People who buy spot BTC ETFs - tribemates or not? \ stacker news ~alter

pull down to refresh

People who buy spot BTC ETFs - tribemates or not?

2863 sats \ 35 comments \ @cryotosensei 29 May alter_native

A few months ago, I asked Stackers if Bitcoin is their one and only. Seems that there are two camps. One group typically possesses Bitcoin and retirement funds, whereas the other group goes all in on Bitcoin.

Around the same time, 11 spot BTC ETFs were launched. According to a study from Apollo, they’ve taken in approximately net 220k BTC ($14B). As of April 2023, the largest inflows have gone to Blackrock (IBIT) and Fidelity (FBTC), with 274k BTC and 155k BTC respectively. Blackrock now owns more Bitcoin than MicroStrategy. Who would have thought it possible just a year ago?

So, suffice it to say that the demand for spot BTC ETFs is robust and many people have taken the opportunity to buy one or more of these ETFs.

Would you consider individuals who just invest in the spot BTC ETFs as members of your tribe? Or you would think that they have wasted their opportunity to own some actual Bitcoin? How about people who buy both Bitcoin and spot ETFs?

view all related items

373 sats \ 2 replies \ @0fje0 29 May

members of your tribe

Thinking about this in terms of tribalism isn't super helpful. Individuals' circumstances vary wildly.

As your last question actually hints to anyway:

How about people who buy both Bitcoin and spot ETFs?

So are they in yet another "tribe"?

10 sats \ 0 replies \ @Bell_curve 29 May

Fair and balanced

0 sats \ 0 replies \ @cryotosensei OP 29 May

Lol. Thanks for pointing out the contrarian view

182 sats \ 7 replies \ @nerd2ninja 29 May

I think the "related posts" say it all

Bitcoin vs. Bitcoin Spot ETFs: The Great Illusion Has Started. Beware.

ETF holders are not node runners and therefore are unable to participate in social construct debate on what Bitcoin is. To them, Bitcoin is what their ETF custodian says that it is. So in a blocksize wars scenario, those people are by default on the side of the ETF custodian (if they don't immediately sell) and the ETF custodian is by default on the side of whatever government regulators decide is Bitcoin.

Unlike Bitcoiners, they are not censorship resistant, they are not decentralized, they don't even have the ability to prove they own what they say they own, they can't do cheap cross border transactions, they can't use the lightning network, they can't even withdraw Bitcoin from their custodian, and all in all, they don't own Bitcoin.

What about people who have some Bitcoin and some ETFs? Well, I suppose some of their net worth is censorship resistant, able to participate in social construct debate/blocksize wars, can do cross border payments and use the lightning network whereas another part of their net worth can not.

301 sats \ 1 reply \ @cryotosensei OP 30 May

Thanks for sharing the link. Devoured it.

I gotta confess that I’m not very interested in the tech, but nonetheless enjoyed reading your argument on the agency and choice having Bitcoin gifts us in charting its development

0 sats \ 0 replies \ @nerd2ninja 30 May

Just trying to avoid what happened to gold is enough of a goal isn't it? So many seem to desire jumping straight into those problems instead of avoiding them.

10 sats \ 4 replies \ @gmd 29 May

Yeah... most people don't care much about any of that stuff.

They just want their savings to increase and aren't cult members like us.

100 sats \ 3 replies \ @nerd2ninja 29 May

Will their savings increase though? Because you need to be able to verify your Bitcoin to sync up with the price of Bitcoin. If ETF holders had Bitcoin crash right now I bet you they'd be more than a little upset.

And why call us cult members? This isn't a cult. Its a money. Not being able to deal with people in the same money is kinda a big problem to overlook.

120 sats \ 1 reply \ @Signal312 29 May

There was a time when I couldn't stop talking about bitcoin. I don't go on and on about it anymore, but I've definitely been called a "cult member" by family.

It's just...I feel like I see the light, and could "rescue" people, if they would just listen to me But that never appears to work.

120 sats \ 0 replies \ @cryotosensei OP 30 May

As a teacher, I can only share that sometimes the seeds you sow don’t mature until much later, years down the road even.

You are doing what you can, and it is enough.

10 sats \ 0 replies \ @gmd 29 May

ETFs are very liquid. They can trade back and forth into Nvidia, treasuries or whatever degen position they want. 401ks work well enough (so far) for plenty of people who have retired successfully, despite market fluctuations.

