So we FINALLY have a SEC approved BTC ETF!

[37andhappy]

The point was and is that the risk of loss with crypto is much, much higher than with traditional investments. Can the risk be mitigated... sure, just a simple not of instructions in a safe deposit box that your heirs will have access to would suffice... but I'm betting that a lot of crypto buyers don't have that dire possibility covered off.

I agree with you - people should give thought to the issue of dying and inheritance, with any asset, not just Bitcoin. I explained some good options in my post above, but I won't go into any further details as to what I personally might do.

And of course, whilst not nice for any owner or inheritee, a loss of access to Bitcoin is not a bad thing at all for Bitcoin per se, as no Bitcoin is actually "lost" in such cases - but as you have correctly pointed out, it effectively cannot be accessed if one has self custody, and one then loses ones keys.

Over time, such "inactive Bitcoin" should lead to less price volatility in the asset price, as any such lost keys result in an unintended "hodling" whereby the Bitcoin with the lost keys is never again transacted with, leading to a stabilizing effect on downward price movements. Some make the argument that such inaccessible coins are not only stabilizing for the market, but indeed positive to price, as the total number of Bitcoins, for practical transactional purposes, has actually been reduced from the 21m maximum supply. (There are longer economic arguments on the theory around these 2 views, which I won't get into here).

 

[target2019]

I love a good Bitcoin thread.

Bitcoin is a breath mint!

 

[captain3d]

Congrats to any Bitcoin holders on today’s all time high

 

[yakers]

Just so the thread/board doesn't go ***** like, for newer members don't bother looking it up, it was a difficult time and lead the VG Diehards to set up the bogleheads.

 

[aja8888]

Wat

Can we move on to NFT's? I hear they are the next best way to achieve financial independence!

OK, maybe later we can discuss legacy assets like:

1. Rare baseball cards,
2. Rare coins,
3. Beanie babies ( I know someone who put her retirement saving into them),
4. Olympic pins (yes, I have some from the 1984 Summer Olympics in Los Angeles)
5. Elvis memorabilia.

Discuss in any order......

 

[braumeister]

1. Rare baseball cards,
2. Rare coins,
3. Beanie babies ( I know someone who put her retirement saving into them),
4. Olympic pins (yes, I have some from the 1984 Summer Olympics in Los Angeles)
5. Elvis memorabilia.

All very legitimate sources of future income, I'm sure.
Fortunately, my retirement is all set due to the sizable collection of Hummel figurines I inherited.

 

[MichaelB]

Just so the thread/board doesn't go ***** like, for newer members don't bother looking it up, it was a difficult time and lead the VG Diehards to set up the bogleheads.

I know what you mean. Here we’re committed to not letting that happen again. Newer members won’t get it because that term is not permitted. It leads to chaos and would make everyone’s head explode.

 

[MichaelB]

Can we move on to NFT's? I hear they are the next best way to achieve financial independence!

OK, maybe later we can discuss legacy assets like:

1. Rare baseball cards,
2. Rare coins,
3. Beanie babies ( I know someone who put her retirement saving into them),
4. Olympic pins (yes, I have some from the 1984 Summer Olympics in Los Angeles)
5. Elvis memorabilia.

Discuss in any order......

Nice list. I have some Olympic pins from other games. Wanna trade?

All very legitimate sources of future income, I'm sure.
Fortunately, my retirement is all set due to the sizable collection of Hummel figurines I inherited.

My dear mother had some Hummels, she thought they had been in the family for years and were quite valuable. They were Hummels but not collectible.

 

[NYEXPAT]

A little bit misleading. It is a futures based ETF and will not hold Bitcoin, will also be subject to Backwardation and Contango. GBTC just filed to be converted into an ETF and might get approval in 12-18 mths.

 

[braumeister]

They were Hummels but not collectible.

Actually, some Hummels were quite valuable 20-30 years ago. But once they began flooding onto eBay the supply outstripped the demand and their value plummeted. By the time I inherited them (they were Mom's favorite things) they were nearly worthless.

