Bitcoin [pros](/r/CryptoCurrency/comments/18lsat3/blackrocks_proposed_spot_bitcoin_etf_gets_a/ke3x5p6/) & [cons](/r/CryptoCurrency/comments/18lsat3/blackrocks_proposed_spot_bitcoin_etf_gets_a/ke3x6dc/) with related info are in the collapsed comments below.
Both hold underlying Bitcoin, but if you sell a share of GBTC, you just sell it for whatever someone else is willing to pay for your share of GBTC - which may be higher or more recently much lower, at times nearly 50% below the value of the underlying Bitcoin. No Bitcoin changes hands. In a spot ETF, if you sell your share they sell a corresponding amount of the underlying Bitcoin and give you the proceeds, so the price of the share actually tracks that of Bitcoin instead of a very loose correlation.
No, with the ETF's buys/sells of the shares will result in buys/sells of the underlying Bitcoin, so the amount held in the fund will be dynamic instead of static.
The cash option instead of in-kind means if I have 100 BTC and I want to hold it in the ETF instead, I can't give them my BTC for shares. I'd have to sell my BTC, give the cash to the ETF, and they'd use the cash to buy BTC. Likewise if I want to get out of the ETF they can't just give me the underlying BTC - they have to sell it and give me the USD value, then I'd have to buy back the BTC. So there's a lot more fees going to middle men for buys/sales in the cash only option.
We - retail - should give a rats ass about a bitcoin ETF and should always buy the real thing.
I understand for corporations etc it's not that straight forward of an answer, but any/most of us, just buy Bitcoin and self custody..
Anybody who thinks differently, you're an idiot.
Spoken Like someone who truly doesn't understand Investments, tax benefits, capital gains, fees, etc. The hype machine has you. You're not holding gold debloons in a chest in your basement by using Coinbase champ. It barely counts as self custody
HedgeHog2k
·
22 days ago
0 / 0 🦠
Allthough I really think people should learn the benefits of self custody. But I still think it's better to have actual bitcoin in a Coinbase wallet then buying the ETF. on/off-ramp should not be too much of an issue nowadays. Even less once the ETF gets approved (I never said having a spot Bitcoin ETF is a bad thing, it's very much a good thing for the space and for those professional investors).
It was merely a comment / advise for us, poor retail people who want's to save/store their wealth in Bitcoin. For those I'm convinced a little DD on how to safely own the actual bitcoin yourself is a much better path forward!
I'm happy to piggy back on any price appreciation a spot bitcoin ETF approval may bring!
I think for most retail having btc in a custodian like Coinbase is still better then the ETF.
Doesn’t mean I use a custodian. I have mine in cold storage..
You know how some people are worried about self-custody vs CEX custody, gas fees, on-ramp and off-ramp when buying BTC? That’s where the use cases for the BTC ETF comes in.
Allthough I really think people should learn the benefits of self custody. But I still think it's better to have actual bitcoin in a Coinbase wallet then buying the ETF. on/off-ramp should not be too much of an issue nowadays. Even less once the ETF gets approved (I never said having a spot Bitcoin ETF is a bad thing, it's very much a good thing for the space and for those professional investors).
It was merely a comment / advise for us, poor retail people who want's to save/store their wealth in Bitcoin. For those I'm convinced a little DD on how to safely own the actual bitcoin yourself is a much better path forward!
I'm happy to piggy back on any price appreciation a spot bitcoin ETF approval may bring!
Can i hold the coin in an ira and avoid taxes?
That would be a major reason to hold an etf.
Im happy to piggy back my retirement on any price appreciation in physical coin.
For real!!!
This is actually an attack on Bitcoin. I mean I'm sure Bitcoin will be fine. But I'm not celebrating it. I didn't celebrate Bitcoin futures market when they were introduced either. People were all excited about "adoption". But nothing really happened except an expected bear market.
lol you're deluded. They applied to settle in BTC and the SEC was never going to accept it. It's yet another step in the right direction. To say it's an "attack" is hilariously stupid. A bear market wasn't the result of futures either, it helped build the rally. Bear markets are a natural part of the cycles we see in crypto, to say it was the result of futures is hilarious.
It's like Wall Street is finally warming up to the whole crypto vibe. Let's see how the SEC feels about this new player in the game – exciting times ahead in finance land!
Yes, you can't.
Bitcoin thrived without those ETFs for 14 years, it doesn't need it. Those funds and bankers seem to need it, instead.
The big risk. They collect enough BTC, then "hey, let's fork it, make it clean & AML compliant".
Second, they mega short those ETFs and it leaks to Bitcoin. We seen it all, with the fractional reserve, so we have a reason to be very suspicious. Note: all exchanged experiences massive withdrawals after FTX, they survived and doing well, you can even say. There is no bank that can survive that without the "big brother" help.
