[HN Gopher] The SEC attaches a string to Bitcoin ETFs
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The SEC attaches a string to Bitcoin ETFs
Author : janandonly
Score : 14 points
Date : 2023-12-20 18:17 UTC (4 hours ago)
(HTM) web link (finance.yahoo.com)
(TXT) w3m dump (finance.yahoo.com)
| MuffinFlavored wrote:
| Slightly related:
|
| what kind of "trustable/auditable" public analytics are there on
| what contributes to the volume of Bitcoin trading from a "how
| authentic is it" perspective?
|
| Peeling back the onion:
|
| I don't care if exchanges trade back and forth all day to
| simulate fake demand (volume/exchanges between wallets that
| aren't actually going to transactions for goods/services aka
| crypto isn't really being used at $26b/day). That doesn't explain
| to me the larger question:
|
| Who/what (entities, individuals, at what scale) are purchasing
| Bitcoin every day/week/month/quarter and holding on to it long
| enough for it to be up to $44k (166% year to date)
|
| How many individuals are contributing how many dollars and then
| holding the asset without speculatively turning around and
| selling it every single day? How much artificial vs non-
| artificial demand is there? How big of a role is the artificial
| demand? How is the artificial demand able to prop up (if it
| exists) $864b (current BTC market cap) worth of demand/assets?
| peyton wrote:
| It's objectively one of the best-performing assets in human
| history. Lots of funds are buying. What do you mean by
| "artificial demand"?
| I_Am_Nous wrote:
| I believe they are referencing wash trading[1], where trades
| are made of a certain security but the buyers and sellers are
| the same person/group. This makes it appear like there is
| more demand for the security in the market, enticing buyers
| who look solely at trade volume. Forbes did some
| investigation[2] and found that a a lot of the trades that
| occur on exchanges are wash trades. So while it's clear that
| bitcoin is a cultural phenomenon it's hard to say exactly how
| much of the market is real and how much is a show to get more
| people holding bags and willing to pick up more.
|
| 1. https://www.investopedia.com/terms/w/washtrading.asp
|
| 2. https://www.forbes.com/sites/javierpaz/2022/08/26/more-
| than-...
| MuffinFlavored wrote:
| > So while it's clear that bitcoin is a cultural phenomenon
| it's hard to say exactly how much of the market is real and
| how much is a show to get more people holding bags and
| willing to pick up more.
|
| And to the next layer: how effective it is at getting
| "people" (how many people/how many dollars) to "hold bags"
| (invest/purchase it/hold-on-for-dear-life)?
|
| How much of Bitcoin's ~160% runup/return this year so far
| can be attributed to regular Joe's investing their hard
| earned money into it? How can you quantify what
| portion/contribution of the probably... billion/trillion
| shift of money (from USD/EUR/whatever into BTC) it's taking
| to keep BTC at this $40k+ level?
|
| How is there new demand every day?
| MuffinFlavored wrote:
| > It's objectively one of the best-performing assets in human
| history.
|
| I feel like this ignores the question "should it be"?
|
| What purpose is it filling for society in its current state?
|
| I find it highly unlikely that 100% of its daily volume
| ($26b) is treating it as a currency (exchanging it for goods
| + services).
|
| I don't have the statistics but I'd go as far as to wager
| less than 50% of its volume is using it as a currency/vehicle
| for currency/vehicle for utility at all.
|
| Which goes back to the original question: just because it's
| one of the best performing assets of all time doesn't mean
| that it should be if you introduce logic + reason + facts
| around it, right? Who is using it for what currently and at
| what scale? Are 99.99% of people using it as a vehicle for
| speculative investment and nothing else? How many dollars are
| being pumped into it every day (inflows)?
|
| https://www.history.com/news/how-the-beanie-baby-craze-
| came-...
| codersfocus wrote:
| > What purpose is it filling for society in its current
| state?
|
| It's the greatest convenience-security ratio store of
| value.
|
| Precious physical things are not convenient.
|
| Fiat currency is not safe. (Don't bring up consumer use
| cases. Bitcoin is a store of value, not a currency.)
| MuffinFlavored wrote:
| > It's the greatest convenience-security ratio store of
| value.
|
| How? As an average (not doing anonymous things at crypto
| ATMs around the country, which might have cameras) US
| customer who wants to use it, you need to give Coinbase
| (exchange) a ton of banking + social security info, etc.
| (typical know-your-customer KYC validation flow, I think
| you even send then your driver's license)?
|
| And you are supposed to file whatever you do crypto wise
| on your taxes
| TacticalCoder wrote:
| > How much artificial vs non-artificial demand is there?
|
| I sure have no idea but there's demand and then there's supply.
| Supply of newly minted Bitcoins is going down by 50% in four
| months.
|
| I don't know who's buying all the coins but miners have costs
| to cover and it's known they exert a lot of pressure by selling
| part of their mined Bitcoins.
|
| That was Satoshi's great middle finger (I don't care if it's
| good or not: I see it as masterclass trolling): create
| something which, unlike, say, the USD, cannot be printed at
| will.
| jgalt212 wrote:
| So I cannot fence my stolen bitcoin by converting it into ETF
| shares? The SEC is so unfair!
| yieldcrv wrote:
| I actually like the high bar thats set by no-coiners, it really
| does improve the space
|
| This practically guarantees the bitcoin market will become
| extremely liquid for extremely large amounts
|
| over on wallstreetjournal comments it is still common to see out
| of touch people wonder if anyone's ever converted their crypto to
| cash, not knowing how commonplace that is globally for the last
| 10 years as they've only seen negative headlines their entire
| life
|
| its still common for people to have antiquated views about the
| level of liquidity in the crypto space. "Good luck cashing out
| those millions!" _cashes out hundreds of millions_
|
| this standard would move that to billions very easily in a single
| transaction near the best bid and ask, with dozens of bitcoin
| ETFs always doing transactions to match retail order flows in the
| stock market.
