Bitcoin etf approval

[salimshady23]

News has just dropped that 11 bitcoin ETFs have been approved. What exactly does this mean for bitcoin, does this mean that the prices are guaranteed to go up within the next year or two, or is there a possibility of risk to where bitcoin may drop? as far as investments, is this a good time to buy bitcoin, or would it be better to invest within a bitcoin mining stock such as $RIOT?

[TheAnonOne]

News has just dropped that 11 bitcoin ETFs have been approved. What exactly does this mean for bitcoin, does this mean that the prices are guaranteed to go up within the next year or two, or is there a possibility of risk to where bitcoin may drop? as far as investments, is this a good time to buy bitcoin, or would it be better to invest within a bitcoin mining stock such as $RIOT?

Is this a serious line of questions? No one knows. It might be priced in, it might not be, but its 100% NOT guaranteed to go up.

[salimshady23]

im just a little new to this, sorry if it sounded like a stupid question, but thank you

[Financial.Velociraptor]

FYI,

Bitcoin (BTC) scarcely moved on the announcement.  ETH and a lot of other cryptos moved 10% up or more.  The BTC effect appears to have been priced in.  More volatile assets appear to be moving. 

I'd say on the whole, this approval has been a 'done deal' for at least six months and is largely 'priced in'.  For BTC to outperform means the market has to had underestimated the ETF demand for coin.   I leave it as an exercise for the reader to determine if markets are truly perfectly efficient when forward looking.

[Juan Ponce de León]

I don't think you can price in the amount of boomer money that is going to come in via these ETFs over the next few years.

[salimshady23]

would their be any crypto currencys or any stocks that have to do with crypto mining that you would expect to go up due to this approval?

[Juan Ponce de León]

would their be any crypto currencys or any stocks that have to do with crypto mining that you would expect to go up due to this approval?

Very hard to say as so much depends on their individual balance sheets and holdings etc.  Hashrate keeps going to new ATH's plus the halving coming up I imagine a lot of miners will be in trouble until the price does multiples.

[Telecaster]

Here's how I would evaluate it:

The promise of Bitcoin as per the Bitcoin whitepaper and its proponents lies in the capabilities of Bitcoin itself e.g. trustless transactions across borders, banking the unbanked, not controlled by a central entity, self-custody, immutable transactions on the blockchain, and so on.

That promise is why it has value, right?  It is a financial instrument that has different capabilities compared to the traditional financial system.   

Let's look at the investment case for the Bitcoin ETF:

The Bitcoin ETF is a good investment--because it doesn't require annoying blockchain transactions

The Bitcoin ETF is a good investment--because it is centralized.

The Bitcoin ETF is a good investment--because you can't self-custody

The Bitcoin ETF is a good investment--because it can't be used as a currency or for payments.

The Bitcoin ETF is a good investment--because it can't transfer money across borders.

So if you strip all of the utility and utility out of Bitcoin, it has more value as an investment.  Does that seem just a wee bit screwy to anyone else? 

[Juan Ponce de León]

Let's be clear, holding the ETF is not holding Bitcoin and apart from tracking the price won't give you any of the features or advantages of holding real bitcoin.  Just like holding an oil ETF won't give you actual barrels of oil, but it will still hopefully track the price movements of oil.

[MustacheAndaHalf]

slimshady - I argued the exact opposite weeks ago, that Bitcoin fans have over-hyped this ETF launch, and will get less enthusiasm than expected.  I plan to short one of those Bitcoin stocks (RIOT, MARA, MSTR) and wait for the hype to fade.

Telecaster - Just to add to evidence of centralization, most spot Bitcoin ETFs (when I checked SEC records months ago) listed Coinbase as their Bitcoin custodian.

[MustacheAndaHalf]

Setting aside the hype for a moment, I like lower expense ratios.  Some GBTC customers may not be able to afford selling (tax impact), which lets them keep charging 1.5%.  But I don't buy the "liquidity" argument made by Grayscale's CEO - I suspect they're about to lose a lot of assets to competition.  Most new spot Bitcoin ETFs plan to charge about a 0.25% annual expense ratio.

My next hope is to see iShares apply their expertise to put & call options on their new ETF (IBIT).  Most likely, Bitcoin is so volatile I won't like the prices, but that will be interesting and new to see.

