IF the ETF approved, will you make Bitcoin a NEW position?

[james22]

For those who don't already hold Bitcoin, will the approval of an EFT elevate it to an "asset class" in your mind?

 

Will you make it a position?

 

If so, in what size? Less than or greater than 5%?

[Sweet]

Unlikely.  My opinion on its uses and its value hasn’t changed.  If I had to play book to understand it’s price then I would speculate on it maybe.  I don’t consider it an investment though.

 

Edited January 10 by Sweet

[Spooky]

No. It doesn't change the underlying nature of the security. It is a pure speculative instrument. Fine for small amounts for gambling but nothing more.

[TwoCitiesCapital]

I think you'll find answers here a little biased given that's it's traditionally a value investor forum and often times that favors the status quo and eschews new/exciting/sexy type investments. 

 

With companies like Blackrock and Fidelity advising that it's a new asset class and recommending allocations of 1-5% to it, I think you'll see plenty of passive flows over time as firms update their asset allocation models/guidance and delegated accounts get allocated to the ETFs. 

 

Not sure if the responses you see here will be what is matched in reality. 

[ValueArb]

Won't it also make it much easier to short Bitcoin;)?

[spartansaver]

I can see the pros and cons of bitcoin. Cons are it could be the next Tulipomania. Pros are its supply is fixed, decentralized, governments destroy their currencies, and if this continues to survive it could be a currency that is used in everyday transactions worldwide. I don't really lean either way, but I do think that even if it is a giant ponzi scheme its somewhat interesting that a lot of people are about to get invited to the ponzi party. Supply is essentially fixed, and demand might go up a bunch as it becomes much less of a hassle to throw a few sheckles at BTC. I don't directly own any but am participating through a position in FRMO. 

[alxcii]

25 minutes ago, spartansaver said:

I can see the pros and cons of bitcoin. Cons are it could be the next Tulipomania. Pros are its supply is fixed, decentralized, governments destroy their currencies, and if this continues to survive it could be a currency that is used in everyday transactions worldwide. I don't really lean either way, but I do think that even if it is a giant ponzi scheme its somewhat interesting that a lot of people are about to get invited to the ponzi party. Supply is essentially fixed, and demand might go up a bunch as it becomes much less of a hassle to throw a few sheckles at BTC. I don't directly own any but am participating through a position in FRMO. 

 

Gotta pull out Naval here:

 

 

[TwoCitiesCapital]

Just now, alxcii said:

 

Gotta pull out Naval here:

 

 

 

Also, I don't think tulip mania lasted for ~15 years

[TwoCitiesCapital]

33 minutes ago, ValueArb said:

Won't it also make it much easier to short Bitcoin;)?

 

It will. At least optically so.

 

I think many will find shorting one of the most in-demand assets that also happens to be the most scarce isn't as "easy" as it might initially seem. 

Edited January 10 by TwoCitiesCapital

[spartansaver]

10 minutes ago, alxcii said:

 

Gotta pull out Naval here:

 

 

Gotta pull out Twain here "History doesn't repeat itself, but it often rhymes”. I get it, it's got a lot of stuff going for it, presenting both sides of the coin. 

 

Also for you quote snobs, its not certain Twain actually said this. 

[james22]

2 hours ago, TwoCitiesCapital said:

I think you'll find answers here a little biased given that's it's traditionally a value investor forum and often times that favors the status quo and eschews new/exciting/sexy type investments. 

 

With companies like Blackrock and Fidelity advising that it's a new asset class and recommending allocations of 1-5% to it, I think you'll see plenty of passive flows over time as firms update their asset allocation models/guidance and delegated accounts get allocated to the ETFs. 

 

Not sure if the responses you see here will be what is matched in reality. 

 

It might give an idea of the floor?

 

I'm unconvinced myself if it's an asset class, but I'll probably commit a couple percent to it anyway.

[dwy000]

How do you put a calculated or intrinsic value on it?   If you have no basis for why it will go up or down or whether it's overpriced or undervalued, how is it anything other than gambling?

[james22]

27 minutes ago, dwy000 said:

How do you put a calculated or intrinsic value on it?   If you have no basis for why it will go up or down or whether it's overpriced or undervalued, how is it anything other than gambling?

 

Like any other commodity: supply/demand?

[TwoCitiesCapital]

52 minutes ago, dwy000 said:

How do you put a calculated or intrinsic value on it?   If you have no basis for why it will go up or down or whether it's overpriced or undervalued, how is it anything other than gambling?

 

Probably a better conversation for the cryptocurrency thread where it's been debated ad nauseum. 

 

TL;DR - exactly how we value/trade all other commodities and/or the companies that produce them. 

