Topic: BTC to Bitcoin ETFs - The ownership are shifting to centralized ownership (Read 439 times)

First of all, there have been quite a few institutions in the crypto world already that own large amounts of coins. It's not like companies are only now finding crypto currencies as a form of investment. ETF is just another layer for investors to participate on the crypto boom. Nobody is forcing us to sell our coins to the institutions, every investor makes their own decisions. And now with a Bitcoin price around the 50,000 USD levels there will be even people willing to take some profit and sell their coins. I don't think it's fair for us to sell our coins and then complain that big corporations are getting too many coins. It's up to all of the smaller investors to decide what we are going to do with our coins. The ETF companies are never getting their hands on the HODL investors coins. Just don't sell your soul guys, if you don't need the money. We are all free to choose what to do with our coins and our money.

you actually made my point, read your own words now

grayscale had 620k btc on the 11th.. blackrock had 250btc($10m seed).. agreed.

on the 13th, we now agree.. and you just said and i just shown you...
grayscale had 605kbtc (-15k) on the 13th and blackrock was at +11k on the 13th

what you are also not aware of is grayscale PRIVATELY was holding onto an extra ~13k(in coinbase) of previous years fee earnings because previous year it was sitting at ~634k+ pre fee syphon, so they had more at play inside its sister company coinbase prime ready to trade free and clear of the gbtc shares,.. so more than you think was held within coinbase prime at launch from grayscale

so when you do the math the coins were not coming from miners on spot(not prime). but instead were majority coins from coinbase prime(from grayscale holdings)

all of which, data, math, coinholdings and images show majority came from grayscale via coinbase prime (OTC exchange and custody.. not regular spot exchange via miners).. unlike your opinion that miners were the majority funders

but lets show you the images again. just to put a line through the debate of where the majority of coins came from and went to



do you see the lines, do you see above and below the lines. do you see the patterns of where most coins came from.. finally?

now..
with ETF shuffling in coinbase prime.. they were not buying from normal public spot exchange(thus no btc push up, nor buy demand wall to prevent the down).. so when miners dumped on spot, due to them not using coinbase prime custody.. the normal spot dumped.. because.. lets make this clear:
ETF's were not demanding spot exchange coin(no buy wall) the etf's were not chewing up the miners sells to balance out the miners sell supply pressure (to prevent the dump).. there was no buy demand wall 'on spot' to eat the miners sells supply dump

oh and one more thing..
you also said that grayscale was selling direct to spot..
nope.
if you dare read the SEC filings of all ETF. they cannot just take the coin 'in-kind' to then spend as they like(for instance on spot exchanges)..
instead their custodian has to fund buyers to sell to for "incash" which coinbase did via PRIME(custody+OTC).. as all the numbers and images and data and regulations suggest

your theory of "majority from miners via spot" does not hold weight
i hope you get it now,

..
now lets fast forward to the week of a week ago, (well starting slow from mon feb 5th)
the week HAS seen grayscale slow down on its out flow whilst etf's like (but not limited to) blackrock accelerate its inflow. which has been where coins were coming from spot. then moved to prime to be locked up
which explains why the spot price went from $42k-$52k in february(monday 5th feb+)

notice the large coin grabs from spot from ~8th-11th. that then became etf lock ins as of 12th+ (during business days where the lockins can then happen. and then register on holdings list next day)  caused the spot market from the 8th+ to move from mid $40k's accelerate to become over $50k this week
(i needed to mention how the lock in data of etf holdings is delayed by a day-3days due to business practices of business hours of custody officiating and reporting policies, clarifying the finer detail before those numbers start to confuse you too)

Lots of coins have already been sitting on centralized platforms, mostly exchanges - did it cause any problems for the network? No it didn't. It's a good thing that Bitcoin didn't took the course of that PoS nonsense, because then we'd indeed have to worry about coins being concentrated in one hands, because each coins would also represent a vote on the network.

And we'll never see a scenario when all coins are on centralized platforms, there will always be supply of coins for p2p trading because there will always be demand too.

I guess no one really anticipated it, or at least when Satoshi left, he didn't foreseen that his invention might progress and evolved to what we are it known by today, an asset, a store of value and form of money. And so we can't really blame anyone here, specially not Satoshi. He has still his original vision, but his invention grow so much in the last 10 years or so.

However, we can still continue with his legacy, store Bitcoin in a wallet with our control with our private key and with safe practice and we all should be good. If there is ETF then good, if not then doesn't matter at all. We have existed without this institutions, this is just another another parameter in our space that might have a positive or negative effect so we will take it like that. And we still have regulatory uncertainties, not just in the US but throughout. So there could be no shifting to centralized ownership and if there is, not might not be that big as we picture it right now.

This is what we don't have control over and it is inevitable to happen. With the financial institutions trying to cope up with the newest trend and profitable market that they can dive in, they just can't ignore owning Bitcoin through their approved ETFs. While on this matter, those people that are scared of Bitcoin because they don't know how to own one or they just don't like to step in because of the news they've heard about it being part of many illegal things in the past. They're leaning towards on its trust based on these institutions because of their history and not with Bitcoin alone. That's okay and eventually, we're going to accept the fact that most of the Bitcoins that we're going to sell are going to these centralised platforms and there is nothing we can do from that. They've flowed vast amount of money to the market but a huge share and cut is also going to them later on.

