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105 sats \ 2 replies \ @_vnprc 29 May \ on: People who buy spot BTC ETFs - tribemates or not? alter_native
They are buying price exposure. It's a start. Some fraction of those folks will get curious and buy real bitcoin and withdraw to self custody. Our job is not to look down on these folks, it is to educate them. When you notice one of these people asking the right questions you should feed their curiosity. Guide them to the rabbit hole.
The ETFs are a natural vehicle for orange pilling people. You just need to apply the right strategy. It's safe to assume ETF purchasers are primarily interested in price appreciation. Use this knowledge. The SEC prohibited in-kind redemption for the bitcoin ETFs. So ETF owners are forced to convert into dollars when they sell. This is a taxable event, which is not a coincidence. The Wall Street alliance made sure to change the rules so the gov can get their pound of flesh. Use this fact to drive home the importance of self-custody.
Once they understand the tax benefits of self custody you can start to explain the macro game theory. Speculative attacks on the dollar will continue to ramp up and the government will get more desperate as the dollar continues to depeg from everything and inflate to the stratosphere. The feds will start closing onramps and forcing more and more people into captured vehicles like the ETFs. At first they will justify it with tax collection. Eventually the ETFs will get rugged. Feds will seize the underlying bitcoin and hand out receipts that can be devalued at will. Exactly like they did 100 years ago with EO 6102.
Our job is to blackpill as many ETF owners as possible. Convince them to buy real bitcoin while they still can. Otherwise they'll get caught with their pants down when the tide goes out. How embarrassing!
Thank you for projecting into the future and penning such a well-thought-out comment that covers the various effects. Much food for thought
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Thanks for asking a great question!
After thinking about it for a day or two I think it is exceedingly unlikely the government will overtly seize the bitcoin backing the ETFs. At least not right away. First they will deputize Blackrock and whoever else into issuing paper bitcoin instruments. Due to the absolute size of these wallets this will have a serious negative impact on the spot price of real bitcoin. At least for a while. Just like fiat currency manipulation, this will drive a black market price for bitcoin that exceeds the official sanctioned price. This scenario could continue for an extended period. The long game is the same, however. Eventually the USA will need a bitcoin treasury and these honeypots are simply too big to ignore. We all need to prepare accordingly, especially the ETF share owners.