This is exactly what I'd be interested in if it were available in the US. Do you (or anyone else who's reading this thread) know why something like this passive crypto index fund isn't available in the US?
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This is exactly what I'd be interested in if it were available in the US. Do you (or anyone else who's reading this thread) know why something like this passive crypto index fund isn't available in the US?
Invictus do not want to deal with Us regulation right now even though the fund has been running successfully for four years. A US citizen can not officially register but as the C20 token is traded on several small exchanges it is still possible to buy it as an individual. But you have to be a bit of a crypto nerd to work out all the steps and they are switching from the Ethereum network to Polygon that would need a sell and rebuy for US folk. So not exactly an easy buy.
The main difficulty is that US regulation has not clarified what is a security vs property etc so these fund companies are waiting.
I do currently own some C20
Bitcoin can be ‘cloned’ via a hard fork and have an alternative set of software code but it will no longer be Bitcoin. It will have another name eg BitcoinCash and will have to build its own market share.
Think of it as staff leaving one company to set up another competitor because they think they know better.
Bitcoin has a theoretical 21 million coin limit. But 90% are already mined. It will take 100+ years to get to the last one and millions have already been lost so 15 mill max is more realistic now
Markola
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Why would there ever be a consensus to destroy the very quality that investors use it for?
My GBTC story.
6/9/2017 Bought 2 shares @ $480.00/share
11/27/2017 Sold 1 share @ $1,341.00/share
Decided to hold on and play with the house money to see if bitcoin went to the moon or back to zero. GBTC since then split to 91 shares and I bought 9 more at $31.94/share to even the share total at 100.
As of today it's worth $3,194.00 and up just over 300%. It WAS over 400% until the latest retreat. Anyway, now that I'm playing with house money it will be fun to watch where it goes. I hear Grayscale will convert it to an ETF when it's possible and that should be good for the fund value.
6/9/2017 Bought 2 shares @ $480.00/share
11/27/2017 Sold 1 share @ $1,341.00/share
Decided to hold on and play with the house money to see if bitcoin went to the moon or back to zero. GBTC since then split to 91 shares and I bought 9 more at $31.94/share to even the share total at 100.
As of today it's worth $3,194.00 and up just over 300%. It WAS over 400% until the latest retreat. Anyway, now that I'm playing with house money it will be fun to watch where it goes. I hear Grayscale will convert it to an ETF when it's possible and that should be good for the fund value.
KCGeezer
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That point was made in the story and I do understand why it isn’t likely to happen. The response from 3d makes sense as well. A cloned or hard fork isn’t exactly the same as bitcoin.
My only point is that there’s really no limit. Only an agreement on not changing the variable in the source code and an agreement regarding the sanctity of it’s name. It’s really an agreement of worth between large numbers of people. It’s another example of the type of agreement described in Sapiens: A Brief History of Humankind. ‘Money’ is what we agree it is. Whether that’s seashells, beads, gold coins, paper bills, or digits in a computer.
The London upgrade to Ethereum introduced a burn mechanism. Basically ETH is created by the folks who mine it to validate transactions and the burn takes coins out of circulation. You can see the coin supply over time here: https://etherscan.io/chart/ethersupplygrowth
That article indicated that we saw a couple deflationary weeks. Now that I look at the whole curve it looks like it's still slightly inflationary, though you can see the knee in the curve.
From my understanding the next big change to ETH will cause it to go from proof of work to proof of stake and will then become a true deflationary coin.
Here is a good description of PoW and PoS. Ms. Alden isn't terse, but she's wicked smart and worth reading.
If you have to hard fork to change the code it is no longer Bitcoin.
If a path is 1 mile long and someone forks and creates a 2 mile path to the same destination you do not complain that the original path has no distance limit. The fork is really a different thing.
Anyone buying Bitcoin on sale? Or just scared where it is heading like me.
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anywho, towards the end of 2021 i started DCA into crypto. as of right now, it's about 1% of my total portfolio.
a lot of people may be distracted by all the meme coins getting created and dismiss the entire thing as speculative, but there is real value being created.
here's a simple example. binance and crypto.com have their own coin. seems silly. but is it really? for them, is it better for people to buy shares of their company on a stock exchange, or is it better to buy their coin? value of shares go up and down just like the value of a coin.