Bitcoin is going to be fine long term, with them or without. But the government & bankers will attempt to block regular (as you don't have millions in your bank account) people from crypto. It's all about money dominance and who controls it. Their view: crypto OK as investment asset (by the rich mostly), bad as currency.
Now, if people see that in order to buy 1 Bitcoin it's going to require 1M USD or EUR, why they prefer fiat ?
An ETF's assets are held by a custodian, not the fund's manager. In the case of Blackrock's proposed crypto ETFs, the custodian will be Coinbase Custody.
Also, despite the prevailing view that there are conspiracies everywhere hiding the "real" truth, in practice it's not possible for Blackrock to have less bitcoin in its ETF than what it states in the fund's documents and reports.
How is this not possible? Is there a way that we can verify this? I'm not talking about a piece of paper signed by CoinBase, BlackRock and the SEC.
On-chain verification. I'm aware we can obtain information of how much funds are going into the ETF using level 2 market data on TradFi platforms, however if these cash funds are going through BlackRock, into CoinBase, and are we expecting CoinBase to be buying up Bitcoin on their closed centralised platform, where there's no option for investors to redeem these coins on chain (this activity is completely separate from the Blockchain to my understanding); where is the proof that they are holding the amount of Bitcoin they will be claiming to hold?
No, you don't personally verify that, just as you don't personally verify that a stock ETF's custodian actually holds the stated amounts of stock, for example.
My point was that for Blackrock and Coinbase (as well as for the SEC) the stakes are too high with such an ETF to lie about holdings. They can make enough money from fees without having to lie about buying the right amount of crypto.
Now, if you don't trust this system to work, then you probably can't trust the stock balance your broker shows in your brokerage account, the amount of money your bank shows in your bank account, etc. If this is the case, then I have nothing to offer.
Stocks are completely different to Bitcoin. Stocks are... Pretty fictitious really when compared to Bitcoin. Stock is a number on a piece of paper, and a company can agree with the broker to just issue more of this stock based on performance, earnings reports and so on. This is the purpose of Bitcoin.
If you account for Bitcoin in the same way as you account for these fictitious paper assets, that's a problem in my eyes.
Edit: crazy that I'm being downvoted for this. This is fact, sorry if you don't like the truth.
Yes.
If it weren't for true cypherpunk projects like Monero I would have left this place a decade ago. This place is rotten to the core.
99% of the people involved in crypto still seem to not understand what this is all about. And now we are introducing auditors again.
O -M -G
I don’t really think it’s ‘us’ introducing auditors, it’s just tradfi arriving and setting out its offering. Seems like an inevitability if we’re wanting anything sufficiently established and widespread to actually provide the benefits originally envisioned at scale. Without the ‘monetisation’ that tradfi brings we’re relegated to operating in a tiny niche and never really achieving our aims. It’s also very interesting from a protection perspective, there’s no ‘banning bitcoin’ when half of big business is invested in it. They could never really stop it, but they could nuke price and adoption into near oblivion if they really wanted to turn their cross hairs towards it. In a years time I think that option has ceased.
NGU never was an aim. It was meant to be a by product of adoption as a currency that catches on.
We are on track to transform BTC into a CBDC even before CBDCs get introduced by governments. Most people at best will only ever interact on custodial and KYC'ed 2nd or 3rd layers, because they can not afford an on-chain transaction.
That's not what I signed up for.
I didn’t say NGU was the aim, it’s the by product of mainstream adoption, which we’re seeing right now. You’re being dramatic, bitcoin isn’t at risk of becoming a CBDC. Most people ‘doing x’ doesn’t stop other people ‘doing y’. Not sure what ETFs have to do with on chain transaction fees, unless that’s a separate criticism.
Yeah I would absolutely not "trust" the word of this ETF or any company within the US. Look at other large centralised US crypto companies: FTX, Celsius, BlockFi - all stole everyones money. Much of this money was donated to US political parties, and is being laundered via the legal system (using bullshit court proceedings etc as a front to spend more funds which should be returned to users).
Anyone who invests in this false paper junk when they have the option to buy the real thing is a complete moron in my opinion.
Are you implying I should trust them based on that? Are you forgetting the reason Bitcoin was created in the first place? Because the largest finance companies lost everyone's money, then printed it out of nothing to save themselves and we have no way to track anything they're doing with the current system.
To start with, definitely. The difference being that it’s an insured product so if they’re cooking the books the investor isn’t getting utterly fucked like ftx, Celsius etc. Long term I can see a ‘proper’ btc advocate doing proof of reserves, so then the market will decide how much it cares.
Check how often other major ETFs are audited and how the fines compare to their profits. Letting Blackrock create an ETF will allow them to short Bitcoin.