The early days of eBay were really interesting. DW had a Barbie doll from her youth, still in its original box, and I sold it on eBay for several thousand bucks.

 

[FIRE'd@51]

GBTC just filed to be converted into an ETF and might get approval in 12-18 mths.

Why do you say 12-18 months? Form 19b-4 was filed by NYSE Arca (not Graystone) and typically should be approved or denied within 90 days since NYSE Arca is a Self-Regulatory Organization.

 

[captain3d]

Why do you say 12-18 months? Form 19b-4 was filed by NYSE Arca (not Graystone) and typically should be approved or denied within 90 days since NYSE Arca is a Self-Regulatory Organization.

I think they have 75 days to respond to the application. So end of the year

https://www.nasdaq.com/articles/a-g...f-could-be-right-around-the-corner-2021-10-16

"The official Grayscale filing will kick off a 75-day review period for the SEC to either approve or deny the proposed spot Bitcoin ETF, a first of its kind, physically-settled, bitcoin financial product."

 

[SecondAttempt]

which come from no-coiners

I guess I am a proud no-coiner. Old dog, no coiner. This is starting to get amusing. I guess your point is that only people who own bitcoin can possibly have valid opinions and insights into bit coin. I hope you see the obvious flaw in that logic.

BTC per se doesn't need any "SEC approval" to exist.

Of course not. But Americans can be barred from owning it. I don't see that happening but it is likely possible. Americans were barred from owning gold for decades and the courts upheld it.

Confiscation is probably not legal but a bar on ownership and the consequent mass sell-off would be devastating. I actually think anything like that is highly unlikely but the vast use of bitcoin in drug deals, ransomware, etc. leaves it vulnerable to racketeering laws and confiscation as proceeds of a criminal enterprise.

Prosecutor:"Mr. Andhappy, please prove that you obtained your bitcoins lawfully"

37: "I don't have to. They're mine and I have a right to own them"

Prosecutor: "Your Honor, please direct the witness to answer the question"

37: (now you have a choice, go to jail for contempt or answer truthfully) "I can't prove where I got them. The records are private"

Judge: "You have 10 days to produce the required records or your bitcoin will be confiscated." (sound of hammer)

You see, in the US we have a lot of crazy laws which you may not agree with (and you and I would probably agree with each other on this front). We have things like racketeering, civil (and criminal) forfeiture, tax evasion, and so forth where the gubmint CAN take you property if you operate too close to criminal activity. Let's say you bought a bitcoin from a ransomware attacker without knowing, perhaps through an exchange, you MAY be subject to confiscation. If each bitcoin can be individually traced, which seems to be the case through the public ledgers, then you are on the hook regardless of whether or not you knew who your counterparty was. Farfetched, absolutely. But possible, yes. So you are putting a lot of faith in the security of your fortune with these kinds of issues unsettled in the legal system.

You see, if you argue bitcoins are fungible (all the same like gold bullion coins) then the government can confiscate them by Congressional action and/or Executive Order. If they are not fungible (each one individually traceable) then you better be careful to trace the provenance of each one you buy.

A physical ETF is already being considered (see my earlier post on the GreyScale announcement). If that ever gets approved ... wow!

Why would you want to own an ETF that holds "physical" bitcoin? (or USD or Swiss Francs, or Euros for that matter) The fund will track the exchange rates and you will pay a management fee on top so you are guaranteed to lose. (Many might be thinking, money market funds and savings accounts but those put the money to use to earn a small return).

What we as investors ...

You should probably drop the term "investor." You are speculating. There is nothing wrong with that. I speculate on lots of things. But there is no underlying fundamental analysis to support the future value of a bitcoin. No one can say with any degree of certainty whether it will be $174,000 (double its current value) a year from now or $33,000 (half its current value) or something much higher or lower. Personally I don't see it going to zero and could easily see it double. But that is based on nothing more than gut feeling and I don't make investment decisions on gut feeling.

There is one thing for certain, almost no government likes bitcoin so it will be facing headwinds and legal attacks everywhere. They used to say "Don't fight the Fed." Bitcoin speculators are fighting all the central banks in the world and mos of the governments.