This is what I am looking forward to after the speculation of ETF approval on Bitcoin. Before ETF got approved on Bitcoin I am already speculating that we will see a huge move upward as I compare it with Gold ETF before after it got approved.

Overall, I believe that one of the biggest changes to the cryptocurrency market in coming years is the move towards centralized ownership of Bitcoin through ETFs.

When the Bitcoin spot ETF was filed by BlackRock and other big investment firms before the was approved a lot of Btcoiners were happy about the awareness and billions of cash inflow that the BTC market would experience and never thought about the disadvantages which I once pointed out in some of the posts before the ETF was approved.
The point is there's nothing we can do about every individual investment decision about crypto cause the sad truth is that most investors only care about making a profit, not the legacy led by Satoshi but we can only enlighten them about the danger in investing in BTC spot ETF.

Isn't the 12th that is important here? It's the day of the dump.


The only numbers I mention are the amounts of BTC stored and the value of that BTC in dollars - totally on topic.


The blue bar of your chart that represents GBTC is around 605k mark on the 13th, while the combined is close to 640k, showing that the holdings of GBTC fell down by ~15k and somehow out of the blue the other ETFs accumulated additional 20k BTC which is... yup over 2x what GBTC had sold.

But it doesn't fit your rhetoric, right? Even though you chose this chart yourself and then proceeded to bash ETFs like they're nothing, just sending money between themselves and the fact that half of their income doesn't come from GBTC is nothing, let's ignore it and move on.

OP, I understand and agree that when you think about it ETFs gradually want to put everyone's Bitcoin in their wallets and then set the price as they see fit. Sometimes I reflect that this EFT agreement cannot be separated from the positive and negative sides, namely that we really need a big push to see the price of Bitcoin rise significantly because as small investors when we see 100% profits we think it's time to let go and hope that next year it will accumulate again . So that's what I think from a profit perspective and anyone would want to make a profit, right? While on the other hand, large institutions such as Blackrock, Fidelity, etc. who are members of the ETF proposal alliance have their own agendas, it is possible that bad news causes prices to fall as part of their strategy of taking discounts. This kind of thing is familiar and has the media they need.

In the end we ourselves surrender Satoshi's goal of freedom to those in power in the market. And I never stop to reflect on incident after incident. Remember when there was a mystery 26.9 Bitcoin sent to Satoshi's wallet? Perhaps this is a warning that Satoshi does not want to let his Bitcoin fall into the hands of institutions. I consider it a gesture that contains a hidden message from the sender.

The stock exchange in my country stopped trading gold contracts. One of the justifications was: "If an investor wants to have exposure to gold, they can buy ETFs."

In the same way, the existence of bitcoin ETFs can be used as consolation for investors in the face of potential regulation on the personal custody of bitcoins.

I think there should always be a choice. As long as non-custodial wallets are legal and widely accessible, that's good enough for me. As long as we can discuss the importance of having one's own keys and can convince others to go for non-custodial solutions, it's fine. Centralized platforms are another choice, a choice that some might want to make because they're very used to having an option to restore a password if they lose it, or to rely on a big corporation instead of relying on themselves. If people know the pros and cons of both options, they can make their own decisions. I prefer a non-custodial wallet, but I don't think that everyone must share my preference.

Transaction fees will be main income for Bitcoin miners when Block subsidy falls smaller and smaller. I believe that income for miners will be well enough if Bitcoin continue to grow in price.

In past halvings and past cycles, price rises more than 2 times for each cycle so if in future halvings, we only need price to double, it will be enough for Bitcoin miners.

I think not only about impacts of transaction fees on Bitcoin miners but also for Bitcoin users. In 2023, with appearances and hypes of Ordinals, Inscriptions, Bitcoin miners got massive income from on-chain demand. They even don't need to have doubling price of Bitcoin to double their income, not only maintain their income.

But such hypes like Ordinals have very bad impacts on other Bitcoin users. It becomes more expensive to make an on-chain transactions since 2023. Latest weeks, mempools are cooling down and look good but not sure how it will be overloaded in 2024 bull run.

Yes, you actually get what I am saying and it is not just the centralization... most of the bitcoins going into these centralized trading platforms are also going off-chain, so none of those coins are generating transaction fees for the Miners.

Transaction fees are crucial for the success of Bitcoin in the future, when the Block reward falls away.

We cannot know for certain who and what is the networth of these thousands of smaller investors, however, there are some people in social media who have said that Merril Lynch is only accepting high networth individuals for their bitcoin ETF trading desk. They control where the inflows of fiat should come from and if this comes from someone under a low salary bracket, they will not allow this type of person.

Also, you are correct that the ETF does not own these bitcoins, however, these investors have agreed to the rules of the ETF. The ETF controls and can decide who they want to accept to invest on bitcoin. This market will not be free for everyone anymore.