Edited January 10 by TwoCitiesCapital

[rkbabang]

I own it directly so I won't be buying an ETF in my taxable accounts.

And I own MSTR in my 401K, so I won't be buying an ETF in my non-taxable accounts.

 

I do think the ETF will make it easier for the average investor and/or institutional investors to think about buying it.  They don't have to learn anything new, just make a trade the way they usually do to gain exposure.

 

[ValueArb]

1 hour ago, james22 said:

 

Like any other commodity: supply/demand?

 

If you want to put your time into estimating the production capacity for a specific commodity at various price levels, and the demand curve for it at various price levels, once in a blue moon you can get pretty confident about where long term prices have to end up at. That's basically what Buffett did with Silver in 1997. But value investors almost always avoid this type of estimation because its fraught with errors and dynamic market changes (new discoveries, new replacements like Shale, new regulations influencing both supply and demand such as CO2 limits). That's why when they speak of IV, its almost always future cash flows.

 

I don't know how that method can be applied to crypto-currencies at all. Even with (relatively) fixed supply demand curves can only be guessed at. 

[mattee2264]

1st level thinking is there is a massive and self-serving incentive now for financial institutions to promote the idea that every portfolio needs a 5-10% allocation to bitcoin and that will create a huge amount of demand for the ETF. Not to mention that individual investors can now speculate in bitcoin in their retirement accounts. And if the ETF can get a bit of momentum out of the gates it will be very easy to draw in more and more money. And precisely because it is impossible to value then there is nothing fundamental such as earnings etc to tether its valuation. So it is difficult not to imagine this ETF doing very well. 

 

 

[james22]

1 hour ago, ValueArb said:

Even with (relatively) fixed supply demand curves can only be guessed at. 

 

Sure. Doesn't mean it doesn't apply.

 

What do you believe will happen to gold now that Bitcoin might compete with it as a store of value?

 

Can you do better than guess?

[changegonnacome]

No I wont be buying - but I will be shorting Coinbase......in an ETF world where the ETF can be traded commision free via robinhood or Schaeb or whatever brokerage you want.....and then the ETF itself carries a tiny 0.2% annual mgmt charge....your charge for a $51 dollar purchase of BTC at the end of the year is measly and reasonable 10.2 cents on that fifty one dollar purchase and you can sell it too. Same 10.2 c cent cost for a roundtrip.

 

Contrast that with Coinbase today

 

- who will charge, as best I can tell, Joe Crypto Sixpack 6% or $2.99 to buy $51 of bitcoin (so much for getting away from greedy/sleazy banks with this new financial system that is democratizing finance for the little guy uh!)...6% in, 6% out if I read that properly.....so up to 12% taken off the table for a roundtrip, oh my lord...........so 30 or 60 times more expensive to transact, hold and sell BTC on Coinbase than it will be to buy,hold,sell inside these ETFs via trading on Schwab or Fidelity or Robinhood......and only one 1099b to deal with at the end of the year to boot!

 

Coinbase is in deep dog doo.......and all the 0.01% custodial fees in the world looking after the assets of these ETFs is not going to make up for the lost revenue they had during the golden age of scalping their customer that they've enjoyed for the last decade......that party is surely over for them now?

[alxcii]

49 minutes ago, changegonnacome said:

No I wont be buying - but I will be shorting Coinbase......in an ETF world where the ETF can be traded commision free via robinhood or Schaeb or whatever brokerage you want.....and then the ETF itself carries a tiny 0.2% annual mgmt charge....your charge for a $51 dollar purchase of BTC at the end of the year is measly and reasonable 10.2 cents on that fifty one dollar purchase and you can sell it too. Same 10.2 c cent cost for a roundtrip.

 

Contrast that with Coinbase today

 

- who will charge, as best I can tell, Joe Crypto Sixpack 6% or $2.99 to buy $51 of bitcoin (so much for getting away from greedy/sleazy banks with this new financial system that is democratizing finance for the little guy uh!)...6% in, 6% out if I read that properly.....so up to 12% taken off the table for a roundtrip, oh my lord...........so 30 or 60 times more expensive to transact, hold and sell BTC on Coinbase than it will be to buy,hold,sell inside these ETFs via trading on Schwab or Fidelity or Robinhood......and only one 1099b to deal with at the end of the year to boot!

 

Coinbase is in deep dog doo.......and all the 0.01% custodial fees in the world looking after the assets of these ETFs is not going to make up for the lost revenue they had during the golden age of scalping their customer that they've enjoyed for the last decade......that party is surely over for them now?

 

Before you make another "sure" bet, I'm here to collect the $100 you owe me on the ETF approval that had a 0% chance. 