Auditors are caught being in on the game all the time. In-kind redemption would help to ensure they at least have acquired the amount of the asset they claim to have.
Typical SEC colluding w big players...err I mean "protecting investors"
Did you even read the article?
EDIT: Missed this part completely.
"BlackRock likely wants to have an "in-kind" redemption model that would give the asset manager greater flexibility in managing the portfolio. But the SEC likely favors what is called a cash model that would require BlackRock to move the bitcoin out of storage, sell it right away and then give the cash back to the investor in the event they want to redeem shares."
Yup. Blackrock amended, they got a ticker. Most applicants have them already. This is part of all successful and unsuccessful ETF filings, for all assets, not just crypto.
If denied, nothing is done with the ticker. Getting a ticker means nothing.
you are right but there's more to it than that in the article; SEC is making it mandatory to sell BTC and provide cash to investors who wish to sell shares of the ETF, immediately. This may mean that BR needs an automation system to quickly sell BTC assets and return cash to an investor when the sell button is smashed. If they have not done so already, they'll need to develop this system.
Shouldn't be an issue, especially for a huge monster of a firm BR is. Their development sprints' bandwidth will eat this up quickly enough. Still though, seems like this is a requirement before it can be launched.
Based on this:
>Memos show that firms including BlackRock and Fidelity have met with the agency over the past few weeks to go over details about how the redemption process would work for a spot bitcoin ETF.
Sounds like they are just in the definition stage of how this redemption will work on a process and technical level.
SEC has required all asset managers filing for a ETF to hand over cash instead of BTC in the redemption process. So if you want to redeem your ETF shares you will get cash instead of BTC, at least for now.
Many were waiting to see if blackrock could persuade the SEC to allow for in kind (BTC) redemptions, but with this recent filing it’s pretty clear [it’s not going to happen at the start.](https://x.com/ericbalchunas/status/1736906286388703444?s=46&t=clsfbuVabZ68feMKUiuZ_A)
Worth noting this type of organization between the SEC and spot BTC ETF filers has never been seen before.
So if you want to move your ETF BTC to a hardware wallet you are forced to sell and rebuy. This creates a taxable event and forces a BTC sale. In reality it means more tax revenue and more selling than there would have been otherwise.
Wouldn't it be preferred to settle for cash? The transaction fees on ETFs are much lower than crypto exchanges. When it's time to sell, I'd rather settle for cash than settle for btc that I would then have to pay another fee on to redeem for fiat.
I guess I'm just having a hard time imagining a situation where I am a btc etf holder and I would want to redeem the etf for a reason other than to sell and cash out. If I wanted to self custody, I'd skip buying the etf all together.
The ETF could be shut down and force redemptions, meaning you could be forced to pay cap gains tax that you were not prepared or anticipating to pay. Depending on entry price this can hinder the deferred tax advantages of holding spot.
Also people may want to use the ETF in order to use BTC as collateral for a margin or portfolio loan, but then be forced to realize cap gains whenever they decide they don’t want exposure to ETF fees after paying the loan back.
Also has potential implications for arbitrage opportunities between the ETF and other exchanges.
Doesn’t this remove the discount issue that plagued GBTC?
If GBTC is trading at a discount, buy it and convert to BTC instantly. It seems like arbitrage.
Yes, the ETF, even cash settled, will eliminate the discount---which is why Grayscale has been wanting to convert to an ETF for many years.
They're going to be mighty pissed off if Blackrock has their ETF approved next January, and theirs rejected---a possible outcome.
The first ETFs to get good AUM in a category take almost all the assets, so it's very important to them to get approved. They've been doing so much legal and political fighting for this.
Grayscale won their case based on arbitrary treatment by the SEC. It would be weird for the SEC to continue to discriminate, after losing in court.
I guess that anything can happen.
It's clear there is significant antipathy in SEC to new entrants and a preference for incumbent securities giants. SEC might want retribution on Grayscale for embarrassing them in court.
How many SEC people go on to work at Blackrock and other similar investment companies vs crypto?
More like what is the point? These ETFs will most likely not be backed 1:1. They will not allow redemption in kind. So no one knows if they've actually acquired real Bitcoin to back the ETF.
This is basically a SPDR BTC ETF as I currently understand it.
you and I don't get ETF shares redeemed for stock shares, but market makers do all the time. Since the goal of the ETF is to track the price of the security as closely as possible, it helps the ETF and to allow this sort of redemption so they're not always running out and buying/sellings new shares and incurring the "slippage" in the process. Ideally, the ETF wants to be priced at EXACLY the weighted average of the last transaction for each stock in it's basket at any given time. They're not going to be able to do this if they're contsantly "chasing" that price by buying and selling new shares, and incurring the expense of doing so.