NFTs are getting bad rap right now because people are paying obscene amounts of money for pictures of cats and dogs. but the underlying technology has real value, being able to prove ownership. this can replace legal documents.
all of this can go to nothing, so in a sense, it is speculation. but we can't deny that there's also real innovation happening here.
anywho, towards the end of 2021 i started DCA into crypto. as of right now, it's about 1% of my total portfolio.
a lot of people may be distracted by all the meme coins getting created and dismiss the entire thing as speculative, but there is real value being created.
here's a simple example. binance and crypto.com have their own coin. seems silly. but is it really? for them, is it better for people to buy shares of their company on a stock exchange, or is it better to buy their coin? value of shares go up and down just like the value of a coin.
NFTs are getting bad rap right now because people are paying obscene amounts of money for pictures of cats and dogs. but the underlying technology has real value, being able to prove ownership. this can replace legal documents.
all of this can go to nothing, so in a sense, it is speculation. but we can't deny that there's also real innovation happening here.
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OverThinkMuch
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Not quite, because a gold ETF has a deposit of real gold. ETFs are not allowed to hold Bitcoin, so instead they hold Bitcoin futures.
Futures have an expiration date, so when that date arrives, the Bitcoin ETF needs to sell it's existing holdings and buy new Bitcoin futures. There can be costs involved which are not incurred by Bitcoin holders or other ETFs.
BITO was the first Bitcoin futures ETF, launched just months ago. Investors poured a billion into it, and mostly ignored the 2 similar ETFs that followed.
OverThinkMuch
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I invested a small percent in Bitcoin and Ethereum last year. Crypto's volatility has allowed it to sometimes earn 4x, with the risk it could drop -80% or more. So on average that did seem like a better than normal odds to beat the stock market.
But notice how BTC followed the Mar 2020 crash, and in general follows events that impact the U.S. stock market. So if the stock market is in trouble, so is Bitcoin.
I've sold all my crypto because I think it's a risky year for the stock market, and therefore for crypto. Inflation and valuations are high, and the Fed seems to change tactics monthly. It's never a guarantee one way or the other, but if it's a riskier year for the stock market, I'd rather not ride a multiple of that risk downwards. So I'm going to wait for lower valuations and risk and then buy back into BTC and ETH.
(I've also closed my leveraged S&P 500 positions and reduced my holdings in various aggressive growth stocks. But I still retain a high allocation to equities - I'm not avoiding the market, just avoiding higher risk).
But notice how BTC followed the Mar 2020 crash, and in general follows events that impact the U.S. stock market. So if the stock market is in trouble, so is Bitcoin.
I've sold all my crypto because I think it's a risky year for the stock market, and therefore for crypto. Inflation and valuations are high, and the Fed seems to change tactics monthly. It's never a guarantee one way or the other, but if it's a riskier year for the stock market, I'd rather not ride a multiple of that risk downwards. So I'm going to wait for lower valuations and risk and then buy back into BTC and ETH.
(I've also closed my leveraged S&P 500 positions and reduced my holdings in various aggressive growth stocks. But I still retain a high allocation to equities - I'm not avoiding the market, just avoiding higher risk).
Markola
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Thank you, especially for the Alden article. Do you ever get the feeling that the best minds one has ever encountered are working in the crypto space? I am impressed again and again. I am not that smart but my judgement has served me reasonably well, and this essay makes me want to hold off on ETH until after this transition to POS is more complete.
Running_Man
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Crypto Currencies in the last 2 months have lost 1/3 or 1 trillion in value, this is 5% of US GDP. If the US stock market were to merely fall back to the historical valuation of stock market to GDP it would need to fall 60% to 1920 which would be still 3X over the 2009 valuation and equal to the 2020 valuation. Companies falling the fastest right now are the companies with the highest sales to stock price ratings as interest rates rise.
Be interesting to see how Crypto will fare in that environment, were it to occur. I will still hold a minimum of 5% of my portfolio in Bitcoin/ETH going forward.
Be interesting to see how Crypto will fare in that environment, were it to occur. I will still hold a minimum of 5% of my portfolio in Bitcoin/ETH going forward.
Bitcoin ETF’s do not hold futures. They hold Bitcoin.
The US does not have a Bitcoin ETF. Other countries do.
The US has GBTC which is a close end fund that holds Bitcoin.
nope, you're stuck.
this is where the whole "custodial" thing comes in. binance owns the keys, you can't do anything without their permission, as opposed to you owning the keys to your wallet.
the flip side, of course, is you have no one to call if you accidentally forget/lose your keys. everything is lost forever.