[Longnose]

21 minutes ago, alxcii said:

 

Before you make another "sure" bet, I'm here to collect the $100 you owe me on the ETF approval that had a 0% chance. 

bahahahahahhahaha

[changegonnacome]

2 minutes ago, alxcii said:

Before you make another "sure" bet, I'm here to collect the $100 you owe me on the ETF approval that had a 0% chance. 

 

Sorry buster - the DOJ brought down Binance and met the exact conditions I stated was the barrier to an ETF approval and was the basis underpinning my 0% approval odds...that 0% was based on the Binance/offshore market status quo.....go look over my posts I couldnt have been clearer on that.......which were numerous on the Binance & the surveillance on spot market problem that made approval back then an impossibility. The day Binance died, our bet died.

 

Like you do know what happened a month or so ago well in advance of the ETF approval? I'm sure you were following......... yep you guessed it.....Binance guilty plea deal to the DOJ & treasury charges & CZ's surrender.....following this Binance shockingly capitulated and agreed to allowing DOJ to put Binance into FULL US government MONITORSHIP.....unbelievable capitualtion......which amounts to US government contractors (most likely audit & accountancy professional paid for by Binance but working for the DOJ) sitting inside Binance offices/system reporting daily everything back to DOJ, treasury and the SEC in real time re: trading activity & Binance's customer activity.

 

So - you didn't understand my posts back then I think and so i guess you didn't understand the significance of the Binance takedown in November and its influence on this spot approval.....I could go dig up the posts highlighting my repeated linking to the Binance problem in the spot market to the approval odds.....our little 'bet' was off the day Binance the criminal enterprise ended & basically gave the US government a front row seat & data pipe to everything happening inside Binance and by extension the majority of the spot market trading volume.

 

Tell you what -  I'll dig up my posts to help you @alxcii not feel so hard done by and as a show of good will - here's the most succinct one in all its predictive glory (but the posts were numerous on the Binance problem):

 

 

To quote myself from that June 2023 post above-  I couldnt have been any clearer or any more accurate in setting out what would need to change for an approval. Spoiler alert what I said needed to change did change in the US vs. Binance criminal case:

 

"Underlying spot BTC market volume dominated as it is by offshore exchanges is the barrier here.

 

You’ve got a chicken and egg problem for the SEC to ever approve a BTC ETF. End of story.

 

Right now the spot BTC market volume is dominated by a long list of extremely dodgy entities….the 800ilb gorilla @ 62% share (Binance) has just been charged by the SEC with about the most heinous crimes an exchange/FS entity can be accused of.

 

Until centralized BTC exchange market volume tilts in a 60 or 70% way to respectable entities in the US or EU…then the spot ETF is never happening. How could it? The spot market is dominated by nefarious actors completely outside the purview of any regulatory agency that the SEC respects. Tell me that in 2025 BTC centralized volume market share will hit 75% for Coinbase, Paxos, Gemini & Kraken then we can have a conversation about a spot ETF approval until then it’s a pipe dream."

 

Well as I said above back in June Binance was an 800ilb barrier to approval........and the US government in November made that 800ilb offshore gorilla Binance its bitch!.......and in doing so.......the centralized BTC exchange market volume DID indeed tilt in a 60 or 70% way (more like 80%) to the very conditions I'd set for a BTC-ETF approval...which is to say that TODAY entities under the complete surveillance, control and dominance of the United States & Europe have deeply deeply significant KYC & transaction volume visibility into BTC land......allowing the SEC to finally approve.

 

I'll also drop another insight for you as the BTC crew celebrate what is surely a blasphemous outcome for Satoshi and his true followers.......BTC, if you haven't got the memo, is now highly centralized with big finance overlords like BlackRock likely to dominate the space with the majority of volume and visibility down to the transaction layer (as I just outlined) sitting under US government ownership & surveillance..... the US government has just unbelievable visibility into BTC land now & big finance has its claws into the fee income........Satoshi must be rolling in his grave.....lots of his supposed true followers have shown themselves to be fakers.....so willing were they to embrace whatever was needed to get US government approval for an ETF........they showed themselves to be nothing more than 'number goes up' crypto Judases...betraying Satoshi in the ETF garden for a few satchels of silver

 

Today wasnt the start of something for BTC.......it was the end.

 

The greedy BTC crew like Cathy Woods just handed the US government the keys to the kingdom for a few gold coins.....and BTC in exchange lost all its outsider libertarian characteristics......its just another piece of financial infrastructure (like the swift payment system) dominated and controlled by the US government. You do get that @alxcii right? - Binance is under severe and total US monitorship, Coinbase/Kraken are onshore & KYC/AML/IRS information printers....and most importantly SAR prisoners, BlackRock for gods sake is likely to become the largest holder of BTC by volume......the US gov just turned BTC in so many ways into..... how would crypto people say it......BTC is just another mechanism through which the "corrupt" US government and elites subjugate the masses. It was meant to be so much more.

