Topic: BTC to Bitcoin ETFs - The ownership are shifting to centralized ownership - page 2. (Read 354 times)

Before Bitcoin ETFs exist, Bitcoin was already centralized because most people choose to hold their coins in centralized exchanges over non custodial wallet because they don't want to spend for transaction fees and holding in a wallet can't make them able to generate more coins e.g. staking. I know centralized exchanges do charge high fees, but they don't have to use that because they only pay for trading fees, holding in CEX or cash out their coins.

This problem was happen since few years ago, but ETFs just increase people to invest in centralized platforms.

Everyone is free to do whatever he(or she) wants with his coins. If someone wants to leave his coins in a centralized platform, let him do so.
If you want to keep your BTC in a cold wallet, just keep them. Nobody is forcing you to use centralized platforms and hot wallets.
Equal distribution? No financial asset in the world is equally distributed among all the people. Why would Bitcoin be equally distributed?
Concentration of capital is a natural process for capitalism. Mass adoption and having more institutional investors in the crypto markets would lead to the natural process of concentrating more crypto in the hands of several big corporations. We can't stop this process, but we could make some money along the way.

There is nothing anyone in Bitcointalk can do to stop these institutions from acquiring Bitcoin. Everyone who owns Bitcoin is free to sell his coins to anybody or institution without restrictions. The decentralized nature of Bitcoin will make it very difficult to have a consensus that people shouldn't sell to these ETF operators. There are some events we don't have control over we just have to relax and see how things will turn out.
Bitcoin is designed to be a decentralized currency anything outside this is an aberration and when you misuse anything there is every tendency that there will be a problem. I don't wish that these investors should experience any problem but I think there will definitely be one in the future. The fall of FTX and other exchanges made people embrace decentralization, I suspect such an event might happen in the future that will make many people embrace Bitcoin in its traditional form.

No, it is 51% of the hash rate that are needed to mine bitcoins. When you achieve that, you would in theory be able to double spend for a short while, but the cost of doing that... out weigh the benefit of doing that.

Also, after you have done that and it gets known... believe in Bitcoin will drop and people might start dumping coins, which will increase supply and cause a huge price drop, if the demand is not there to buy it.

This is more about centralized trading platforms buying up the availlable coins in the long run and placing it on centralized trading platforms. (Taking bitcoins out of circulation and out of the hands of individuals that wants to buy it)

I read in the local media that ETFs already hold 3.3% of the total supply at the moment. There are currently 11 institutions listed in the rayscale ETF trade, BlackRock, Fidelity, Franklin Templeton, Invesco, VanEck, WisdomTree, Hashdex, Bitwise, Valkyrie, and BZX. There are about 650,000 BTC in total. If you look at this information, it is too early to assume that BTC has entered 1 owner (centered). They only control about 5% of the total supply in circulation. It is still quite a while because this is an accumulation, not from one company alone. I hope this will not happen, because the Bitcoin system was created not to be centralized.  In fact, if I'm not mistaken, people have to own 51% of bitcoin to be able to destroy Bitcoin. CMIIW

1]https://www.coindesk.com/learn/what-is-a-51-attack/

Just one country has approved Bitcoin ETF. Now imagine, if all other major and progressive economies of the world starts introducing Bitcoin ETF. Can you think what would happen? These big corporate will stay buying Bitcoins like crazy. They will definitely have the power to control a majority stake of this asset class.

Another thing you have rightly pointed out, the FOMO and false information. They can spend on advertisements to spread false information about the Bitcoin at their whim. Bitcoin should really stayed as a common man's currency system. They shouldn't have gone to the corporates at the first place. Tough time awaits for us!

There is not really anything we can do, in a free market as long as a person thinks the price is right, they can sell their assets to anyone that can legally buy them.

So while I can understand your concern, we knew this was coming and if anything this was something many people were looking forward to, since this will most likely bring an increase on the price of bitcoin, and while this means huge companies will have control of most of the coins which have been mined, I think this was a change that was coming sooner or later anyway.

This isn’t necessarily true because you need to realize that the billions of bitcoins which are AUM for all these etfs are owned by thousands of smaller investors. The etfs don’t own these bitcoins.

Sure there are some institutions buying the etfs but many are regular investors who just want it on their 401K. So there is no proof that these etfs will lead to centralization by rich banks and other large institutions.

my view, and from whats already happening. is as such

looking at the institutions.. we have things like DCG and river financial
looking at their funders we can see kingway capital
all of which have invested in core devs and many bitcoin services.

they have invested ALOT of money into things that incentivise making bitcoin network annoying whilst promoting subnetworks for middlemen hoarding/routing.

so yes the path being set is to make bitcoiners lives more burdensome and making a path to ETF easier..

its not a new game
back in the days of creating the commodity markets of things like wheat.
the commodity offering institutions got regulators to help them kill off the family farms and replace it with commercial farms. whereby they begun to control the wheat markets.

we should not be stroked and hugged and kissed with loving whispers into accepting the only way forward is to abandon the bitcoin network and move to commercialised subnetworks. we should not be ego stroked into accepting bitcoin should only be the reserve currency rail for the elites, while having our funds syphoned in commercial services of middlemen, via fees, account renting and wallet premium subscriptions of on offchain services

However, the warning signs are there for what might occur in the future of bitcoin. If enough of these high networth individuals buy the bitcoin spot ETF, I reckon Blackrock and the others can own much of the supply and have a gated market where people can only invest in bitcoin through their ETFs. This will not be right for the real purpose of bitcoin as peer to peer cash. However, this is not the fault of the people. Similar to what has been argued before, this might be the fault of bitcoin's monetary policy.

