ETF pressure \ stacker news ~bitcoin

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1069 sats \ 22 comments \ @crrdlx 28 Sep 2023 bitcoin

The whole ETF thing has my gut feeling telling me, "This will be big." My brain tells me, "Calm down, people always overreact to events, and then markets correct or even overcorrects."

Yet, my gut just won't keep telling me, "This will be big." My thoughts...

I feel bitcoin spot ETFs are inevitable.
The money behind the Blackrocks of the world is ridiculous.
The global quantity of money held, especially by Boomers who use traditional investment avenues and who may wish to put 1% or 2% into bitcoin, is huge.

If even a small percentage of this money goes orange, that's a lot of buy pressure.

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675 sats \ 9 replies \ @siggy47 28 Sep 2023

I just checked out the headlines from 2017 when I first got interested in bitcoin. The excitement then was the coming bitcoin options market. It got me energized. I remember the El Salvador announcement. Everyone anticipated that bitcoin's price would skyrocket. I was excited. Somehow the rocket ship never ignited. I wouldn't get my hopes up about the dollar value of bitcoin when and if a spot ETF gets approved. Just concentrate on stacking and doing your part to increase adoption. We'll get there when we get there. That's my two sats, anyway.

259 sats \ 3 replies \ @TwoLargePizzas 28 Sep 2023

Not trying to spread hopium but just to put the numbers into context.. at it's peak the entire GDP of El Salvador was about $30 billion. BlackRock has assets under management of $9.42 trillion (with a T). In other words, the entire GDP of El Salvador is 0.3% of BlackRock's assets under management.

206 sats \ 1 reply \ @crrdlx OP 28 Sep 2023

Yes. This is exactly what I'm saying. The numbers involved with an ETF are very, very different. Who knows how much of these numbers will be interested in a bitcoin ETF. But, the ease of anyone with an etrade account or any account to "get in" to bitcoin is formidable in my view. And those folks would be miniscule compared to institional money. Yes, it's not truly owning BTC because it's custodial holding, but the custodian must buy the BTC. Buy pressure.

1 sat \ 0 replies \ @siggy47 28 Sep 2023

Well, remember they can hedge (where hedge funds get their name) by selling paper btc with their enormous fiat bags, with the ostensible rationale of limiting their market exposure in any one direction. If you haven't had the chance yet, read this great article by Allen Farrington :https://allenfarrington.medium.com/trust-me-bro-fb5a25964634

21 sats \ 0 replies \ @siggy47 28 Sep 2023

I wasn't trying to compare the financial clout of ES versus BlackRock. The reason I mentioned it was to compare the emotional impact of the news items. I'm really thinking out loud, and I hope my negativity is unfounded. That being said, BlackRock's power scares me. They could play with BTC price- driving it up and down. Down to scare holders into selling, or drive it up to get lambo boys to cash out. They can suppress the price to aid their fiat investments or to curry government favors. They can completely control the hash rate. Again, I hope everything I say is wrong. In any event,we should all buy every sat we can afford right now to give them less to play with.

206 sats \ 0 replies \ @kepford 28 Sep 2023

Yep, this is the way.

206 sats \ 3 replies \ @crrdlx OP 28 Sep 2023

That's a really fair take, pretty much why I wrote about what my brain keeps telling me. The numbers involved with an ETF I think are just different. Admittedly, I don't know any off the top of my head but when I hear the numbers thrown around, they're huge, huge as in GDP of the USA, then China, then the Blackrocks (as far as money under management).

21 sats \ 2 replies \ @siggy47 28 Sep 2023

You make good points. I know a huge post spot ETF rally would probably bring a lot of people into the space. But most of them will head for the exits come next bear market. Couple that with Larry Fink and BlackRock, who I don't trust and whose government connections run deep, and I have trouble seeing this as a positive. Maybe I'm overly negative.

206 sats \ 1 reply \ @crrdlx OP 28 Sep 2023

I'd say you're spot on with how people will run when the bear comes. No doubt the "new money" from newbies will have cold feet when times get shaky. How many times have we seen this?! :)

Regarding Fink, I don't know too much about him, just that there's a large quantity of money involved.

I guess I'm thinking more long term. I see an initial boom, then a slow and maybe a pull back, then a bear and run. Then a pause. But as things grow more common and normal, really don't see a trend away from bitcoin over the years, but a trendline that moves toward more investment, even if slowly.

1 sat \ 0 replies \ @siggy47 28 Sep 2023

I would agree with everything you said, but my one lingering fear is a coordinated government push to suppress the price long term like with gold and the big NY banks. It would be tougher to pull off with bitcoin, but they may try. Powerful interests will do everything possible to keep the fiat ponzi going.

230 sats \ 0 replies \ @kepford 28 Sep 2023

This is a very rational take. I don't think its inevitable but it is highly likely.

