Topic: Will ETFs help to contain Bitcoin price rises? - page 2. (Read 348 times)

This is actually a serious problem if a Bitcoin ETF does get approved.
On the other hand custodial solutions like Xapo are already storing the Bitcoin
equivalent of billions of $ and haven´t abused that kind of voting power so far.
In fact Xapo is hardly making any news unlike other companies in the space
like Bitmain.


Do we really need more of these BTC derivatives? In my opinion they just open
up further possibilities for the manipulation of the BTC spot price. It is pretty suspicious
how the BTC price performs around the expiration date of the BTC futures.

The only problem with custody solutions holding tons of coins on behalf of institutions, is the fact that it grants them a serious amount of voting power within this ecosystem in the future, which is something I completely disregarded initially due to my excitement. For that specific reason I hope that we'll not be seeing any actual coin backed ETF's pop up in the forthcoming years, regardless of how much it could pump the price in the future.

An increase in price isn't worth anything when you have the same institutions (that people try to avoid dealing with in the legacy economy) control the ecosystem in here as well.

Cash settled futures and ETF's are perfectly fine as long as they don't touch the underlying asset, everything else should be a no go. In other words, we have to thank the SEC for not letting the VanEck ETF go through.

it can increase the price not because of the reasons they say but only because it is considered a good news and it is hyped up so the market in a way is waiting for it and then decide based on its result.
something like Futures last year where suddenly people got too excited and went on a buying frenzy.

interesting theory, i just have a question. why do you think these are not based on available supply? aren't papers, contracts... supposed to be backed by real bitcoins? which means the company issuing these contracts have already locked some coins (supply) away that is not allowed to sell contracts.

Everybody seems to think that the granting of ETF licences will push up the price of Bitcoin. I don't agree, and I think that in most cases they will help to contain the dramatic price rises that some people assume will follow. I believe that they will reduce the quantity of "physical" Bitcoin that institutional investors will buy. Institutional investors have a few ways to hold a Bitcoin "investment"

Holding methods that will reduce the available supply, and cause a price increase.

1. The purchase of Bitcoin and keeping them in a wallet or custodial service.
2. The purchase of an ETF linked to Bitcoin purchases recorded in a blockchain transaction.

Speculative methods that are not based on the available supply.

3. The purchase of a paper contract that provides for settlement in fiat. This will not result in a physical purchase when the contract is closed, but it may affect the sentiment surrounding the Bitcoin price.
4, BAAKT - This needs a bit of investigation. On the face of it, contracts are based on physical coins and other assets. The small print states that re-hypothecation and the combining of assets will be allowed for investment and repayment. This seems to open the way for fractional reserve holdings in Bitcoin.

Of course the hype surrounding ETFs may increase the awareness of Bitcoin in the investing community, and this could lead to an increase in physical purchases.