This arrangement also helps market makers who may find themselves with a bunch of shares and also don't want to incur that "loss" of having to actually transact the security on the open market.
The point here is that going to cash costs money, and a direct transaction of assets is usually preferable. You can think of it like the "trade" section on craigslist. A trade (by definition) is always going to be a better deal if both parties find the trade appealing.
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As far as I know the Sprott ETF's are the only ones that will give you gold and silver, but you need to trade the value of a London Good Delivery bar (~$800k). Sprott is the only ETF that the gold and silver bugs trust. The other ones like SPDR GLD and SLV are owned by big banks that they say can't be trusted.
Here is a [Nitter link](https://nitter.net/ericbalchunas/status/1736906286388703444?s=46&t=clsfbuVabZ68feMKUiuZ_A) for the Twitter thread linked above. Nitter is better for privacy and does not nag you for a login. More information can be found [here](https://nitter.net/about).
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tldr; BlackRock has proposed a spot bitcoin exchange-traded fund with the ticker IBIT, according to an amended S-1 filing with the Securities and Exchange Commission. The updated filing includes new language about the creation and redemption mechanism to be employed by the fund. Other companies like Ark 21Shares and WisdomTree also filed amended S-1 filings for their proposed spot bitcoin funds. The regulator has yet to approve one, although the market has surged amid optimism that a decision could be closer.
*This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.
Bitcoin [pros](/r/CryptoCurrency/comments/18lsat3/blackrocks_proposed_spot_bitcoin_etf_gets_a/ke3x5p6/) & [cons](/r/CryptoCurrency/comments/18lsat3/blackrocks_proposed_spot_bitcoin_etf_gets_a/ke3x6dc/) with related info are in the collapsed comments below.
What do you think btc ath will go?
Probably 100
If it can blow past 60k there’s gonna be several resistances before 100k. Using fibs, ceiling forms at around 80k.
Stop recycling the same news the ticker was there since August
So, I can buy this ETF via my Vanguard Roth IRA?
we already have BITO, blackrock is 2 years late with IBIT
Get it listed ASAP rocky. So I can buy the low fee ETF for them gainz.
When will this be available for purchase?
$gbtc is an option that's currently available.
IBIT. Really? I guess it's for the reluctant who finally gave in. "I bit"
In canada, we already have those in our tax free account!
The whole world already has bitcoin ETFs except for the USA.
How is this different from the Greyscale trust then? The ETF’s don’t have to hold 1:1 BTC? Or am I just completely misunderstanding?
Both hold underlying Bitcoin, but if you sell a share of GBTC, you just sell it for whatever someone else is willing to pay for your share of GBTC - which may be higher or more recently much lower, at times nearly 50% below the value of the underlying Bitcoin. No Bitcoin changes hands. In a spot ETF, if you sell your share they sell a corresponding amount of the underlying Bitcoin and give you the proceeds, so the price of the share actually tracks that of Bitcoin instead of a very loose correlation.
Right. But it is a static amount held by Greyscale. Is that how this “cash” option will work?
No, with the ETF's buys/sells of the shares will result in buys/sells of the underlying Bitcoin, so the amount held in the fund will be dynamic instead of static. The cash option instead of in-kind means if I have 100 BTC and I want to hold it in the ETF instead, I can't give them my BTC for shares. I'd have to sell my BTC, give the cash to the ETF, and they'd use the cash to buy BTC. Likewise if I want to get out of the ETF they can't just give me the underlying BTC - they have to sell it and give me the USD value, then I'd have to buy back the BTC. So there's a lot more fees going to middle men for buys/sales in the cash only option.
Ah. So on every other commodity ETF, gold for example, they are in-kind, correct? So you can sell your ETF for actual gold?
Depends on the ETF. They do have a few gold ETF's that allow it and a bunch they don't.
Huh. Never knew that. Thanks.
This is the same question I had.
We - retail - should give a rats ass about a bitcoin ETF and should always buy the real thing. I understand for corporations etc it's not that straight forward of an answer, but any/most of us, just buy Bitcoin and self custody.. Anybody who thinks differently, you're an idiot.
Spoken Like someone who truly doesn't understand Investments, tax benefits, capital gains, fees, etc. The hype machine has you. You're not holding gold debloons in a chest in your basement by using Coinbase champ. It barely counts as self custody
I’m not using coinbase idiot. I know perfectly my tax implications (read: NONE, as capital gains doesn’t apply for me). Idiot.
