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80 sats \ 6 replies \ @79c9095526 29 Aug \ on: Bitcoin: Boring Times Will End econ
Agreed, we are pretty close to on track to where historical cycles say "we should be".
My one concern this cycle is if the ETFs decide to fractionally reserve bitcoin and essentially issue 'fake' bitcoin. That could be a way to absorb a large amount of demand without having any effect on the limited supply of bitcoin. We saw FTX do this and absorb iirc ~1 million btc worth of demand without actually buying/holding that bitcoin. It is illegal for the ETFs to do so, but I also don't think anyone who follows gold believes the gold ETFs actually hold the gold they are legally obligated to hold based on the number of shares they have issued. Not to mention the countless times the big boys (JP Morgan, etc...) have been caught spoofing the price of precious metals markets.
Unfortunately, similar to gold ETFs, very few people (if anyone) can actually demand redemption of their paper IOU bitcoin certificates for real bitcoin. Not to mention none of the ETF providers AFAIK have proof of reserves so who knows what they hold.
With all of that said, I'm bullish and look forward to seeing where this next bull cycle takes us!
"very few people (if anyone) can actually demand redemption of their paper IOU bitcoin certificates for real bitcoin."
sell ETF, transfer to trad bitcoin exchange, buy bitcoin, withdraw to cold wallet.
This can be done in a week, even large quantities.
Much easier than with gold in the GLD etf.
So I don't think we're apples to apples with this comparison.
Invest Accordingly :)
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Yes, and what you describe can also be done with gold ETFs and while it sounds nice, in practice it does not happen.
Large investment firms, RIAs, sovereign wealth funds, pension funds and the like often cannot hold a physical commodity (per their own rules) or do not want to do so even if they legally could. They purchase into these ETFs and cannot/will not/do not redeem to purchase underlying.
But yes, it is easier for a pleb like you and me to do this with the ETF, but I imagine we already hold real bitcoin and not ETFs in any meaningful qty. For example, the Wisconsin Pension Fund that holds over $160M in bitcoin ETFs is not going to be holding spot bitcoin anytime soon :)
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Fair enough. I think a quote from Jameson Lopp is probably applicable here as well:
"Unless you're a professional trader, you're likely wasting your time looking at the BTC price chart, trying to understand it.
In 2013 everyone thought bitcoin was mooning due to the Cyprus crisis. Years later we learned it was Wences orange pilling his Silicon Valley buddies."