Join Early Retirement Today
Closed Thread
 
Thread Tools Search this Thread Display Modes
So we FINALLY have a SEC approved BTC ETF!
Old 10-15-2021, 11:34 PM   #1
Recycles dryer sheets
 
Join Date: Jun 2008
Posts: 167
So we FINALLY have a SEC approved BTC ETF!

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.
37andhappy is online now  
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-16-2021, 01:09 AM   #2
Recycles dryer sheets
 
Join Date: Aug 2019
Location: Anytown
Posts: 314
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?
SecondAttempt is online now  
Old 10-16-2021, 03:27 AM   #3
Recycles dryer sheets
 
Join Date: Jun 2008
Posts: 167
Quote:
Originally Posted by SecondAttempt View Post
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.
37andhappy is online now  
Old 10-16-2021, 04:17 AM   #4
Dryer sheet wannabe
 
Join Date: Sep 2021
Posts: 24
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.
freedom2022 is offline  
Old 10-16-2021, 11:14 AM   #5
Thinks s/he gets paid by the post
 
Join Date: Nov 2015
Posts: 2,316
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.
bobandsherry is offline  
Old 10-16-2021, 11:26 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 12,533
(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.
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is offline  
Old 10-16-2021, 11:31 AM   #7
Thinks s/he gets paid by the post
 
Join Date: Feb 2014
Posts: 2,129
Quote:
Originally Posted by bobandsherry View Post
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.
jim584672 is offline  
Old 10-16-2021, 11:38 AM   #8
Dryer sheet wannabe
 
Join Date: Sep 2021
Posts: 24
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.
freedom2022 is offline  
Old 10-16-2021, 11:43 AM   #9
Recycles dryer sheets
 
Join Date: Nov 2012
Location: Kearneysville
Posts: 196
I may dabble if there is an option market for it, but I still can't make sense of crypto.
Sniggle is offline  
Old 10-16-2021, 12:04 PM   #10
Full time employment: Posting here.
 
Join Date: Dec 2016
Posts: 524
Quote:
Originally Posted by SecondAttempt View Post
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.
Starsky is offline  
Old 10-16-2021, 12:09 PM   #11
Thinks s/he gets paid by the post
 
Join Date: Nov 2015
Posts: 2,316
Quote:
Originally Posted by jim584672 View Post
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?
bobandsherry is offline  
Old 10-16-2021, 12:31 PM   #12
Thinks s/he gets paid by the post
 
Join Date: Feb 2014
Posts: 2,129
Quote:
Originally Posted by bobandsherry View Post
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.
jim584672 is offline  
Old 10-16-2021, 01:06 PM   #13
Administrator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Land of Florida Man
Posts: 35,677
I canít believe Iíve made it this far without a crypto-ETF.
MichaelB is offline  
Old 10-16-2021, 01:22 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 30,593
Quote:
Originally Posted by 37andhappy View Post
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.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline  
Old 10-16-2021, 01:38 PM   #15
Thinks s/he gets paid by the post
Major Tom's Avatar
 
Join Date: Nov 2009
Location: SF East Bay
Posts: 3,791
Quote:
Originally Posted by MichaelB View Post
I canít believe Iíve made it this far without a crypto-ETF.
Yes, how on earth have we all managed!
__________________
Contentedly ER, with 3 furry friends (now, sadly, 1).
Planning my escape to the wide open spaces in my campervan (with my remaining kitty, of course!)
On a mission to become the world's second most boring man.

Major Tom is offline  
Old 10-16-2021, 02:11 PM   #16
Thinks s/he gets paid by the post
Markola's Avatar
 
Join Date: Nov 2013
Location: Twin Cities
Posts: 2,748
I want to make money and have a fear of missing out (FOMO). Bitcoin is:

A decade+ old bit of computer code. I usually donít 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 donít own gold for that reason.

I donít play in the global currency markets, so why would I start speculating in digital currency marketsÖÖ

Ö..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, YahooÖ

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

Not really useable for commerce, or if it is, Iím 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 Iím 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?
Markola is offline  
Old 10-16-2021, 02:22 PM   #17
Thinks s/he gets paid by the post
ownyourfuture's Avatar
 
Join Date: Jun 2013
Posts: 1,188
Quote:
Originally Posted by jim584672 View Post
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
__________________
"No beast so fierce but knows some touch of pity, but I know none, therefore am no beast"
ownyourfuture is offline  
Old 10-16-2021, 02:25 PM   #18
Thinks s/he gets paid by the post
 
Join Date: Nov 2015
Posts: 2,316
Quote:
Originally Posted by ownyourfuture View Post
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-t...trinsic-value/
bobandsherry is offline  
Old 10-16-2021, 02:36 PM   #19
Thinks s/he gets paid by the post
ownyourfuture's Avatar
 
Join Date: Jun 2013
Posts: 1,188
Quote:
Originally Posted by bobandsherry View Post
Not really true, stocks do have intrinsic value.

https://www.fool.com/investing/how-t...trinsic-value/
I should've been more clear. I was referring to a worst case scenario. Like GM in 2009.
__________________
"No beast so fierce but knows some touch of pity, but I know none, therefore am no beast"
ownyourfuture is offline  
Old 10-16-2021, 02:40 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 30,593
+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.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline  
Closed Thread

Tags
bitcoin, btc etf


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
May have found bug when entering Soc Sec link FIRECalc support 7 08-19-2018 01:46 PM
when are treasury bond etf's not treasury bond etf's ? mathjak107 FIRE and Money 1 07-20-2015 08:26 AM
Yipee! Finally approved for HD HSA!!!!!! Corporate ORphan Health and Early Retirement 9 04-06-2011 09:48 AM
New ETF: Sudan-Free social ETF Olav23 FIRE and Money 2 06-28-2007 09:03 AM
Finally, finally out of lurkerdom.... panhead Hi, I am... 1 06-26-2002 10:18 AM

» Quick Links

 
All times are GMT -6. The time now is 02:22 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.