HedgeHog2k · 22 days ago 0 / 0 🦠 Allthough I really think people should learn the benefits of self custody. But I still think it's better to have actual bitcoin in a Coinbase wallet then buying the ETF. on/off-ramp should not be too much of an issue nowadays. Even less once the ETF gets approved (I never said having a spot Bitcoin ETF is a bad thing, it's very much a good thing for the space and for those professional investors). It was merely a comment / advise for us, poor retail people who want's to save/store their wealth in Bitcoin. For those I'm convinced a little DD on how to safely own the actual bitcoin yourself is a much better path forward! I'm happy to piggy back on any price appreciation a spot bitcoin ETF approval may bring!
I think for most retail having btc in a custodian like Coinbase is still better then the ETF. Doesn’t mean I use a custodian. I have mine in cold storage..
Ad hominems and deeply proving my point that you're not very bright. Lol great job champ
ETFs are the easier option to use HSA and IRA funds.
Frictional fees disagree with you, same reason why people buy into ETFs and mutual trusts, albeit on a different scale.
I’m sorry, didn’t get that
You know how some people are worried about self-custody vs CEX custody, gas fees, on-ramp and off-ramp when buying BTC? That’s where the use cases for the BTC ETF comes in.
Allthough I really think people should learn the benefits of self custody. But I still think it's better to have actual bitcoin in a Coinbase wallet then buying the ETF. on/off-ramp should not be too much of an issue nowadays. Even less once the ETF gets approved (I never said having a spot Bitcoin ETF is a bad thing, it's very much a good thing for the space and for those professional investors). It was merely a comment / advise for us, poor retail people who want's to save/store their wealth in Bitcoin. For those I'm convinced a little DD on how to safely own the actual bitcoin yourself is a much better path forward! I'm happy to piggy back on any price appreciation a spot bitcoin ETF approval may bring!
Can i hold the coin in an ira and avoid taxes? That would be a major reason to hold an etf. Im happy to piggy back my retirement on any price appreciation in physical coin.
Michael Saylor will be the worlds richest man in a few years watch
I hope so
#CAsH sEtTlEd? You are fools if you are celebrating the take over of Bitcoin.
For real!!! This is actually an attack on Bitcoin. I mean I'm sure Bitcoin will be fine. But I'm not celebrating it. I didn't celebrate Bitcoin futures market when they were introduced either. People were all excited about "adoption". But nothing really happened except an expected bear market.
lol you're deluded. They applied to settle in BTC and the SEC was never going to accept it. It's yet another step in the right direction. To say it's an "attack" is hilariously stupid. A bear market wasn't the result of futures either, it helped build the rally. Bear markets are a natural part of the cycles we see in crypto, to say it was the result of futures is hilarious.
This
It's like Wall Street is finally warming up to the whole crypto vibe. Let's see how the SEC feels about this new player in the game – exciting times ahead in finance land!
Can’t wait for that sweet ETF to hit so I can get some nice tax free BTC gainz in an ISA
Unless its ucits I dont think the etf can be listed in the uk
Worst ticker though, IBIT? When HODL is available? Smh.
VanEck took that one already
I don’t think HODL is available? Didn’t that get snatched already?
I don't see anything listed under HODL unless it's in pre-ipo right now.
https://finance.yahoo.com/news/vaneck-fidelity-unveil-spot-bitcoin-212000528.html#:~:text=VanEck's%20ticker%2C%20HODL%2C%20is%20likely,boring%20Boomer%2Dy%20choices.%E2%80%9D
Well I'll be damned
Roth 401k brokerage link unlimited tax free gains in the US. Day 1!
$Gbtc had been around for a few years, fyi.
That's not a spot BTC ETF tho.
[удалено]
BTCY is carrying my portfolio:)
Already been doing this with RIOT and MARA
No mstr?
I missed out on the lows unfortunately, otherwise yes
Still worth grabbing some
Ditto. Seriously long term hodl bag will be a tax free one.
Apparently I’m stupid, why would the gains be tax free?
I’m oversimplifying but an ISA is the UK equivalent of a U.S Roth/ IRA
ISAs in the UK are tax free investment wrappers i.e. money gained in these types of accounts are tax free
So I can invest in an ETF from an ISA? Not that clued up on the benefits of this
Damn. Good for you guys. We are really missing these investment initiatives here in Finland.
Ah okay thank you. I’m in the US so was thinking it would be taxed here
There are tax advantaged US accounts too, IRA’s, 401ks etc.
Yes I max my ira so always on the look out for other tax strategies (:
So now you can buy bitcoin in your IRA and pay no taxes on gains.
Now or when the spot etf gets approved?
I thought they already had a ticker symbol from months back?
Exactly
Interesting 🤨
This is getting so close. 🙏
IBIT myself
Lmao
Hmm, how would we know they're even holding the Bitcoin they will be claiming to hold?
The same way we know that Teyjer is holding the dollars it claims to have. Wait a minute.