[ChpBstrd]

Here's how I would evaluate it:

The promise of Bitcoin as per the Bitcoin whitepaper and its proponents lies in the capabilities of Bitcoin itself e.g. trustless transactions across borders, banking the unbanked, not controlled by a central entity, self-custody, immutable transactions on the blockchain, and so on.

That promise is why it has value, right?  It is a financial instrument that has different capabilities compared to the traditional financial system.   

Let's look at the investment case for the Bitcoin ETF:

The Bitcoin ETF is a good investment--because it doesn't require annoying blockchain transactions

The Bitcoin ETF is a good investment--because it is centralized.

The Bitcoin ETF is a good investment--because you can't self-custody

The Bitcoin ETF is a good investment--because it can't be used as a currency or for payments.

The Bitcoin ETF is a good investment--because it can't transfer money across borders.

So if you strip all of the utility out of Bitcoin, it has more value as an investment.  Does that seem just a wee bit screwy to anyone else?

It is the year 2024 and Bitcoin is still not being used as was proposed in 2009. Instead it is still being used for crime and as a speculative asset, expected to go up in the future due to events like halving and ETFs. The actual arrival of ETFs is perhaps the last imaginable step in making this speculative asset easier for the non-technical public to access.

So what's next for Bitcoin, now that there are no barriers to investment?

I still don't see it becoming a real currency. If such uses for Bitcoin have not yet developed after 15 years of intense effort, I don't think year 16 is likely to be the special one. Thus Bitcoin will remain a speculative vehicle, albeit without the driving narrative that demand could take off once it is made more accessible (by trusted third parties).

In the post-ETF world, Bitcoin will be another speculative commodity like gold (GLD) or silver (SLV) which you can buy in ETF form but which produce no earnings and are therefore only held long-term by people who appreciate their diversification potential (and those who believe crackpot internet theories).

These ETFs drive a significant amount of investment, but they are not earth shaking news. Earth-shaking news would be a development that causes people to use cryptocurrency for routine transactions. If you believe the barrier to that occurring is a technical or regulatory issue on the way to being fixed, then maybe it makes sense to think Bitcoin has a future. But it would make more sense for someone holding that view to think the next thing after Bitcoin has that future (i.e. why we're not watching movies on digital VHS tapes, even though such devices are technically possible).

So Bitcoin will remain a greater-fool-theory speculative investment, a bet on the growing supply of greater fools, which is not a bad idea when phrased that way. Perhaps we'll hear new rationales too - apps for interpersonal payments, regulatory frameworks, etc.

But I'll prefer to own productive assets with earnings or at least the potential for earnings. Earnings seem to be a stronger basis for a FIRE portfolio than whatever narrative is next for gold, silver, or crypto.

[MustacheAndaHalf]

Buffet and Munger hated Bitcoin for years.  On today's launch of spot Bitcoin ETFs, I'll try putting words in Charlie Munger's mouth: "I'm glad I'm dead."

[WayDownSouth]

I'm surprised but also not surprised there wasn't much movement at all in bitcoin (the crypto) today. Regardless of it being priced in or not, I expected a larger spike - even if it was institutionally created and fake as fuck.

I'm expecting it to divebomb if it doesn't pump up tomorrow. We'll see what happens. I was planning to short it heavily as most of you already read on the other thread about crypto allocation but I haven't found the right entry point. Among other things I think the SEC's post on twitter Tuesday afternoon really wrecked some potential for movement.

I do not believe it will hold here at the mid/high 40's for long before it either flies or dies by at least $10k.

[Heckler]

To the mooonnnn!!!!









(jk), I'm out.  At least after the IPO.

[erjkism]

Here's how I would evaluate it:

The promise of Bitcoin as per the Bitcoin whitepaper and its proponents lies in the capabilities of Bitcoin itself e.g. trustless transactions across borders, banking the unbanked, not controlled by a central entity, self-custody, immutable transactions on the blockchain, and so on.

That promise is why it has value, right?  It is a financial instrument that has different capabilities compared to the traditional financial system.   

Let's look at the investment case for the Bitcoin ETF:

The Bitcoin ETF is a good investment--because it doesn't require annoying blockchain transactions

The Bitcoin ETF is a good investment--because it is centralized.

The Bitcoin ETF is a good investment--because you can't self-custody

The Bitcoin ETF is a good investment--because it can't be used as a currency or for payments.

The Bitcoin ETF is a good investment--because it can't transfer money across borders.