52 sats \ 5 replies \ @fedelang 28 Sep 2023

I don't really get all ETF hype among some bitcoiners. Spot ETF is not bitcoin, is paper BS. Manipulating its price will far easier and even more catastrophic than what CZ and all this BS casinos with BS stableshitcoins are doing right now. I fail to see how this will help bitcoin get more adoption.

https://imgprxy.stacker.news/qV1Oljv-2ufHl9qGDT1JXE4jkA2WbH3iENPz12y34Vg/rs:fit:600:500:0/g:no/aHR0cHM6Ly9pLmltZ2ZsaXAuY29tLzgwc2hsNy5qcGc

0 sats \ 4 replies \ @crrdlx OP 29 Sep 2023

As I understand, mere mortal pleb that I am!, the way it would work would be this...

ETF fund buys BTC
fund sells shares of the ETF to investor
fund holds BTC as custodian for investor
investor redeems when desired (sells shares of ETF)

So, yes, you're right, investor is not holding BTC. And yes that goes against the "not your keys..." ethos. However, the fund DID buy the BTC and is holding it via their keys. And yes, also goes against the ethos of "don't trust, verify" because investor must trust the ETF and the financial system as a whole. The ETF is not for true bitcoiners. It's for big money to easily get in or out, for Junior with a Robinhood account, or grandpa with an etrade account.

But, no, no new BTC is minted on paper with an ETF. (Derivatives are a whole other matter that I neither understand nor want anything to with. That may be what youre referring to.) An ETF is just the current limited bitcoin supply being subjected to the buy pressure of that ETF.

11 sats \ 3 replies \ @ek 29 Sep 2023

But, no, no new BTC is minted on paper with an ETF

It's possible though with manipulation.

But I believe spot ETFs will just be the start for many companies to learn about bitcoin.

And then, at some point, they want to make sure they really own bitcoins, not just bitcoin IOUs. However, ETFs aren't even IOUs, they are worse.

One big advantage of bitcoin compared to gold is that it's way easier to own and protect. So imo it won't be that easy to manipulate the price since the road to ownership is basically paved.

11 sats \ 2 replies \ @SpaceHodler 29 Sep 2023

It's possible though with manipulation

How is it possible? They'll be audited regularly to make sure they own as much bitcoin as they have IOU liabilities. Are you saying the auditing itself will be rigged because of corrupt auditors?

0 sats \ 1 reply \ @ek 29 Sep 2023

They'll be audited regularly to make sure they own as much bitcoin as they have IOU liabilities.

That's a good point and also a reason to believe it will be very hard to impossible to manipulate.

Are you saying the auditing itself will be rigged because of corrupt auditors?

For example. I just don't believe that audits or regulations mean that no manipulation or corruption can happen. Afaik, FTX was one of the most regulated exchanges - at least they bragged about it - but see how that turned out.

TradFi with BlackRock is a different beast but if we argue from first principles, it's still possible.

Don't trust, verify. And I am not sure they will provide proof of reserves to the masses.

That reminds me that I should look more into how proof of reserves work. Thanks! Blog post idea.

10 sats \ 0 replies \ @SpaceHodler 29 Sep 2023

I like to think the level of auditing / regulation will be much higher with the ETF. That's why it's so hard to get approved, it requires much more scrutiny. Or maybe that's just what the SEC is using as an excuse to drag their feet.

One of the problems with exchanges using proof of reserves is it doesn't prove their liabilities. In an ETF that side of the equation should be taken care of.

42 sats \ 1 reply \ @TheBTCManual 29 Sep 2023

I mean they're already available in other countries, so I don't see why it won't come to the US eventually, it really just depends on how they can spin it on the public that Bitcoin is now de-risked and it's okay now, after years of shitting on it

ETFs might be great for unlocking capital to flow into Bitcoin, but it also means less people self custody and could be exposed to possible failure of a custody provider, which would be catastrophic and make an FTX style fail look like childs play

10 sats \ 0 replies \ @Enemy_of_the_state 15 Feb

Not really catastrophic though. It’s the only way people will learn. Pain. The rug pulls will continue until self custody is the norm for people with wealth.

95% of the perceived wealth of the world is just air…doesn’t exist. That will have to vaporize one way or another. A combination of defaults, theft, and money printing that will be unprecedented.

21 sats \ 0 replies \ @BlokchainB 29 Sep 2023

Been watching this new YouTuber called BritishHodl and he explains the ETF from a super bull perspective. But the one concept that I agree that he hammers is the idea of custody. The normal person doesn’t want to custody and worry about theft or loss. So if a “reputable” management firm like blackrock comes this build a ton of confidence in the market. Plus all the government regulations make it easy for people to borrow against it. I think it’s ridiculous that unchained charges 12% APR on bitcoin collateralized loans while blackrock with this etf can instantly offer Margin on the ETF