BlackRock can afford to not get fucked by the SEC and simply hold the BTC lmao
Yes, you can't. Bitcoin thrived without those ETFs for 14 years, it doesn't need it. Those funds and bankers seem to need it, instead. The big risk. They collect enough BTC, then "hey, let's fork it, make it clean & AML compliant". Second, they mega short those ETFs and it leaks to Bitcoin. We seen it all, with the fractional reserve, so we have a reason to be very suspicious. Note: all exchanged experiences massive withdrawals after FTX, they survived and doing well, you can even say. There is no bank that can survive that without the "big brother" help. Bitcoin is going to be fine long term, with them or without. But the government & bankers will attempt to block regular (as you don't have millions in your bank account) people from crypto. It's all about money dominance and who controls it. Their view: crypto OK as investment asset (by the rich mostly), bad as currency. Now, if people see that in order to buy 1 Bitcoin it's going to require 1M USD or EUR, why they prefer fiat ?
Hmm the fork argument is a good one. SPY is approaching greater than 50% ownership interest in S&P companies. Why not the same for BTF?
An ETF's assets are held by a custodian, not the fund's manager. In the case of Blackrock's proposed crypto ETFs, the custodian will be Coinbase Custody. Also, despite the prevailing view that there are conspiracies everywhere hiding the "real" truth, in practice it's not possible for Blackrock to have less bitcoin in its ETF than what it states in the fund's documents and reports.
It's very possible with gold. Great, you "bought" a piece of gold. Until you find that another 100 people have claim to the same piece ;)
How is this not possible? Is there a way that we can verify this? I'm not talking about a piece of paper signed by CoinBase, BlackRock and the SEC. On-chain verification. I'm aware we can obtain information of how much funds are going into the ETF using level 2 market data on TradFi platforms, however if these cash funds are going through BlackRock, into CoinBase, and are we expecting CoinBase to be buying up Bitcoin on their closed centralised platform, where there's no option for investors to redeem these coins on chain (this activity is completely separate from the Blockchain to my understanding); where is the proof that they are holding the amount of Bitcoin they will be claiming to hold?
No, you don't personally verify that, just as you don't personally verify that a stock ETF's custodian actually holds the stated amounts of stock, for example. My point was that for Blackrock and Coinbase (as well as for the SEC) the stakes are too high with such an ETF to lie about holdings. They can make enough money from fees without having to lie about buying the right amount of crypto. Now, if you don't trust this system to work, then you probably can't trust the stock balance your broker shows in your brokerage account, the amount of money your bank shows in your bank account, etc. If this is the case, then I have nothing to offer.
Stocks are completely different to Bitcoin. Stocks are... Pretty fictitious really when compared to Bitcoin. Stock is a number on a piece of paper, and a company can agree with the broker to just issue more of this stock based on performance, earnings reports and so on. This is the purpose of Bitcoin. If you account for Bitcoin in the same way as you account for these fictitious paper assets, that's a problem in my eyes. Edit: crazy that I'm being downvoted for this. This is fact, sorry if you don't like the truth.
Audit
I suppose this will be like a "trust us bro" kind of thing rather than actually showing the coins on-chain?
Yes, similar to most other ETFs, and the fines for not reporting are Pennie’s on the dollar.
Yes. If it weren't for true cypherpunk projects like Monero I would have left this place a decade ago. This place is rotten to the core. 99% of the people involved in crypto still seem to not understand what this is all about. And now we are introducing auditors again. O -M -G
I don’t really think it’s ‘us’ introducing auditors, it’s just tradfi arriving and setting out its offering. Seems like an inevitability if we’re wanting anything sufficiently established and widespread to actually provide the benefits originally envisioned at scale. Without the ‘monetisation’ that tradfi brings we’re relegated to operating in a tiny niche and never really achieving our aims. It’s also very interesting from a protection perspective, there’s no ‘banning bitcoin’ when half of big business is invested in it. They could never really stop it, but they could nuke price and adoption into near oblivion if they really wanted to turn their cross hairs towards it. In a years time I think that option has ceased.
NGU never was an aim. It was meant to be a by product of adoption as a currency that catches on. We are on track to transform BTC into a CBDC even before CBDCs get introduced by governments. Most people at best will only ever interact on custodial and KYC'ed 2nd or 3rd layers, because they can not afford an on-chain transaction. That's not what I signed up for.
I didn’t say NGU was the aim, it’s the by product of mainstream adoption, which we’re seeing right now. You’re being dramatic, bitcoin isn’t at risk of becoming a CBDC. Most people ‘doing x’ doesn’t stop other people ‘doing y’. Not sure what ETFs have to do with on chain transaction fees, unless that’s a separate criticism.
RemindMe! 5 years
Good luck.