So if you strip all of the utility out of Bitcoin, it has more value as an investment.  Does that seem just a wee bit screwy to anyone else?

It is the year 2024 and Bitcoin is still not being used as was proposed in 2009. Instead it is still being used for crime and as a speculative asset, expected to go up in the future due to events like halving and ETFs. The actual arrival of ETFs is perhaps the last imaginable step in making this speculative asset easier for the non-technical public to access.

So what's next for Bitcoin, now that there are no barriers to investment?

I still don't see it becoming a real currency. If such uses for Bitcoin have not yet developed after 15 years of intense effort, I don't think year 16 is likely to be the special one. Thus Bitcoin will remain a speculative vehicle, albeit without the driving narrative that demand could take off once it is made more accessible (by trusted third parties).

In the post-ETF world, Bitcoin will be another speculative commodity like gold (GLD) or silver (SLV) which you can buy in ETF form but which produce no earnings and are therefore only held long-term by people who appreciate their diversification potential (and those who believe crackpot internet theories).

These ETFs drive a significant amount of investment, but they are not earth shaking news. Earth-shaking news would be a development that causes people to use cryptocurrency for routine transactions. If you believe the barrier to that occurring is a technical or regulatory issue on the way to being fixed, then maybe it makes sense to think Bitcoin has a future. But it would make more sense for someone holding that view to think the next thing after Bitcoin has that future (i.e. why we're not watching movies on digital VHS tapes, even though such devices are technically possible).

So Bitcoin will remain a greater-fool-theory speculative investment, a bet on the growing supply of greater fools, which is not a bad idea when phrased that way. Perhaps we'll hear new rationales too - apps for interpersonal payments, regulatory frameworks, etc.

But I'll prefer to own productive assets with earnings or at least the potential for earnings. Earnings seem to be a stronger basis for a FIRE portfolio than whatever narrative is next for gold, silver, or crypto.

inflation hedge

[Financial.Velociraptor]

Buy the rumor, sell the news?

BTC down around 6% this morning.  ETH and other coins continue to rise.

[WayDownSouth]

Looks like the pain has begun for BTC holders - got a couple quick short entries in and closed already for about $1,830 in profit. See what happens after lunch, if this works out it could be an easy $5k day. If BTC is at 42,500 or less by 5pm today expect a bloodbath by Tuesday.

[dangbe]

https://finance.yahoo.com/news/vanguard-blocks-spot-bitcoin-etf-083220594.html?guccounter=1

Vanguard has banned the bitcoin ETFs.
Kind of disappointing.

[Telecaster]

inflation hedge

Is it though?  Bitcoin is down about 35% since the peak.   Inflation is up about 10% since that time.   If you were counting on Bitcoin as an inflation hedge you got punched in the face.   

[WayDownSouth]

https://finance.yahoo.com/news/vanguard-blocks-spot-bitcoin-etf-083220594.html?guccounter=1

Vanguard has banned the bitcoin ETFs.
Kind of disappointing.

They're stupidly trying to appeal to people by making a political statement. Any publicity is good publicity, right? Just ask Bud Light.

Bad move on Vanguard's part. Why try to control what securities people can and cannot buy on your platform? I bet they'll reconsider. Maybe not. Maybe they decided to let their older brother Blackrock deal with that area. If you don't wanna buy it, don't buy it but why dictate what you offer your clients in this fashion?

[MustacheAndaHalf]

https://finance.yahoo.com/news/vanguard-blocks-spot-bitcoin-etf-083220594.html?guccounter=1

Vanguard has banned the bitcoin ETFs.
Kind of disappointing.

Vanguard strikes me as inconsistent.  You cannot buy UPRO at Vanguard because it offers 3x leverage on the S&P 500.  Yet you can buy SPY call options with 20x leverage, also on the S&P 500.

Back in Dec 2021, I held BITO call options in my Vanguard account, which gave me 2x leverage to Bitcoin futures (I sold in the first week of 2022 owing to the level of inflation, among other factors).

[FINate]

Vanguard is client owned. If you don't like this policy vote for other board members. Or vote with your feet and move your funds elsewhere.

[Telecaster]

Vanguard is client owned. If you don't like this policy vote for other board members. Or vote with your feet and move your funds elsewhere.

I find the level of caterwauling interesting.  It is trivially easy to open a new brokerage account.  You don't even have to move your funds.  In the time it takes to bitch about Vanguard you can open a new account at Fidelity or where ever you like. If you want to move your IRA or some such it is still very easy to do.   

