Which leads to the logically consequent question - is there anything in the protocol, or some new software layer in the works - that can provide proof of non-hypothecation?
I'm sure that given the ongoing custom - habits are hard to break - most of the traditional finance world won't take "move inflation the other way - to the right of the decimal dot" so easily. They'd rather rehypothecate, as they are doing for gold and for derivatives based on gold (basically paper money). This is as close to double spending as you can get with btc - through a layer of obfuscating paper. Much too close for my taste.
Once TPTB have their hands on bitcoin, they will come up with new and ingenious ways to keep doing old, disingenuous deeds. One way to avoid that would be a simple way to make sure each satoshi is only hypothecated once, if at all.
Example: I buy a bitcoin ETF, "bakt" by the RealThing. Good. Now I want to know the public address of the btc backing my ETF, and be sure it only backs my shares, not someone else's too. And a loan. And some enterprise capital in some other firm. If such information is easy to find automatically, we can be relatively sure that there will be stern laws against re-hypothecation, and they will be inflexibly enforced.
AFAIK, there are no such instruments, currently.
In case of GBTC, private investors give them cash, which they then use to buy "real bitcoin", but then issue GBTC shares in lieu of such bitcoin.
Private investors have rights to actual bitcoin (after a year), but I don't think that GBTC shareholders can request to redeem their funds in btc (to my knowledge) and even if they do, it would be counterproductive since GBTC is trading at a premium to its btc holdings.
However, maybe funds like you described would be coming when, hopefully, Avanti bank and Kraken bank would finally start to function in Wyoming.
According to Caitlin Long, Wyoming passed a law that prohibits re-hypothetication of "digital assets" like bitcoin and they are unique in that regard.
hopefully, they would have an investable vehicle that you can put in IRA.
However, it is not a big deal, but I already have two btc funds in my Roth IRA-GBTC and CXBTF (XBT provider-some Swedish ETN).
CXBTF did the best since I bought it, but it is really illiquid because SEC stopped it trading on US exchanges shortly after I bought it.
Interestingly, most people don't know it, but US investors can buy Canadian bitcoin ETN (at least in Fidelity IRA and Roth Ira), trading on Toronto stock exchange (QBTC-U.TO).
The good part-it has less premium to btc (when you are buying). The bad thing-it has less premium to btc when you are selling. If you catch it at a wrong time, you might pay premium to buy, but sell with almost no premium if you don't time it right.
I know that Fidelity does it, but you need to call to their foreign trade desk and pay $50/trade.