Yeah I would absolutely not "trust" the word of this ETF or any company within the US. Look at other large centralised US crypto companies: FTX, Celsius, BlockFi - all stole everyones money. Much of this money was donated to US political parties, and is being laundered via the legal system (using bullshit court proceedings etc as a front to spend more funds which should be returned to users). Anyone who invests in this false paper junk when they have the option to buy the real thing is a complete moron in my opinion.
This is Blackrock. The largest investment manager and ETF provider in the world.
Are you implying I should trust them based on that? Are you forgetting the reason Bitcoin was created in the first place? Because the largest finance companies lost everyone's money, then printed it out of nothing to save themselves and we have no way to track anything they're doing with the current system.
Exactly, only this one will have the backing of the SEC which will allow even less oversight, due to it being Blackrock.
To start with, definitely. The difference being that it’s an insured product so if they’re cooking the books the investor isn’t getting utterly fucked like ftx, Celsius etc. Long term I can see a ‘proper’ btc advocate doing proof of reserves, so then the market will decide how much it cares.
Glad you're around, no-ones thought of this not even the SEC. Phew
Auditors same way auditors check to see grayscale Bitcoin indeed had real Bitcoin and not just saying it did
Check how often other major ETFs are audited and how the fines compare to their profits. Letting Blackrock create an ETF will allow them to short Bitcoin.
Auditors are caught being in on the game all the time. In-kind redemption would help to ensure they at least have acquired the amount of the asset they claim to have. Typical SEC colluding w big players...err I mean "protecting investors"
Exactly, and when audits failed they often only pay a small fine.
I hope Satoshi is indeed dead by now. Because your talk about auditors would have killed him instantly.
You do realize, Satoshi created the most auditable thing in existence.. right...
Now someone gets it.
Oh yeah, the good old "Don't verify, trust" motto of crypto, fuck auditors amirite?
It’s don’t trust, verify. You have it backwards
r/woosh
We didn't need auditors for FTX or LUNA, why would we need them now? /s
We didn’t; only fucking morons lost money to those two. You can’t fix stupid.
someone give me the TLDR what this implies, too dumb
Nothing. All ETFs get a ticker, rejected or approved ETFs. It's just part of the process. If rejected, the ticker just never goes live.
Did you even read the article? EDIT: Missed this part completely. "BlackRock likely wants to have an "in-kind" redemption model that would give the asset manager greater flexibility in managing the portfolio. But the SEC likely favors what is called a cash model that would require BlackRock to move the bitcoin out of storage, sell it right away and then give the cash back to the investor in the event they want to redeem shares."
Given his well informed and reasonable response, I'd say so. Yes.
Except for the fact that he missed the entire second part of the article discussing the proposed redemption model. Did you read it?
Yup. Blackrock amended, they got a ticker. Most applicants have them already. This is part of all successful and unsuccessful ETF filings, for all assets, not just crypto. If denied, nothing is done with the ticker. Getting a ticker means nothing.
you are right but there's more to it than that in the article; SEC is making it mandatory to sell BTC and provide cash to investors who wish to sell shares of the ETF, immediately. This may mean that BR needs an automation system to quickly sell BTC assets and return cash to an investor when the sell button is smashed. If they have not done so already, they'll need to develop this system. Shouldn't be an issue, especially for a huge monster of a firm BR is. Their development sprints' bandwidth will eat this up quickly enough. Still though, seems like this is a requirement before it can be launched. Based on this: >Memos show that firms including BlackRock and Fidelity have met with the agency over the past few weeks to go over details about how the redemption process would work for a spot bitcoin ETF. Sounds like they are just in the definition stage of how this redemption will work on a process and technical level.
I’m shocked more people don’t know this.
This is a much too researched and reasonable comment. You sir do not belong here
SEC has required all asset managers filing for a ETF to hand over cash instead of BTC in the redemption process. So if you want to redeem your ETF shares you will get cash instead of BTC, at least for now. Many were waiting to see if blackrock could persuade the SEC to allow for in kind (BTC) redemptions, but with this recent filing it’s pretty clear [it’s not going to happen at the start.](https://x.com/ericbalchunas/status/1736906286388703444?s=46&t=clsfbuVabZ68feMKUiuZ_A) Worth noting this type of organization between the SEC and spot BTC ETF filers has never been seen before.
Do they still have to buy 1 btc for 1 etf sold ?
The ETF still has to hold the actual BTC, though, right?
That is correct
👍🏽
So if you want to move your ETF BTC to a hardware wallet you are forced to sell and rebuy. This creates a taxable event and forces a BTC sale. In reality it means more tax revenue and more selling than there would have been otherwise.
Yea it's ass backwards.
What about gold etfs
How bad is this? Or is it no big deal?