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Markola
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I mean, yeah, this is a darn good example and argument for self-custody. But what is the simplest solution that will stand the test of time, unlike every single other device in my entire life, which goes obsolete before the lifecycle of, say, any pair of my underwear? I have underwear that’s lasted longer than any iPhone I’ve owned. There is a bewildering array of self-custody gadgets and services and flavors on the market. Which of them are going to survive the market for one or two underwear years without going dark or getting hacked or lost or damaged and leaving me stranded somehow? Meanwhile Coinbase is the market leader, is US based, is embracing regulation, its cold storage/vault is pretty simple and, presumably, it’s encryption is constantly updated. What’s a poor HODLer to do?
it doesn't need to be complicated. i just store all my private keys in my password manager, which already encrypts everything and has backups in the cloud. add 2FA on top of that and it's basically impossible to hack.
freedom2022
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I will buy a little bit. But I don't want to catch a falling knife. Looks like the resistance level is $32,000.
This x2. I’ve been dollar cost averaging on the way down…. I guess we’ll see how wise I’ve been in a few years?
I am not sure what point you are trying to make. The question was what was the difference between a bitcoin ETF (if one were to exist in the USA) and holding bitcoin directly. The comparison between holding GLD and bullion is spot on. The ETF supposedly will hold bitcoin to back up its shares, but there will be potential counterparty risk and management fees. The SLV ETF last year changed its prospectus to say that it may not track the spot price of silver in volatile situations due to not being able to source the enough of the actual product. The same might be true of a bitcoin ETF.
When BITO came out, the sources I follow explained that BITO is a mechanism for large hedge funds to use the futures to do hedging and not a good vehicle for the average investor to invest in bitcoin. They said that there was a "contango" effect caused by BITO having to constantly roll over its futures contracts at higher prices in a rising market. This was said to drain off 15% or 20% of the gain annually. I am not sure if this effect would operate in revers in a declining market.
In any case, I think trying to compare BITO to a true bitcoin ETF is comparing apples to oranges.
The question was whether the lack of approval in the USA for a true bitcoin ETF is due to a desire to protect investors from a dangerous product. I think the approval of BITO and not the other ETFs was more due to wanting to help the "connected" financial entities more than protect the consumer.
If the motivation was to protect and it was seen as dangerous, why would Fidelity already be running a true bitcoin ETF in Canada?
When BITO came out, the sources I follow explained that BITO is a mechanism for large hedge funds to use the futures to do hedging and not a good vehicle for the average investor to invest in bitcoin. They said that there was a "contango" effect caused by BITO having to constantly roll over its futures contracts at higher prices in a rising market. This was said to drain off 15% or 20% of the gain annually. I am not sure if this effect would operate in revers in a declining market.
In any case, I think trying to compare BITO to a true bitcoin ETF is comparing apples to oranges.
The question was whether the lack of approval in the USA for a true bitcoin ETF is due to a desire to protect investors from a dangerous product. I think the approval of BITO and not the other ETFs was more due to wanting to help the "connected" financial entities more than protect the consumer.
If the motivation was to protect and it was seen as dangerous, why would Fidelity already be running a true bitcoin ETF in Canada?
Gold ETF provides some value versus buying actual gold - you don't need to deal with physical storage, you can sell 1% of it, etc.
But none of those apply to crypto, so if one wants to invest in bitcoin, there doesn't seem to be any practical reason to prefer bitcoin ETF vs actual bitcoin.
Holding pure bitcoin on your own wallet poses some risk of losing your keys etc. Keeping pure bitcoin on an exchange is actually holding an IOU from the exchange for some bitcoin.
With a bitcoin ETF, you can hold it in your brokerage account and you can buy and sell options on the ETF. At a price top you might sell calls or buy puts to hedge your bitcoin. You could also hold bitcoin in your wallet and buy puts on the ETF in your brokerage account to hedge the bitcoin in your wallet.
You can also hold the ETF in a retirement account to defer or avoid capital gain taxes. You could use a service like ITrustCapital to hold crypto in an IRA, but they also have fees.
At this point, you could also buy puts on BITO to hedge at a top. But I guess people don't have to worry about that right now
With a bitcoin ETF, you can hold it in your brokerage account and you can buy and sell options on the ETF. At a price top you might sell calls or buy puts to hedge your bitcoin. You could also hold bitcoin in your wallet and buy puts on the ETF in your brokerage account to hedge the bitcoin in your wallet.
You can also hold the ETF in a retirement account to defer or avoid capital gain taxes. You could use a service like ITrustCapital to hold crypto in an IRA, but they also have fees.
At this point, you could also buy puts on BITO to hedge at a top. But I guess people don't have to worry about that right now
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