Topic: BTC to Bitcoin ETFs - The ownership are shifting to centralized ownership (Read 354 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

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

This is bound to happen.

It was just the community itself and Bitcoin folks that are into this and wishing that the institutions will join the game and they finally did. Realizing that these things have to happen for Bitcoin to grow more in value.

But it's true that you've said that it seems that majority of the sold Bitcoins are going to them and for their own benefit and that's normal business for them and we'll never know when they're going to sell it all in a blow.

This is an interesting take at ETFs. I have seen almost everyone in favor of Bitcoin ETF and I am sure that it has something to do with how it will affect the price. Right now though since it has only been approved, there might not be as much companies buying bitcoin and they are not yet the ones who hold the most amount of bitcoin.

To us, this might be a great news because these corporations holding bitcoin will definitely drive the price up. We can not do anything regarding this. We can not stop anyone from buying and holding bitcoin. I do wonder if Satoshi expected this to happen. Being the genius he is, I think he did.

What we can do, is we can't buy the whole BTC supply circulating in the market, and neither we can stop people from selling BTC, they don't know whom they are selling, whether they are on CEXs or are on DEXs, they are just selling and buying without thinking and there is nothing bad in it until they don't consider this fact you talked on. I also know more and more BTC going into the custody of centralized exchanges will mean BTC won't be in the hands of individuals, instead, they will be in the hands of big institutions who will be trading BTC in between. They might not release it in the market.

For example, Grayscale sold BTC and was bought by BlackRock and there are many other examples like of ARK's selling BTC future shares to buy its own BTC spot share (ETF). I mean, this can be used to manipulate the market and that's what is happening till now after the approval.

But what we can do about it, as I aforementioned we can't buy, can't stop, so all we can do is take profit from the shortage of supply and hold onto what we have now, because the way BTC's supply is going I assume BTC is ntoffar away from touching $250k per unit value.

Not true. If you look up some stats, it's actually miners that have been holding bitcoin when it was below 40k sold the ETF news on Jan 12. There's a chart showing coins held by miners, you can look it up, and that decreased by a lot in January, while before that it was growing for months.

For an institution to buy OTC there has to be someone willing to sell OTC and if they're willing to buy over 1k BTC they're not going to contact normal people like us, but mining companies who have the supply to satisfy their demand.

Also, GBTC sells using spot bitcoin exchange, while BlackRock and others buy OTC, so your theory of GBTC selling to BlackRock doesn't hold. If this was happening we wouldn't see such a large negative pressure in January from GBTC because they'd sell everything OTC to other funds.

If we look at the situation that was even surrounding the approval of this ETF bitcoin one could actually see manipulation cards been anticipated. My first thought was why did the government that has actually rejected it before simply turned its ears to it, maybe they seemed to see that it is the only chance to have this big institutions trying to get into bitcoin at one place and then probably kill off not just privacy of the investors but also to try and manipulate the market.

Although I still stand that the manipulation wouldn’t be easy as they would hardly control one-third of the coins, but one thing that will definitely help them is the spread of FOMO, it happened when Garyscale started selling there coins off, many follow suit and it affected the market. Personally I am not bothered because this kind of panic are definitely for short term holders, as the market change will affect them.

I have accepted one thing about trying to let people understand decentralization, just accept that people are going to do anything that will make them happy irrespective of what you said to them, your option doesn't matter and that's why you see people selling their bitcoin, it's their by the way and they do what they like with it on exchanges they warned them about.

ETF has money, they know it's what many wana be investors of Bitcoin want and that's why the are buying and stocking anyone they got their hands own and you can't blame them, money rules the world. Institutional investors are just clown who want bitcoin but feel native bitcoin isn't something they want to have thier hands own, they prefer to have it inform of ETF, they supply the money because they have it and ETF keep pilling up.

I have learned that what is mine is mine and no one can take that from me and I will hold mine because nobody will have access to it, if the new investors can't keep the Satoshi legacy, we can and it will remain solid if we keep it the conventional way of Bitcoin.

I do agree with you OP. I was never in favor of ETF at the first place. The amount of money these corporates control, it's very easy for them to position themselves as a dominant player of the market and can control the market as per their wish. Most importantly, the decentralized nature of Bitcoin will be gone with all these centralized invasions.

We are just seeing the beginning of this shift and we really don't know what the future holds. ETF has been approved by the US only. Think what will happen if every major economies start introducing Bitcoin ETF.

right now ETF are not gobbling up much new coin
most of the coin that go into things like fidelity/blackrock/ark came from... wait for it.. [drum roll] grayscale
so basically its one institution shuffling to another institution

Let's not forget that more and more coins are going from individuals to centralized platforms. Private ownership and equal distribution of coins are being reduced.

Now for many people this is not a problem, because they are making good profits from the coins that are being gobbled up by the ETFs. I have no problem with that, because ownership of coins should not be restricted, but it is sad to see our coins going into centralized platforms, where people do not have control over the private keys. (The private key are controlled by the trading platform)

It feels to me, like we are selling the keys to our soul and the legacy of Satoshi Nakamoto.