121 sats \ 12 replies \ @kr OP 5 Mar \ parent \ on: Will MSTR Outperform or Underperform Against Bitcoin? bitcoin
do you also think all ETFs will be worthless?
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0 sats \ 11 replies \ @gd 5 Mar
The value of the currency that the ETFs are denominated in (and pay out in) will be worthless
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115 sats \ 10 replies \ @kr OP 5 Mar
let’s assume the US dollar goes to zero and is no longer a currency one day.
do you believe the ETF holders will see all their Bitcoin ETF shares disappear?
i don’t.
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0 sats \ 9 replies \ @gd 5 Mar
Not at all, but they won't be able to redeem anything of value with the ETF shares.
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10 sats \ 8 replies \ @kr OP 5 Mar
why not?
if you can’t “redeem anything of value”, you’re essentially saying the ETFs will go to zero.
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0 sats \ 7 replies \ @gd 5 Mar
Because they're a claim on dollars, not Bitcoin— you said "let's assume the US dollar goes to zero"
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21 sats \ 6 replies \ @kr OP 5 Mar
Because they're a claim on dollars
Are they really though? I think ETF holders will be compensated in the event of a US dollar collapse.
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0 sats \ 5 replies \ @gd 5 Mar
They’ll be compensated in large sums of dollars. ETFs are contracts which have iron clad terms.
There would be no obligation to suddenly compensate people with something infinitely more valuable than they are contractually obliged to. Especially when the advice has always been “your investment can go to zero, don’t invest anything you’re not willing to lose”.
The recommended reading link I posted in my original comment is a concrete example of that from history.
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0 sats \ 4 replies \ @kr OP 5 Mar
i think on paper you are right, but i don’t think any ETF issuer would get away with destroying the wealth of millions of people who thought they were holding Bitcoin.
yes, i know they should have read the fine print and that they weren’t really holding Bitcoin, but good luck explaining that to people on the short end of this.
i think social pressure would force ETF issuers to honor the Bitcoin value of their shares in the case of a US dollar collapse.
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