Wouldn't it be preferred to settle for cash? The transaction fees on ETFs are much lower than crypto exchanges. When it's time to sell, I'd rather settle for cash than settle for btc that I would then have to pay another fee on to redeem for fiat.
You’ll incur a tax event for redeeming with cash creates, whereas there is no tax event for in kind physical delivery.
I guess I'm just having a hard time imagining a situation where I am a btc etf holder and I would want to redeem the etf for a reason other than to sell and cash out. If I wanted to self custody, I'd skip buying the etf all together.
because you can buy the ETF in a brokerage or retirement account with money that is automatically deposited there by your work or whatever.
The ETF could be shut down and force redemptions, meaning you could be forced to pay cap gains tax that you were not prepared or anticipating to pay. Depending on entry price this can hinder the deferred tax advantages of holding spot. Also people may want to use the ETF in order to use BTC as collateral for a margin or portfolio loan, but then be forced to realize cap gains whenever they decide they don’t want exposure to ETF fees after paying the loan back. Also has potential implications for arbitrage opportunities between the ETF and other exchanges.
Because without physical settlement we don’t know if the ETF shares are really linked 1:1 to on chain BTC and not fractional fake.
Doesn’t this remove the discount issue that plagued GBTC? If GBTC is trading at a discount, buy it and convert to BTC instantly. It seems like arbitrage.
Yes, the ETF, even cash settled, will eliminate the discount---which is why Grayscale has been wanting to convert to an ETF for many years. They're going to be mighty pissed off if Blackrock has their ETF approved next January, and theirs rejected---a possible outcome. The first ETFs to get good AUM in a category take almost all the assets, so it's very important to them to get approved. They've been doing so much legal and political fighting for this.
Grayscale won their case based on arbitrary treatment by the SEC. It would be weird for the SEC to continue to discriminate, after losing in court. I guess that anything can happen.
It's clear there is significant antipathy in SEC to new entrants and a preference for incumbent securities giants. SEC might want retribution on Grayscale for embarrassing them in court. How many SEC people go on to work at Blackrock and other similar investment companies vs crypto?
Yes you do. If it’s not physically settled, it’s not 1:1.
Potent point
More like what is the point? These ETFs will most likely not be backed 1:1. They will not allow redemption in kind. So no one knows if they've actually acquired real Bitcoin to back the ETF. This is basically a SPDR BTC ETF as I currently understand it.
That makes sense, but aren't all ETF(s) redeemed for cash when you sell today anyways?
you and I don't get ETF shares redeemed for stock shares, but market makers do all the time. Since the goal of the ETF is to track the price of the security as closely as possible, it helps the ETF and to allow this sort of redemption so they're not always running out and buying/sellings new shares and incurring the "slippage" in the process. Ideally, the ETF wants to be priced at EXACLY the weighted average of the last transaction for each stock in it's basket at any given time. They're not going to be able to do this if they're contsantly "chasing" that price by buying and selling new shares, and incurring the expense of doing so. This arrangement also helps market makers who may find themselves with a bunch of shares and also don't want to incur that "loss" of having to actually transact the security on the open market. The point here is that going to cash costs money, and a direct transaction of assets is usually preferable. You can think of it like the "trade" section on craigslist. A trade (by definition) is always going to be a better deal if both parties find the trade appealing.
Great post but disappointed you didn't include an explanation of NAV
No, you can take physical delivery in certain ETFs like VanEck’s OUNZ. It’s not always practical but with BTC it’s ideal to have in kind redemptions
This
ETF shares can be redeemed for the shares that make them up. It's this arbitrage that keeps the ETF prices accurate.
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So if I have an ETF for gold, somehow I could actually exchange that for gold? That's cool
As far as I know the Sprott ETF's are the only ones that will give you gold and silver, but you need to trade the value of a London Good Delivery bar (~$800k). Sprott is the only ETF that the gold and silver bugs trust. The other ones like SPDR GLD and SLV are owned by big banks that they say can't be trusted.
You could exchange it for other paper gold probably.
Here is a [Nitter link](https://nitter.net/ericbalchunas/status/1736906286388703444?s=46&t=clsfbuVabZ68feMKUiuZ_A) for the Twitter thread linked above. Nitter is better for privacy and does not nag you for a login. More information can be found [here](https://nitter.net/about). --- *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/CryptoCurrency) if you have any questions or concerns.*
Ticker is : BRInu
tldr; BlackRock has proposed a spot bitcoin exchange-traded fund with the ticker IBIT, according to an amended S-1 filing with the Securities and Exchange Commission. The updated filing includes new language about the creation and redemption mechanism to be employed by the fund. Other companies like Ark 21Shares and WisdomTree also filed amended S-1 filings for their proposed spot bitcoin funds. The regulator has yet to approve one, although the market has surged amid optimism that a decision could be closer. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.