Topic: Winklevoss Twins File to Launch Bitcoin Exchange-Traded Product - page 5. (Read 8509 times)

I truly fail to see why this is absolutely anything but good news.  I'm been trying myself to locate a custodian to facilitate bringing retirement funds into Bitcoin.  This is it; finally.  My only complaint is I didn't get it done first.

Bridging the old pre-Bitcoin world into the age of Bitcoin will take many such arrangements.  Eventually these bridges will look dumb but they are a must for now.

When the underlying asset can be manipulated it's going to be difficult for SEC to approve this.

You don't. This is a product for people who want exposure to something that serves a gold-like (Gold 2.0, IMO) store of value purpose. Yes, it's only "exposure" because people owning these ETF shares will not actually possess the underlying bitcoins. So they'll get the price-action, but be subject to the same counter-party risk that nearly everything in the fiat economy is exposed to.

And that's fine. This product puts further options on the table for people. They can get the hard-asset exposure without having to deal with what many consider "sketchy" small operators (bitcoin exchanges), and they can get in and out of the position as easily as buying/selling a stock, which they're already very familiar with.

Personally, I'll just hold my own bitcoin and trade it directly (if I ever decide to sell any), but I see this ETF product as a way to increase bitcoin awareness and exposure. If it also increases market-cap, that's a big net benefit too; not just to the net-worth of people holding bitcoin, but to bitcoin's utility as a currency too.

Bootstrapping the world's first global electronic currency takes many steps, of which these sorts of "bridge" products are one.

+1

I like this guy. No bullshit approach to breaking apart FUD.

its an etf for goodness sake, they are legally obligated to obtain the bitcoins for the shares they issue else they can't issue the shares.

Its not a weird derivative, its an ETF. ETFs are normal and perfectly OK, otherwise you wouldn't even be able to trade things like volatility and futures (which actually ARE weird derivatives) like a stock.

I don't understand why people get so mad about an ETF. When you (or at least, most people) buy a computer, they don't individually pick out each component they need then build the computer. They buy the computer which comes with all the components in a easy bundle. An ETF is the exact same thing - a bundle that allows the seller to make a bit more money due to the convenience factor - except for securities not physical objects. How is that a scam?

Gee, people here are always going on about the free market except when an even mildly exotic financial instrument gets thrown into the situation they completely freak. The funny part is everybody's perfectly OK with CFDs, which actually are 'fake' or 'paper' bitcoins, but a ETF? FREAK OUT TIME.

Maybe, maybe not. As long as the papers are not inflated past their worth and work as a form of receipt for the W-twins to privately transfer their BTC to easily setup wallets... they could pull it off.

I perfectly understand what an ETF is and how it works.

It's garbage, a worthless piece of paper, one of those "financial products" or "derivatives" that add nothing meaningful to the economy.

If you hold your private keys, you are holding the real thing. You can redeem them everywhere, no matter what. Bitcoins was born to be a trust-free, decentralized system to transfer and store value, and you have no need to trust the Winkle-evils to hold on your Bitcoins. How do you know that they are not issuing more shares than Bitcoin they hold? How do you know they won't file bankruptcy? How do you know you will be able to redeem the value their pieces of paper are supposed to have? How do you know their Bitcoins will not be stolen?

You don't know, you just buy a piece of paper that represents some Bitcoins that supposedly a third party is holding for you. Wow, genius, I guess Satoshi created Bitcoin precisely because he was in deep love with these amazing "financial products" based on promises that spread so much wealth between people. How could we survive without them?

It's just another form of debt, and thus essentially a scam. Everybody should man up and hold onto the real thing and throw away that useless paper issued by some guys who have never done anything in their lives (except suing Facebook, what genius entrepreneurs they are).

That said, these could be bullish news if the retard twins succeed. A scam, but bullish for BTC exchange rate. Just do not forget that these derivative crap has messed up the whole economy. I know for sure I won't touch one of those toilet papers with a bargepole.

Also side note, this proves that bitcoin 'deflation' won't ever happen in a healthy economy. People buy the ETF, the ETF funds startups, the startups get bitcoins, boom whatever bitcoins were in the ETF appear to have doubled.

Its just the inflation will be controlled by how much demand for debt there is, and with increased demand for debt comes increased interest rates, so if you save, you will always be making a little money (due to either interest or deflation depending on the economic climate).