I shared this before many times but it was ignored because much of the people in bitcointalk.org did not want to address this. I reckon this might become more recognized at present because more people have begun to understand that there might be a problem.

https://docs.grin.mw/wiki/extra-documents/monetary-policy/

I think ETF is in other countries.

here is a list from https://thecryptobasic.com/2023/11/08/here-are-countries-with-functional-bitcoin-spot-etf-products/



Of the nearly 200 sovereign states and territories across the globe, only a handful of eight have operational Bitcoin spot ETFs that are publicly traded on stock exchanges.

The countries, compiled by the crypto aggregation platform Coingecko, include Canada, Germany, Jersey, Brazil, Liechtenstein, Guernsey, Australia, and the Cayman Islands.

many people pre etf launch expecting grayscale to hold onto its hoard. and not shuffle it over to other ETF. they thought ETF's would buy their own coin from the open market..
however january shown just a institutional shuffle from one etf to the others.

however there is only so much coin Grayscale has.. (72%) left. meaning 28% lost in one month
eventually other ETF's are going to syphon coins from the open spot market instead of shuffling. and these large basket purchases will directly affect spot price..

as for the effect on the other ecosystems such as merchant use and services offered.. well gold is not used in retail purchases of goods or services, so not much positive impact on merchant use due to being seen as an investment asset..

what bitcoiners need to do is not wait for ETF investments to spark some commercial investment into fixing bitcoin utility annoyances, because so far those commercial investments have produced unfinished sandbox subnetworks used as workaround of work around of work around to the annoyances that prevent bitcoin utility, all of which have not helped bitcoin utility, but just promoted people should use bitcoin less.. so no positive impact there

we need a fresh set of eyes, a fresh set of devs to go back to scratch and propose different strategies to solve bitcoin scaling/utility. that actually benefits bitcoiners.

ETF businesses have put a stake in the ground to say they see bitcoin as something that will be around for years. but now we have to get on and actually start proposing proper proposals to make bitcoin easy, cheaper to use for the benefit of bitcoiners instead of waiting for commercialised flawed sandboxes to solve things for us

ETF this, ETF that, I think that people are now reasoning better, this is unlike how it was so lousy before the approval. Even then, I wonder what difference the ETF would make in the crypto space if not for Bitcoin shifting hands from one means to another, and from personal storage to company storage. I see no big deal in this, but it's nevertheless the hype of people. However, it is plainly the means by which the corporate entities will be able to control Bitcoin indirectly. The more we make it accessible to them, the more centralised it becomes.

Sincerely, I just didn't feel it the way people felt it at that filing time, Bitcoin was already accessible before it, so what? As it is now, I do not know the model at which they will operate eventually and start allowing people access as they've not started fully, but no way this will not increase government oversight.

there are no issues in how people want to use bitcoin, but we should atleast strive to point out the risks and not just play promotion platitude ass kissing

(people on this forum have already heard the word bitcoin to have even found this forum. so they do not need the cheerful whispers of utopian promotional recruitment speak, they are now looking for the real, factual information and risks they need to be aware of)

bitcoin in CEX have no insurance. so unlike a bank you do not have the $250k FDIC insurance
use a CEX if you day trade where depositing/withdrawing is a hassle but realise the risks. and note the "you can lose all your investments" slogan

holding long term because you have no intent to sell anytime soon. its best to suggest storing on ones own private key. but note the risks of different wallet, software and what they do or dont offer

..
those taking advantage of ETF share buys. should know although they get tax advantages whilst getting exposure to the spot price. they need to know their broker, ETF trust at their sole discretion can close the share offering. and shares are not claims to any rights to any asset held. you cannot redeem bitcoin spot ETF for actual bitcoin. you only have price exposure at a share ratio to bitcoin price based on the Nav number the ETF trust chooses and can change at their sole discretion without needing to give notice or get votes from share holders

OP, as a bitcoiner, sure its sad. But as a realist, nothing wrong with it. People can use bitcoin any way they want to. People storing bitcoin in centralized ways for convenience, whether in ETFs or just having their bitcoin custodied by companies, means those services of convenience get better. Convenient services always increases adoption for a technology. Increasing adoption is good for Bitcoin. Gate-keeping Bitcoin only to purists is not good for Bitcoin. For example, if we expected everyone to run their own node and custody their own Bitcoin, Bitcoin would never be all that useful because most people would never bother owning any Bitcoin.