I feel that it is also a bit unfortunate that Bitcoin ends up this way. Bitcoin is fast turning into a mere asset that's being traded on centralized exchanges, kept by third parties, and represented by various financial tools created by the very players of the old system.

Of course, we cannot control how other people would want to use their Bitcoin, but if this the direction that Bitcoin takes, it somehow loses relevance. Of what use is Bitcoin's core philosophy when instead of being a solution it has now become a part of the problematic game?

However, at least those who don't want to get into this game still have the option to stay true to Bitcoin's spirit.

The point is that these "actors" mentioned may have their tax base in the United States, but there are investments there from all over the world, for example Norway has an investment in bitcoin with Greyscale...

In any case, nothing can be done at this point, and that is essentially the reality of the Satoshi, which is perhaps the unit of measurement that will be most decentralized in the future.  (This is obvious, it seems, but think about it carefully, if such a thing is the case in the future, hey! in the correlatives of users or possessors)

Adoption started simply to "Buy" bitcoin, and not understanding decentralization.

ETF for those who aren't technically familiar with Bitcoin and don't want to purchase Bitcoin from the market they trade on ETF. They don't have control over Bitcoin. It's something like centralised exchanges where we don't have control over the funds. So even if we want, we can't ignore the centralization of bitcoin trading. Unless we are holding bitcoin in our non-custodial wallet, we aren't the owners of that bitcoin. So using centralised exchanges or an ETF broker is almost the same. The only good thing about ETFs is that we are getting new investors. 

gotta love how you skip a few days at the start by talking about the 12th with GBTC

 and then jump over some numbers then jump into dollars

secondly blackrock started with $10m worth of coin(~250btc).. which by the time of the 13th had 11.5kbtc (worth $500m)
so blackrock having only $500m(11.5k btc) where grayscale moved out $600m(15k btc)... more then adds up


first few days of ETF SHARE(not coin) trading of blackrock SHARES. emphasis: trading volume of the SHARES was $1billion

please learn the differences between their coin accumulations vs the share volumes of trading shares

have a nice day

Not really. If you look closely, you can see that GBTC held 620k up to Jan 13 and then 605k on Jan 16. The largest dumps took place on Jan 12 and 13. In that time GBTC exchanged only 15k BTC.
At the average price of $45k that's only $675 million.

This is confirmed in a few articles like this one, where the author shows that on Jan 12 GBTC sent coins worth $200m to Coinbase, so sending 600m in 2 days seems to add up.

According to various news sources, including pretty decent ones like Reuters, combined inflows of all ETFs in the first 3 days neared $1.9 billion.
BlackRock was leading the way with 1 billion in volume on its first day of trading, although this number includes GBTC, which according to Yahoo Finance had a volume of 474m on Jan 12 and 399 on Jan 13, but this is both buying and selling, as some of it is people converting from Trust to ETF, which makes sense again if the other  numbers are good. $675 m in outflows and (873-675) $198 m inflows into their ETF
https://www.theblock.co/post/272123/blackrocks-new-spot-bitcoin-etf-tops-1-billion-in-big-first-day-of-trading

The same source shows Ibit at 1B on the first day and FBTC $483 m, so these two alone bought ~1,5 billion dollars of bitcoin on their first day and on that day GBTC sold ~700 million.


I really don't see how less than 50% is "most" and I'm generously assuming that all of the unconverted coins on exchanged by GBTC on the first 2 days of January was sold OTC directly to other ETFs, which might not be the case.

As for miners, Check when the miner supply started dropping. It was exactly before the launch of ETFs, so they were selling into the FOMO, on 10 January and later, yet it did not cause a serious drop in price.
Also, the drop in supply held by miners in January was AFAIK the highest in the last 12 months, so what proof do you have that they did not sell to ETFs? ETFs acquired 50% of their coins in the first few opening days from someone else than GBTC, so who might have that much coin in stock? My guess is miners, which coincides with the supply drop in January.

For those interested, GBTC supply can be found here

51% mining is mitigated mostly by not accepting low confirms as 'settled' for large amount an adversarial pool would attempt a re-org.
(they wont buy/rent billions of dollars of miners to 51% for just a coffee, but to undo a 200,000btc they might)
a 51% attacks most annoying trick would be to purposefully "empty block" to cause congestion
51% attack cant really change the code, protocol of the network. not without also offering people on the network a new node with altered code

..
owning any % 5-20-50-90% does not affect the blocks, or code protocol directly, coin ownership does not cause issues..
however psychologically economic nodes(merchant services) that still want coin, would probably sway to the whims of proposals of such high yielding coin owners desire in exchange for some of that coin IF rich owner(s) did then say they only use a certain node that communicates transactions in a certain way of certain format.. then economic nodes may sway their node branding to follow the majority coin owner(s)
meaning if it changes code protocol by following the different brand, it can mandate mining pools nodes to also follow this brand or have blocks rejected by not processing a format certain high yield coin owners desire