 

It's kind of masterful what they've done....that good old US government.......what did Macheivil say all those years ago:

 

"The best way to deal with an enemy is to make him a friend." - Niccolò Machiavelli, The Prince

 

The naive BTC'ers think the US government somehow capitulated today and became BTC's friend......I'm afraid not......the US gov just put BTC under its conservatorship & stewardship......BTC servies at the pleasure of the D.C. now.

 

All the love out there for the US gov approval for BTC also kind of reminds of the deeply melancholy end of 1984 with poor Winston Smith succumbing to the overlords.....I swear I thought I heard some gin soaked tears on twitter spaces earlier:

“He gazed up at the enormous face. Forty years it had taken him to learn what kind of smile was hidden beneath the dark moustache. O cruel, needless misunderstanding! O stubborn, self-willed exile from the loving breast! Two gin-scented tears trickled down the sides of his nose. But it was all right, everything was all right, the struggle was finished. He had won the victory over himself.

 

He loved Big Brother.”

 

― George Orwell, 1984

 

it took Winston 40yrs to break.....BTC broke and sold itself down the river to Big Brother in 15yrs.....for all the early fire and fury I expected a bit longer. Oh well.

[Dave86ch]

The Trojan Horse is inside the walls.

 

Quoting balaji's latest newletter.

 

"Let that sink in! This is what the US establishment truly fears: not Bitcoin as "fraud", but Bitcoin as freedom. They want to rule not just you but the world, so they're scared of the prospect of "a global free-for-all..beyond the reach of US regulation". And they know that any spot ETF will bid up the price of self-custodied Bitcoin outside their control, as Satoshi intended.

 

So: since FDR's seizure of gold, our lives have revolved around the centralized state rather than the decentralized market. The state has had control for so long we've forgotten what freedom is like. But now gold is slipping out of their hands, and back into yours.

 

And history is running in reverse."

 

Balaji Srinivasan

 

Bitcoin has no board of directors where you can place your pawns. It represents the conversion of energy into a global asset. Whoever owns the key still possesses it, along with the opportunity to move their wealth wherever it is accepted in the world, and under the best conditions. ETFs merely provide a foundation for the wealth of sovereign individuals.

 

It will bring the liquidity required by wealthy and tech-savvy individuals to escape the fiscal trap.

 

The Volga will purchase the assets managed by banks that will manipulate the price, and on the other side, the God-Kings will continue to tax the harvest of the middle class as usual, selling them the dream of protection and social welfare, the counterpart of the Christian Paradise.

 

History just rhymes.

 

The trojan horse is inside the walls.

 

Edited January 11 by Dave86ch

[Paarslaars]

Well it's approved, I already established a full position so this won't impact my position.

[Luke]

56 minutes ago, Dave86ch said:

The Trojan Horse is inside the walls.

 

Quoting balaji's latest newletter.

 

"Let that sink in! This is what the US establishment truly fears: not Bitcoin as "fraud", but Bitcoin as freedom. They want to rule not just you but the world, so they're scared of the prospect of "a global free-for-all..beyond the reach of US regulation". And they know that any spot ETF will bid up the price of self-custodied Bitcoin outside their control, as Satoshi intended.

 

So: since FDR's seizure of gold, our lives have revolved around the centralized state rather than the decentralized market. The state has had control for so long we've forgotten what freedom is like. But now gold is slipping out of their hands, and back into yours.

What wealth gain will the bottom 50%  get with bitcoin over the lets say next 5-10 years when it will replace the dollar and why? What do you mean by this new "freedom"? How will lives changes for people that had their money invested in assets before anyways? (stock based pension fund, owning house etc)?

56 minutes ago, Dave86ch said:

Bitcoin has no board of directors where you can place your pawns. It represents the conversion of energy into a global asset. Whoever owns the key still possesses it, along with the opportunity to move their wealth wherever it is accepted in the world, and under the best conditions. ETFs merely provide a foundation for the wealth of sovereign individuals.

If you own bitcoin why would you "move your wealth"? Isn't decentralization making that unnecessary? 

56 minutes ago, Dave86ch said:

It will bring the liquidity required by wealthy and tech-savvy individuals to escape the fiscal trap.

Okay, most people invest in assets anyway? Will cash (bitcoin) be now better than assets? Why?

56 minutes ago, Dave86ch said:

The Volga will purchase the assets managed by banks that will manipulate the price, and on the other side, the God-Kings will continue to tax the harvest of the middle class as usual, selling them the dream of protection and social welfare, the counterpart of the Christian Paradise.

Will the state not be able to get any taxes anymore when the bitcoiners replace the dollar? How will the country function?