The interesting part is that it is just easy to buy Bitcoin on Coinbase.  But people don't want native Bitcoin.  They want the Bitcoin ETF. 

[Metalcat]

Huh...we've had Bitcoin ETFs for a few years.

[ATtiny85]

Vanguard is client owned. If you don't like this policy vote for other board members. Or vote with your feet and move your funds elsewhere.

I find the level of caterwauling interesting.  It is trivially easy to open a new brokerage account.  You don't even have to move your funds.  In the time it takes to bitch about Vanguard you can open a new account at Fidelity or where ever you like. If you want to move your IRA or some such it is still very easy to do.   

The interesting part is that it is just easy to buy Bitcoin on Coinbase.  But people don't want native Bitcoin.  They want the Bitcoin ETF.

Thanks, I was scratching my head wondering why people care. As you say, just go to the store that has the product you want. My VTSAX and I won’t miss you.

[WayDownSouth]

Vanguard is client owned. If you don't like this policy vote for other board members. Or vote with your feet and move your funds elsewhere.

I find the level of caterwauling interesting.  It is trivially easy to open a new brokerage account.  You don't even have to move your funds.  In the time it takes to bitch about Vanguard you can open a new account at Fidelity or where ever you like. If you want to move your IRA or some such it is still very easy to do.   

The interesting part is that it is just easy to buy Bitcoin on Coinbase.  But people don't want native Bitcoin.  They want the Bitcoin ETF.

it's because people choose a service or brokerage that they really like, feel comfortable using, already know the ins/outs, etc.. And then they pull shit like that which rightfully makes people upset.

you're right, it's not that hard to switch brokers or simply open a new one and add funds but then you have another account to deal with, another platform to learn, new rules, new passwords, etc..

I think people also like to speak up to mention their dissatisfaction and make it clear that it's unacceptable as a client. I was using a major brokerage with an amazing trading platform that was purchased by scwabb and I was so pissed off I literally just stopped trading for a while. Found a different platform and it's still nowhere near as good.

[FINate]

Vanguard is client owned. If you don't like this policy vote for other board members. Or vote with your feet and move your funds elsewhere.

I find the level of caterwauling interesting.  It is trivially easy to open a new brokerage account.  You don't even have to move your funds.  In the time it takes to bitch about Vanguard you can open a new account at Fidelity or where ever you like. If you want to move your IRA or some such it is still very easy to do.   

The interesting part is that it is just easy to buy Bitcoin on Coinbase.  But people don't want native Bitcoin.  They want the Bitcoin ETF.

Thanks, I was scratching my head wondering why people care. As you say, just go to the store that has the product you want. My VTSAX and I won’t miss you.

Not accusing anyone here... but I think some holders of BTC are pissed that the $8 trillion in Vanguard Group won't be as easily tapped to make their line go up.

[Juan Ponce de León]

Vanguard is client owned. If you don't like this policy vote for other board members. Or vote with your feet and move your funds elsewhere.

I find the level of caterwauling interesting.  It is trivially easy to open a new brokerage account.  You don't even have to move your funds.  In the time it takes to bitch about Vanguard you can open a new account at Fidelity or where ever you like. If you want to move your IRA or some such it is still very easy to do.   

The interesting part is that it is just easy to buy Bitcoin on Coinbase.  But people don't want native Bitcoin.  They want the Bitcoin ETF.

Thanks, I was scratching my head wondering why people care. As you say, just go to the store that has the product you want. My VTSAX and I won’t miss you.

Not accusing anyone here... but I think some holders of BTC are pissed that the $8 trillion in Vanguard Group won't be as easily tapped to make their line go up.

More likely they are pissed that they have an account with a supposed full service brokerage who are now blocking them from certain products they want to buy.

[FINate]

Vanguard is client owned. If you don't like this policy vote for other board members. Or vote with your feet and move your funds elsewhere.

I find the level of caterwauling interesting.  It is trivially easy to open a new brokerage account.  You don't even have to move your funds.  In the time it takes to bitch about Vanguard you can open a new account at Fidelity or where ever you like. If you want to move your IRA or some such it is still very easy to do.   

The interesting part is that it is just easy to buy Bitcoin on Coinbase.  But people don't want native Bitcoin.  They want the Bitcoin ETF.

Thanks, I was scratching my head wondering why people care. As you say, just go to the store that has the product you want. My VTSAX and I won’t miss you.