| MuffinFlavored wrote:
| > This practically guarantees the bitcoin market will become
| extremely liquid for extremely large amounts
|
| Isn't it actively walking towards block-halving and there being
| a fixed number of coins in circulation (aka walking towards
| eventual illiquidity)?
| yieldcrv wrote:
| by large amounts I was referring to large amounts of notional
| US dollars worth of bitcoin
|
| if bitcoin becomes more scarce with that large notional
| demand, it will be fewer bitcoin traded at higher prices
|
| regarding the block-halving issuance schedule, one of the
| advances bitcoin heralded 15 years ago was being an
| infinitely divisible asset. so if people want to hoard their
| bitcoin then smaller and smaller units can trade in that
| reality, to accommodate larger and larger notional values of
| fiat to trade.
|
| but this alone goes hand in hand with the purpose of the
| block halving - thats just a subsidy to spur a parallel
| economy, as the block reward is intended to be supplanted by
| the transaction fees to redistribute bitcoin. this is already
| working successfully, most bitcoin blocks this year have
| transaction fees greater than the block reward. the same has
| occurred on the Ethereum network for extended periods of time
| too.
|
| the SEC's arbitrary and encumbering standard increases the
| number of transactions on the bitcoin network too.
| strengthening the velocity of transactions and therefore its
| transaction fee economy.
|
| this has come to fruition in every macroeconomic environment
| now. one can transparently see how bitcoin is hoarded, to me
| its more interesting that it matches the same distribution of
| most other asset classes. The M1 in currency is the tiny
| percentage actively traded and used as cash with merchants, a
| small percent of the float trades for equities, commodities.
| no-coiners try to use the same standards to denigrate
| bitcoin, but functionally bitcoin and crypto do meet their
| prior bars and surpass them solely due to the pressure.
| rspeele wrote:
| > most bitcoin blocks this year have transaction fees
| greater than the block reward
|
| What?
|
| [1]https://bitinfocharts.com/comparison/bitcoin-
| fee_to_reward.h...
| TacticalCoder wrote:
| > "Good luck cashing out those millions!" cashes out hundreds
| of millions
|
| I'm helping a non-tecchie with the technical details (she
| bought Bitcoin years ago, stored them on a Ledger with the help
| of someone, has no idea how to safely get them out / how to
| update her Ledger / etc.) and there's some truth to what you
| say but...
|
| In the EU at least it can be _very_ difficult to cash out any
| _sizeable_ amount. 10 K? Sure, fine. 10 millions and more? You
| go to a private bank and they 'll be very interested in helping
| you out. But you have anywhere from a few hundred Ks to 2 or 3
| millions: that's too small of a fry for a private bank and
| _way_ too scary for people doing KYC /AML at regular consumer
| banks.
|
| I'm literally talking about banks _kicking people out_ as soon
| as they mention they have 1 million+ in crypto.
|
| Put it this way: it's _easier_ to cash out hundreds of millions
| than it is to cash out one million.
|
| It's all people working in banks/finance/funds around me and
| that subject comes out often. There are people who manage to
| cash out but there also people having lots of issues. Cashing
| out a sizeable amount is _doable_ but it can definitely be very
| complicated. At least in the EU.
|
| P.S: btw I'm talking about ordinary people who did absolutely
| nothing wrong: they just made an ultra speculative (but legal)
| investment in Bitcoin and/or shitcoins which, on paper, paid
| off.
| yieldcrv wrote:
| I know OTC desks that can handle that for competitive spreads
|
| but Coinbase also services the Eurozone and UK. they also
| have an OTC desk.
|
| all been easy for over half a decade. you dont mention that
| word to banks.
| jbverschoor wrote:
| Well, here in the Netherlands, banks someone flag grocery
| transactions as suspicious with the result that average joe
| will have to provide evidence and all kind of crap to prevent
| his bank account from being closed. "CDD"
|
| If that happens, you're cut off. No more insurance, banking,
| mortgage, nothing.
| mypastself wrote:
| I still don't get it. A fund of what? As the article rightly
| states, a normal ETF consists of a basket of different companies'
| shares. I'd understand if this was marketed as a fund containing
| various cryptocurrencies, but this is... just Bitcoin? Different
| Bitcoin forks?
| sfjailbird wrote:
| No different than a gold ETF.
| jrflowers wrote:
| This is troubling. Considering the history of crypto currency it
| is a mystery to me why would anyone take an issue with an ETF
| operating in a way that's identical to a normal Bitcoin exchange
| website
| jbverschoor wrote:
| So the ETF will be more expensive. That's always the case, as
| there's also a management fee. It will still open up the market
| for many retail and institutional. It will also be good for
| custodians and exchanges, such as coinbase.
|
| And for the price sensitive among them, it will cause more demand
| on actual crypto.
| boppo1 wrote:
| Are there any finance guys here that know the prospectus form
| number that lays out all the nitty gritty details of how the ETF
| holds bitcoin? Like the ETF version of an S-1?
| hbcondo714 wrote:
| They still need to file an S-1 like iShares Bitcoin Trust did:
|
| https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&C...
| tomputer wrote:
| Coinbase Custody Trust Company, LLC (the "Bitcoin Custodian")
| is the custodian for the Trust's bitcoin holdings.
|
| Source:
| https://www.sec.gov/Archives/edgar/data/1980994/000143774923...
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(page generated 2023-12-20 23:02 UTC)