An analogy:
It'd be like if you expected everyone who owns a car to know how to do all the repairs on their own car. If that were the case not enough people would own cars to have it be worthwhile for the govt to build roads everywhere and thus transportation would be much worse which would hinder society. Sure, ideally, we all can fix our own cars, but in reality only a minority of people will be that hardcore group.

Now of course key management is much easier than learning automobile repair, but its the same situation. There's going to be a certain amount of people taking full advantage of all of Bitcoin's powers - self-custody, running their own node, maybe even operating a mining machine. While there are going to be a lot more people self-custodying but not running their own node. While there will likely be even more people using an entire industry's apparatus for allowing them to own and/or use their Bitcoin conveniently without worrying about how Bitcoin works. Sure, you lose power with convenience, but you can still be a Bitcoin participant by taking the convenient and less powerful route.



Humans appreciate convenience, and people tend to have a limited amount of things or areas that they want to be 'hardcore' about. For many people they may want bitcoin but Bitcoin is not going to be one of the areas they care to become an expert in. Just like your average stock investor is just putting away a bit of money each paycheck into an index fund for retirement, rather than reading up on company quarterlies and picking stocks based on a bunch of their own research. Just like most people are going to pay someone to fix their car, even very simple things like changing a bulb or changing the oil, rather than learn about how to do it themselves. Just like, well everything, in which most people will choose to pay for convenience over needing to apply their own bandwidth to be self-sufficient, because everyone has limited bandwidth.

People are free to use Bitcoin at any level, whether it is the ideal monetary sovereignty level taking full advantage of Bitcoin, or the "this is just an investment held in a bank or investment firm" level. As bitcoiners we can always recommend people the best way to have Bitcoin is to take advantage of as many of its revolutionary powers as possible, but we have to accept lots of people aren't gonna want to bother with that. And that is entirely natural and expected, and not something to fret over, or claim Bitcoin is no longer decentralized because of (as some people do). You can only control your own actions. If you hold your own Bitcoin, be proud of that, and be thankful that your self-custodied Bitcoin is becoming ever more useful as more people adopt Bitcoin in whatever way they desire, because greater adoption means greater Bitcoin acceptance and eventually we get to the point where you can largely live on a Bitcoin standard instead of a fiat standard, if that is your ideal goal.

Those Bitcoin Spot ETFs mostly use Coinbase as their custodian partner and this means your worry is true. Investors in those Bitcoin Spot ETFs have to trust those Bitcoin Spot ETFs and Coinbase to buy and store bitcoins transparently and handle those bitcoin safely as well as without shady activities to steal money from investors.

Those investors have their money, their choices and they can make different decisions, by buying shares of Bitcoin Spot ETFs with above risk; or to buy bitcoin by themselves and be self-custodian for their bitcoins.

I agree with risk you raised here and it's know by senior bitcoin investors. Not your keys, not your bitcoins.

For many, Bitcoin is an investment, and they do not even want to read about the basics of Bitcoin and how to set up a wallet correctly. Some even leave their money in central services or closed-source, disreputable wallets such as freewallet. For them, investing through an ETF is much better than wasting their currencies to them. Scammers, but if you are thinking beyond investment, then surely the only real Bitcoin is the one that you (alone and no one else) has its private key.

correct title of topic should be
BTC to Bitcoin ETFs - The ownership are shifting from centralized to other centralized ownership
we have yet to see the mass individual sell off to then shift to centralized.

OP, it was clear that the majority of coin ownership would eventually shift to centralised platforms. The government has never supported Bitcoin technology and has long sought to centralise it.

They were unable to beat bitcoin, so they had to join them by claiming to be reliant on holding coins for the big whale investors in order to act as market manipulators when they now own a large portion of it. This is completely contrary to Satoshi's visions, but it will have no effect on the censorship and path that bitcoin was launched on.

you should check that GBTC was offering alot of coin on the same platform as blackrock and some other ETFs
GBTC and blackrock both use coinbase prime(part of the custody OTC suite) not the standard coinbase public exchange..  know the difference

if you look at how many coins GTBC had jan 10th. compared to now. and then look at how many coin all other ETF have now compared to jan 11th.. you will see the shuffling clearer

when you look at this
https://platform.arkhamintelligence.com/explorer/entity/blackrock
https://platform.arkhamintelligence.com/explorer/entity/grayscale
and this


it becomes clearer

funny thing is it was miners doing the negative pressure on the standard exchanges, because they were not part of the coinbase prime(custodian swap) deals of exiting one etf to enter the others

as for your miner speak
the amount of coin that came from GBTC was high.. the amount of coin that came from random miners was near ZERO

however there are some ETF that invested into marathon POOL. and they done their own closed door deals(not on public exchange) with ETFs but that amount was not as much as the deals with GBTC

other miners who sell pressured in january had nothing to do with the custodian deals. and instead were just selling coin on the open spot exchange

know the difference

if still unsure
look at this image below. notice the gray[scale] below the 0 line.. note the shape and angle of depletion.. compared to the other ETF above the 0 lines and angles of accumulation.. coincidence of consequence.. you choose

note the exact points of the 12th, 16th,19th,22nd the pattern[mirror] explains itself