Not accusing anyone here... but I think some holders of BTC are pissed that the $8 trillion in Vanguard Group won't be as easily tapped to make their line go up.

More likely they are pissed that they have an account with a supposed full service brokerage who are now blocking them from certain products they want to buy.

Every brokerage decides what funds it allows. Their system, their rules. I like Vanguard even more now :) For those that are pissed, just open a brokerage somewhere else, super easy.

[Telecaster]

it's because people choose a service or brokerage that they really like, feel comfortable using, already know the ins/outs, etc.. And then they pull shit like that which rightfully makes people upset.

Interesting.  Some years ago I wanted to open a self-employed 401(k).  I had accounts at Vanguard (still do in fact), so that's where I started but their process was long and cumbersome, so I went with Fidelity instead which was lot easier, partly because they have local offices which Vanguard doesn't.   

It didn't occur to me to get upset with Vanguard.  I just went the company that provided the service I wanted.   I was happy I found an easier solution.   I see long posts on Reddit and such where people are seething with anger at Vanguard.   Some people are even claiming they are calling Vanguard and bitching them out.   That type of reaction is foreign to me. In less time that it takes to call Vanguard they could be up and running at another brokerage.   I'd rather complete the task and use the rest of the time and energy doing something fun.  I dunno.  Maybe they think bitching out Vanguard is fun.   Not my cuppa.   

[Telecaster]

Not accusing anyone here... but I think some holders of BTC are pissed that the $8 trillion in Vanguard Group won't be as easily tapped to make their line go up.

I think there is a kernel of truth to that.   I think also there is a real belief that the Bitcoin ETF is the gateway to widespread Bitcoin adoption and Vanguard is blocking that progress.   

[MustacheAndaHalf]

I find the level of caterwauling interesting.  It is trivially easy to open a new brokerage account.  You don't even have to move your funds.  In the time it takes to bitch about Vanguard you can open a new account at Fidelity or where ever you like. If you want to move your IRA or some such it is still very easy to do.   

For context, I'm an expat.  Expats cannot open a new account at Fidelity.  Congress makes laws without considering the impact on Americans abroad, which causes brokerages to close expat accounts.

"Unfortunately, we do not open accounts for any new customers residing outside the United States."
https://www.fidelity.com/accounts/services/investors_outside_US_faq.shtml

[MustacheAndaHalf]

Spot Bitcoin ETFs will impact Self-Directed IRAs (SDIRA).  Where regular IRAs had no solution, some SDIRAs offered a way to buy Bitcoin.  With a captive market, they could charge 1%/trade.  I don't see how they can keep that going when spot Bitcoin ETFs (and all ETFs) cost $0/trade.  So SDIRAs will likely become less popular with their inferior costs.

Speaking of which, Grayscale waited until very recently to lower their expense ratios.  GBTC now charges 1.5% (it was 2%), and ETHE now charges 2.5% (down from 3%).

There's irony in Grayscale suing to allow a spot Bitcoin ETF, winning, and now having to compete against the spot Bitcoin ETFs they unleashed.  Without their court case, they could still charge 2%/year in fees - just as they've done for years.

Bitcoin futures ETFs were allowed because a Bitcoin futures market existed.  But the courts felt it was arbitrary to allow a futures Bitcoin ETF but not a spot Bitcoin ETF.  That same reasoning does not extend to Ethereum or other crypto currencies - they might require separate legal fights.

I expect Grayscale's GBTC to lose customers, turning the court case they won into a pyrrhic victory.  I don't expect Grayscale to lead the charge on Ethereum ETFs.  Ethereum has no futures market and no futures ETFs.  The SEC can cite no prior approvals, and be on more solid footing in court.

[GuitarStv]

Ethereum ETF was a disaster though...i thought under trump crypto would thrive...

Crypto is thriving under Trump.

Trumpcoin did exactly what it was supposed to . . . give people an untraceable way to send large quantities of cash directly to Trump.  He has been raking in the money.  The whole environmental trainwreck of crypto is built around grift.

[Heckler]

Ethereum ETF was a disaster though...i thought under trump crypto would thrive...

Crypto is thriving under Trump.

Trumpcoin did exactly what it was supposed to . . . give people an untraceable way to send large quantities of cash directly to Trump.  He has been raking in the money.  The whole environmental trainwreck of crypto is built around grift.

Trump is thriving under crypto?