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Spot Bitcoin ETF receives official approval from the SEC

479 pointsby talborenover 1 year ago

39 comments

pavlovover 1 year ago
My prediction is that Bitcoin will become fully institutionalized within twenty years, to the point that the “Bitcoin” held by investors are entirely disconnected from the theoretical blockchain.<p>A similar thing happened with stocks. Not so long ago they used to be physical pieces of paper. You could trade shares peer-to-peer and even anonymously by handing over the share certificate to someone in person. For dividends, there was a coupon that you could cut off with scissors and use to claim the income.<p>Imagine you show up today at a Charles Schwab office with a 1977 Apple Computer stock certificate, and ask to sell it. That piece of paper is theoretically worth more than a Bitcoin (thanks to stock splits). But the Schwab branch surely won’t buy it, they’ll send you away. Getting your piece of paper recognized as stock that you can actually trade in modern systems is a separate process.<p>That’s how it will be with Bitcoin in 2050. You contact Coinbase’s customer service AI and tell them you have an actual Bitcoin on the chain and you’d like to sell it. They’ll politely redirect you to the compliance department that will inform you that it may take up to six months to verify the provenance of your quaint original Bitcoin that’s not registered in the modern custodial systems - assuming your coin has no history with mixers and other addresses of interest to law enforcement, of course.
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wslhover 1 year ago
Actual document: <a href="https:&#x2F;&#x2F;www.sec.gov&#x2F;files&#x2F;rules&#x2F;sro&#x2F;nysearca&#x2F;2024&#x2F;34-99306.pdf" rel="nofollow">https:&#x2F;&#x2F;www.sec.gov&#x2F;files&#x2F;rules&#x2F;sro&#x2F;nysearca&#x2F;2024&#x2F;34-99306.p...</a> and archived one, just in case you receive 404: <a href="https:&#x2F;&#x2F;twitter.com&#x2F;coinfabrik&#x2F;status&#x2F;1745192170942800341" rel="nofollow">https:&#x2F;&#x2F;twitter.com&#x2F;coinfabrik&#x2F;status&#x2F;1745192170942800341</a>
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benlivengoodover 1 year ago
Finally a workaround for high transaction fees!<p>This should also solve the scalability issues quite a bit by reducing the need to record as many transactions in the first place once the exchanges hold most of the coins.<p>Finally this should reduce the long-term potential in mining as the block reward keeps reducing exponentially with lower expectations of transaction fees.<p>Sometimes regulatory solutions do fix hard technical problems.
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MuffinFlavoredover 1 year ago
Looks like these are the 11 tickers?<p>Bitwise (BITB)<p>ARK Invest&#x2F;21Shares (ARKB)<p>Invesco Galaxy Bitcoin ETF (BTCO)<p>iShares Bitcoin Trust (IBIT)<p>VanEck Bitcoin Trust (HODL)<p>Franklin Bitcoin ETF (EZBC)<p>Fidelity Wise Origin Bitcoin Trust (FBTC)<p>WisdomTree Bitcoin Trust (BTCW)<p>Valkyrie Bitcoin Fund (BRRR)<p>Hashdex Bitcoin Futures ETF (DEFI)<p>Grayscale Bitcoin Trust (GBTC)
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hackernudesover 1 year ago
The only thing I am concerned about is &quot;paper bitcoin&quot; and rehypothecation. Is there anything published about how ETF entities might prove they have custody of the amount of bitcoin they claim (in other words, proof of reserves)?
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bluecalmover 1 year ago
Is there any guarantee that if this goes wrong (let&#x27;s say ETF&#x27;s are hacked and lose their BTC) then assets in other ETF&#x27;s are safe? Let&#x27;s say BlackRock ends up on the hook for billions after their BTC ETF goes wrong. Are my shares in iShares NASDAQ 100 ETF safe?<p>I want to make sure I don&#x27;t have any exposure to crypto world by owning stock ETFs. If there is any scenario that I am on the hook for crypto nonsense going south I am going to sell and just own selected stocks instead. I would greatly appreciate someone providing clarity on this issue.
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helsinkiandrewover 1 year ago
I can&#x27;t help thinking that Bitcoin ETFs could mark &quot;Peak Bitcoin&quot;. When lots of people are trading it at their high street broker in their regular account, Bitcoin becomes just a number in a box - a crypto currency without crypto - with nothing underlying it.