Most people have busy lives and don't want to have to think about self custody.

87 sats \ 2 replies \ @Undisciplined 29 May

There are lots of people who are able to buy the ETF's in their retirement accounts, but wouldn't be able to buy actual bitcoin that way. I certainly have no issues with people doing that.

Beyond that, I would hope the ETF's can serve as an on-ramp that gets people more interested in Bitcoin. Anyone who stops at the ETF, though, is not a tribemate of mine.

21 sats \ 1 reply \ @cryotosensei OP 30 May

Indeed, these ETFs could serve as a scaffolding tool for those who want to test the waters first.

Fortunately or unfortunately, Singapore doesn’t allow us to invest in these spot BTC ETFs. For the world out there to judge if we are a nanny state haha

0 sats \ 0 replies \ @Undisciplined 30 May

It’s really amazing, considering Singapore is by far the freest economy in the world.

So much more is possible.

65 sats \ 1 reply \ @BTCFC 29 May

I was one of those newbs that initially got exposed into Bitcoin via Robinhood. Which basically is like owning a Bitcoin ETF since you cannot withdraw your coins. However, as soon as I saw my fiat net worth increasing quite dramatically, I had to learn what on Earth was happening and look into what this Bitcoin thing actually is. This led me to quickly understand the important concept of 'not your keys, not your bitcoin', and so I sold all that fake btc and bought the real thing. So, as someone who started with buying paper BTC but progressed into hodling the actual asset, I choose to be optimistic for those newly coming into BTC through ETFs, because at least some will without a doubt go through a similar experience to mine, and learn the true significance of this tool beyond it's fiat price.

0 sats \ 0 replies \ @cryotosensei OP 30 May

Good that you made a profit haha

54 sats \ 1 reply \ @memeverse 29 May

Those who are in the BTC world don't buy ETFs! Of course there are those who want to diversify their investments, but I can't understand why they would spend money on ETFs instead of buying and actually owning a real asset.

Maybe I'm wrong, a bitcoiner when he has money to spend buys more satoshi. At least that's how I do it.

People don't inform themselves, they don't understand the potential of BTC, they think it's just an asset for speculation or a bubble that has to burst sooner or later. They certainly don't care what's behind BTC, if it can free us from any intermediary and improve our lives.

If they are unable to seize this opportunity then they don't deserve to be part of this world. We don't belong to the same tribe.

20 sats \ 0 replies \ @cryotosensei OP 30 May

I agree that having the right mindset is integral to being a Bitcoiner.

52 sats \ 1 reply \ @grayruby 29 May

I consider them bitcoin holders but not necessarily bitcoiners. You lose many of key features of Bitcoin when you hold it in an etf wrapper. I am not against ETFs they were inevitable and just another layer on the Bitcoin stack. Until we can get getter options for holding Bitcoin in a retirement account they are probably a decent representation of that. They add liquidity to the market and expose it to new investors.

However, I do hope that some of the etf holders will now study and learn why they should convert most of their etf holdings to bitcoin and hold in self custody.

50 sats \ 0 replies \ @cryotosensei OP 30 May

I love your simple and exquisite distinction: bitcoin holders vs bitcoiners. Somehow I feel this distinction is more inclusive than tribes

105 sats \ 4 replies \ @Coinsreporter 29 May

You're always PPP.

Thanks for asking.

Let me view it clearly from the perspective of India. Here, if I buy 1 BTC from an exchange and it turns out profitable in terms of fiat, I need to give away 32.1% of profits as taxes.

But when I buy spot ETFs, I can buy them (upto a limit of $250000) and will be taxed flat 25% on dividends.

Also, if I choose to hold any investment in ETFs for a period of 24 months, it becomes subject to capital gains and will be taxed flat 20%.

So, taxwise and for compliances, people from India are getting more inclined towards ETFs. It's a harsh reality for me.

I'm not buying any ETF thing, not today, not in my life because I don't like any type of middleman for letting me hold onto something that is mine.

TBH, I already knew that ETFs are becoming popular among Indian investors, but it's only after your post that I looked for rules and regulations regarding investing capital in US Stock markets.

So, Thank you so much. A frivolous gift, enjoy a thousand sats as my gratitude.

