatened its financial planning/manipulations.

There are many recent opinion articles to be found about it. I mostly agree with this author, especially how it does not generate wealth.
https://seekingalpha.com/article/4459755-shiba-inu-why-crypto-cannot-create-wealth

A counter opinion article was then written to highlight the moat that Bitcoin has in the crypto space.
https://seekingalpha.com/article/4460198-bitcoin-btc-cryptocurrency-value-moat


If you care to be amused (or perhaps annoyed) here is a spoof commercial about crypto from "Cracked".