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21 sats \ 2 replies \ @arrivederci 3 Feb freebie \ on: Bitcoin ETFs and crazy number logic bitcoin
Unsurprisingly, people are reacting to incentives and selling GBTC to get out of those high fees. Ideally, they would reinvest back into one of the other ETFs with the lower fees.
No, ideally they would have learnt more about Bitcoin since buying into (and for a long time being locked into) the Grayscale Bitcoin Trust and, since it converted to an ETF, are finally taking the opportunity to cash out at a 1-1 value and are then turning around and not buying into another ETF but instead doing the best thing and taking that cash to buy Bitcoin directly and then self-custodying it.
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1 sat \ 1 reply \ @crrdlx OP 3 Feb
Well, if Alice buys actual BTC or if she gives money to the ETF to buy BTC, either way BTC is bought. I understand what you're saying about self-custody, but wouldn't presume to say what is best for Alice, self-custodying BTC or buying an ETF. Her call.
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0 sats \ 0 replies \ @arrivederci 3 Feb
Well, if Alice buys actual BTC or if she gives money to the ETF to buy BTC, either way BTC is bought.
Yes, but only the flows out of the Grayscale ETF into another ETF show up (in the cumulative) in an ETF holdings analysis. The flows out of Grayscale into privately held BTC are missed by such an analysis (which is the analysis you have made in this post).
You gave 3 options on what Grayscale holders might do - 1) move from Grayscale to an ETF with a lower fee, 2) cash out and 'pay off debts or buy a truck', and 3) stay in Grayscale. Option 2 you described as "the sell pressure that will hold the BTC price down". What I am pointing out is that cashing out and then rebuying BTC directly was not something you had accounted for (in your initial post; you've acknowledged it in yr reply).
Sorry if I'm belabouring the point somewhat but I think it's important to realise that just because ppl exit a BTC ETF (either Grayscale or one of the newer funds at a later time), that doesn't necessarily mean they are exiting Bitcoin and creating sell pressure. They may be doing the more enlightened thing (in my and many others' view) of cashing out to buy and hold directly. And I think this will happen over time - shifts from ETF exposure to direct exposure.
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