11 sats \ 3 replies \ @cryotosensei OP 30 May

Thanks for your V4V for helping me understand the tax situation in India better!

You made me realise that I should count my blessings. We still don’t need to pay capital gains taxes in my country (yet).

21 sats \ 2 replies \ @Coinsreporter 30 May

Yes, but there's a limit in China of 7000 USD in a year. Am I right or missing something?

11 sats \ 1 reply \ @cryotosensei OP 30 May

Well i'm from Singapore, not from China. Singaporean Chinese

0 sats \ 0 replies \ @Coinsreporter 30 May

Singaporean Chinese Ahh! My bad! Can you then please reflect how much you can invest in US ETFs as a singaporean?

105 sats \ 2 replies \ @_vnprc 29 May

They are buying price exposure. It's a start. Some fraction of those folks will get curious and buy real bitcoin and withdraw to self custody. Our job is not to look down on these folks, it is to educate them. When you notice one of these people asking the right questions you should feed their curiosity. Guide them to the rabbit hole.

The ETFs are a natural vehicle for orange pilling people. You just need to apply the right strategy. It's safe to assume ETF purchasers are primarily interested in price appreciation. Use this knowledge. The SEC prohibited in-kind redemption for the bitcoin ETFs. So ETF owners are forced to convert into dollars when they sell. This is a taxable event, which is not a coincidence. The Wall Street alliance made sure to change the rules so the gov can get their pound of flesh. Use this fact to drive home the importance of self-custody.

Once they understand the tax benefits of self custody you can start to explain the macro game theory. Speculative attacks on the dollar will continue to ramp up and the government will get more desperate as the dollar continues to depeg from everything and inflate to the stratosphere. The feds will start closing onramps and forcing more and more people into captured vehicles like the ETFs. At first they will justify it with tax collection. Eventually the ETFs will get rugged. Feds will seize the underlying bitcoin and hand out receipts that can be devalued at will. Exactly like they did 100 years ago with EO 6102.

Our job is to blackpill as many ETF owners as possible. Convince them to buy real bitcoin while they still can. Otherwise they'll get caught with their pants down when the tide goes out. How embarrassing!

100 sats \ 1 reply \ @cryotosensei OP 30 May

Thank you for projecting into the future and penning such a well-thought-out comment that covers the various effects. Much food for thought

0 sats \ 0 replies \ @_vnprc 30 May freebie

Thanks for asking a great question!

After thinking about it for a day or two I think it is exceedingly unlikely the government will overtly seize the bitcoin backing the ETFs. At least not right away. First they will deputize Blackrock and whoever else into issuing paper bitcoin instruments. Due to the absolute size of these wallets this will have a serious negative impact on the spot price of real bitcoin. At least for a while. Just like fiat currency manipulation, this will drive a black market price for bitcoin that exceeds the official sanctioned price. This scenario could continue for an extended period. The long game is the same, however. Eventually the USA will need a bitcoin treasury and these honeypots are simply too big to ignore. We all need to prepare accordingly, especially the ETF share owners.

21 sats \ 2 replies \ @Satosora 30 May

I dont think owning the etf is wrong. Especially for the people who only have this option. At least they are able to put money where they want.

20 sats \ 1 reply \ @cryotosensei OP 30 May

Thanks for weighing in.

N congrats on how your car post has exploded haha

0 sats \ 0 replies \ @Satosora 30 May

Oh man, I didnt expect it to take off so much. This is how you must feel like when you post! I feel responsible for answering each comment. Actually, I lost sats on this whole process lol I find that a little funny.

21 sats \ 1 reply \ @TheBTCManual 29 May

I look at them as useful liquidity for the bitcoin network, they're pulling supply the market to enrich the broader network allowing the rest of us to do more high value transactions and generate value, they also act as an early warning system, they would be the first to be attacked/rugged

0 sats \ 0 replies \ @cryotosensei OP 30 May

Indeed, we need them as exit liquidity

41 sats \ 1 reply \ @orthwyrm 29 May

deleted by author

50 sats \ 0 replies \ @cryotosensei OP 29 May

Thanks for outlining your situation.

I also think some Americans buy Bitcoin with Swan to save on taxes. As taken from their newsletter, There are no tax consequences for either (1) rolling over an old 401(k) into an IRA or (2) diversifying your existing retirement portfolio by buying Bitcoin inside a Swan IRA.