 

[SecondAttempt]

Can we move on to NFT's? I hear they are the next best way to achieve financial independence!

Something else I shake my head at!

The greater fool theory is at work there.

 

[37andhappy]

I guess your point is that only people who own bitcoin can possibly have valid opinions and insights into bit coin. I hope you see the obvious flaw in that logic.

Of course a no-coiner can have valid views. You have not raised any that are compelling, but you have raised many that are typically raised by smarter but conservative (typically older) people who use forums like this to help them on their journey of internal conflict and ultimate self acceptance relating to the legitimacy of Bitcoin as an asset class . But yes obviously one does not need to own an asset to have valid views on it - that I agree with. And believe me, I went through the same process as you are doing now, in figuring this out - I just got there a little quicker.

But Americans can be barred from owning it. I don't see that happening but it is likely possible. Americans were barred from owning gold for decades and the courts upheld it.

Scary sounding FUD, but in practice its impossible to "bar" a person from knowing the private keys to decentralized mathematical algorithm on a block chain in cyberspace and retaining that knowledge in their head. Doable in theory with physical things like gold firearms - well we see how successful that was. Good luck banning a number.

... the vast use of bitcoin in drug deals, ransomware, etc. leaves it vulnerable to racketeering laws and confiscation as proceeds of a criminal enterprise.

FUD, and a non-sensical narrative since fiat currency and established banks are by FAR the biggest players in this area. It's a bit like alarmist fuddy-duddies back in the day calling for a "ban of the internet because it is used for porn" type argument.

Prosecutor:"Mr. Andhappy, please prove that you obtained your bitcoins lawfully"

37: "I don't have to. They're mine and I have a right to own them"

Prosecutor: "Your Honor, please direct the witness to answer the question"

37: (now you have a choice, go to jail for contempt or answer truthfully) "I can't prove where I got them. The records are private"

Judge: "You have 10 days to produce the required records or your bitcoin will be confiscated." (sound of hammer)

"Bought them on an a licensed exchange, fully compliant with KYC with legitimate income for which I have a record of" / "Bought a BTC ETF on a US exchange as a licensed security" / "Bought with "clean hands" (in that I had no knowledge of their prior ownership chain)" / "You can't "confiscate" a number in my head (which just happens to be the private key to my coins)" / "Right to silence and not to self-incriminate" / "Good luck judge but I am now based oversees and you no jurisdiction over me".

In the US we have a lot of crazy laws which you may not agree with (and you and I would probably agree with each other on this front). We have things like racketeering, civil (and criminal) forfeiture, tax evasion, and so forth where the gubmint CAN take you property if you operate too close to criminal activity.

Bitcoin is actually our defence against the risks such crazy laws pose to us. Indeed not just in the US, but in every country globally.

Why would you want to own an ETF that holds "physical" bitcoin? (or USD or Swiss Francs, or Euros for that matter) The fund will track the exchange rates and you will pay a management fee on top so you are guaranteed to lose. (Many might be thinking, money market funds and savings accounts but those put the money to use to earn a small return).

There is a large class of people who would prefer the custodianship that an ETF offers, as will as being able to use their existing brokerage platform to transact. Many large funds may be set up to only invest in such vehicles. BTC via an ETF may be easier to assign on death. ETF may appeal to those who believe such a structure has less risk of loss of assess to coins. Same reason why people might buy a gold ETF. With any ETF concept is the same. People are prepared to accept some slippage for the perceived benefits.

Also, many independent investment advisors are only able to put their clients into listed funds. (Can you image how many of such "wealth advisors" and the total amount of wealth they manage, will start to be allocated to BTC, via an ETF? Clients are asking for it, and no "investment advisor" wants to look dumb by having a zero allocation, so they are all inclined to recommend allocating a small amount of BTC exposure to their clients.

You should probably drop the term "investor." You are speculating. There is nothing wrong with that. I speculate on lots of things. But there is no underlying fundamental analysis to support the future value of a bitcoin.