And how do you get bitcoins once you have your ETF shares?

This.


It took me about 2 weeks to figure out how to obtain bitcoins. And I already somewhat knew what I was doing, as I used Liberty Reserve. Imagine someone who doesn't know what an exchanger is, and has never sent a bank wire.

All this is very simple. They are going to raise a lot of money by using their BTC pile as a collateral and then they are going to use that money to fund bitcoin startups and make BTC more valuable. Pretty genious shit.

My ears perk up.

Thx. For the answers. I'm still sceptic if that makes sense, though.

Especially of this:


Hopefully not this way. That are only "paper" Bitcoins that have been stripped of their use. So if this would be the way Bitcoin goes, all it would be is a store of value/investment.

This would be enough to financially make me very happy, but the idealist in me would scream in agony.

I think if the application is accepted, it will open up BTC to institutional investors who can't risk client money on gox and other startup exchanges whose legal compliance is in question. 

I'm hoping this is the beginning of the end of gox.

Think of it this way: I have a bunch of money in my retirement account. If I take that money out of that account it gets hacked with wicked taxes. Now that they are opening this fund, I can use the money in my retirement account to invest in bitcoins. Hooray, no tax penalty!

No, this is GREAT news.

This will greatly expand the bitcoin market by allowing many more people participate in bitcoin, which is one of it's biggest problems today.

Presently, you need to be awfully computer savvy just to buy a single bitcoin.

Those 200,000 coins will be bought up very quickly. This is extremely good news for bitcoin. If bitcoin is going to survive, institutional investors need to get involved and this is finally a way they can.

Access.

Many people will never want to go through the hassle of figuring out MtGox, wiring a huge sum of funds to "Magic the Gathering Online Exchange" ( a copy then have never heard of before) on the other side of the globe, wait 3-5 days, oops Japanese holiday all service/support enters a blockhole, oops your account is locked and requires validation, please send an apostled copy of your passport (for the record I have NEVER had to send a copy of my passport to a brokerage in my life).  The vast majority of people are simply NEVER (not today, not even in their lives) going to find someone on localbitcoins, grab $1,000 in cash and go to a starbucks to meet "BitcoinRadier487" and make a trade.  It is a pipedream to think otherwise.  Most people are never going to build a mining rig or join a mining pool, etc.

That isn't to say these are "bad" methods for investing in Bitcoins but they aren't for everyone. If you have physical Bitcoins and have jumped through all the hoops this isn't for you but not everyone is you.

If someone has a brokerage account they can invest in BTC just as easily as they can buy a share in AAPL.  If someone has a 401K/IRA this would be the only possible way to invest in Bitcoins in a tax exempt manner. A hedge fund will find Bitcoin more viable if it is traded alongside thousands of other assets on NASDAQ or other major exchange and has high liquidity and depth.  

More options is always better right?

For many people acquiring and safely storing Bitcoins is really complex. Isn't that reason enough?

I still don't get it. Can someone explain me why anyone would invest in this?

The only reason such a trust makes even the slightest sense is for precious metals as they are hard to store in larger quantities. That's a problem Bitcoin doesn't have.

Why would anyone in his right mind buy these instead of buying Bitcoin directly? Unless people that have no Idea what Bitcoin is of course.


In case the reason to invest in this is obvious: This is a honest question.

How is it a scam?  Nobody is required to pay more than NAV if they do it is because they believe the asset will rise and thus the premium paid is just the cost of getting into a position now rather than waiting.  Slippage happens on exchanges is that a scam?  Price is currently $91.08 and you believe it will fall.  You can sell 100 BTC @ $91.08 but selling 500 BTC will drop the price to $90.98.  You are getting less than if you sell slowly, then again if you feel the price will fall below $90.98 before you can unload all 500 BTC @ $91.08 the premium paid for fast execution is worth it.

It would be like saying selling BTC for x on MtGox and buying it for y on BTC-E when x > y thus collecting a profit of x-y is a "scam".  It is called abritrage.  The fact that new shares can be issued or redeemed is what keeps the price inline with the underling asset.

For future reference ... just because you don't understand something doesn't make it a scam.  Many people call Bitcoin a scam using the same "logic".