Semantics, but sure, yeah call it speculation if you like. The end result is the same. As for the fundamental analysis, the analysis one needs to make is predicting future demand. (This quite different from looking at traditional income earning company valuation metrics, and it takes some time for us value investors to get our heads around, and is likely part of what may making you feel uncomfortable allocating funds to this asset).

There is one thing for certain, almost no government likes bitcoin so it will be facing headwinds and legal attacks everywhere. They used to say "Don't fight the Fed." Bitcoin speculators are fighting all the central banks in the world and mos of the governments.

Well established FUD. Priced in. Power to the people. Whack-a-mole. If you can't beat'em, join'em. First amendment. Can't ban a number combined with free thought. Old man yells at cloud.

 

[captain3d]

If you think Crypto has a chance of becoming the backbone of future financial transactions of all sorts = Buy

If you do not think this is possible = Avoid

There is not too much point in arguing corner case details at this point as they will be resolved in either of the above outcomes. The start of this thread was to show a progression towards broader acceptance of crypto in the financial industry. I do not see why anyone should be annoyed by that. Even if I was not interested in buying into crypto I would be happy for the people that are interested.

 

[MichaelB]

If you think Crypto has a chance of becoming the backbone of future financial transactions of all sorts = Buy

If you do not think this is possible = Avoid

There is not too much point in arguing corner case details at this point as they will be resolved in either of the above outcomes. The start of this thread was to show a progression towards broader acceptance of crypto in the financial industry. I do not see why anyone should be annoyed by that. Even if I was not interested in buying into crypto I would be happy for the people that are interested.

It’s not as simple as believe & buy or disbelieve and ignore, and disbelief does not mean people are annoyed. At least part of this discussion is an examination of the claims to see if they are valid. Many people reading this thread do not have a view either way and look to inform.

Personally, I think much of the rationale underpinning the argument to buy is what Stephen Colbert called “truthiness” which is defined thusly

Truthiness is the belief or assertion that a particular statement is true based on the intuition or perceptions of some individual or individuals, without regard to evidence, logic, intellectual examination, or facts.[1][2] Truthiness can range from ignorant assertions of falsehoods to deliberate duplicity or propaganda intended to sway opinions

A question asked early on in this thread was “is an allocation to crypto part of a portfolio recommended for people in early retirement”. I’d say the answer to that is overwhelmingly No.

Can crypto be traded and lots of money made? Sure, why not. TBH, anything can be traded.

 

[REWahoo]

Can crypto be traded and lots of money made or lost? Sure, why not.

Updated for you to insure 100% factual truthiness.

 

[MichaelB]

Updated for you to insure 100% factual truthiness.

Yes indeed and well said.

 

[captain3d]

But if you think the future financial services will use crypto the answer is overwhelmingly yes. The question is more about how much %.

Asking questions to learn more is good. But lots of comments come from the 'it is a scam' perspective not from a genuine interest to learn.

 

[captain3d]

Updated for you to insure 100% factual truthiness.

Which investment strategy does this not apply to?

 

[Markola]

Asking questions to learn more is good. But lots of comments come from the 'it is a scam' perspective not from a genuine interest to learn.

And the flip side is, the crypto evangelist won’t address genuine questions. If someone raises a legitimate question, the crypto evangelist simply says “incorrect” without addressing it. For example, everyone knows that Bitcoin uses vast amounts of electricity, furthering the world’s reliance on fossil fuels. The evangelist simply replies, “No, it doesn’t,” usually followed up with something along the lines of “You’re too old to understand.” It’s maddening, like that SNL skit with the tobacco lawyer.

 

[mpeirce]

Sure, most retirees shouldn’t worry about crypto, but it is a very interesting topic and is worth learning about if one is interested.

 

[jim584672]

I'm heavily invested in WIN buttons from 1974. At least they are real.

 

[mpeirce]

For example, everyone knows that Bitcoin uses vast amounts of electricity, furthering the world’s reliance on fossil fuels.

Huh? By this logic that fleet of Tesla electric cars, which everyone knows use vast amounts of electricity, are furthering the world’s reliance on fossil fuels.