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schemescapeover 1 year ago
In the hypothetical case that a Bitcoin ETF gets hacked and its wallet(s) emptied, what happens? Is it any different from, say, a gold ETF having its physical gold stolen?
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peter_d_shermanover 1 year ago
&gt;&quot;The historic approval paves the way for the first regulated exchange-traded product in the U.S. to give investors direct exposure to the price of Bitcoin without requiring them to buy it or worry about self-custody. Investors will buy shares in <i>ETFs holding Bitcoin as its underlying asset</i>.&quot;<p>Interesting!<p>Looks like we&#x27;ve paved the way for <i>yet another abstracted financial instrument</i> -- which sits on top of <i>yet another abstracted financial instrument</i>...<p>My only question, at this point in time, were I to have one, would be something like the following:<p><i>What&#x27;s the maximum levels of financial abstraction -- that can be stacked on top of one another?</i><p>?<p>???<p>Related:<p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Financial_instrument" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Financial_instrument</a><p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Abstraction" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Abstraction</a><p><a href="https:&#x2F;&#x2F;www.joelonsoftware.com&#x2F;2002&#x2F;11&#x2F;11&#x2F;the-law-of-leaky-abstractions&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.joelonsoftware.com&#x2F;2002&#x2F;11&#x2F;11&#x2F;the-law-of-leaky-a...</a><p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Abstraction_(linguistics)" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Abstraction_(linguistics)</a><p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Tower_of_Babel" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Tower_of_Babel</a><p><a href="https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=LFrdqQZ8FFc" rel="nofollow">https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=LFrdqQZ8FFc</a>
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monero-xmrover 1 year ago
The death of crypto was written endlessly on HN. The investor activity is much more bullish over last 6 months. I think the only hot VC right now in all of tech is AI and blockchain.<p>Now a lot of people here will be investing in Bitcoin without even knowing it, as their passive fund investments begin accumulating. The sweet victory against the no coiners.
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tnel77over 1 year ago
I’m only here to see the acrobats continuing to claim Bitcoin is a fraud, only for criminals, and “going to die any day now.” Have a nice day everyone! What an awesome achievement for the crypto community!
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DeathArrowover 1 year ago
So bitcoin became something like money and stocks, just a number in a SQL database? And we can now finally make bitcoins out of thin air?<p>How long before the amount of bitcoins traded by hedge funds will be larger than the amount of bitcoins that exist in the actual bitcoin network?
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miohtamaover 1 year ago
For the Gary Genler&#x27;s comment (and the opinion of a lot of commenters on Hacker News):<p>&gt; Though we’re merit neutral, I’d note that the underlying assets in the metals ETPs have consumer and industrial uses, while in contrast bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware,[4] money laundering,[5] sanction evasion,[6] and terrorist financing.[7]<p>You can find how this was addressed in the approval:<p>&gt; See, e.g., Kling Letter (stating that the bitcoin futures price is beholden to the spot price, and the spot price has always been, and continues to be, manipulated by bad actors); Better Markets Letter I at 2 and 4-9 and Better Markets Letter II at 4-6 (stating that spot bitcoin ETPs are extremely vulnerable to manipulation by bad actors because spot bitcoin markets (1) have a history of artificially inflated trading volumes due to rampant manipulation and wash trading, (2) are highly concentrated, and (3) rely on a select group of individuals and entities to maintain the bitcoin network); Letter from John Palmer, dated Aug. 11, 2023, regarding SR-CboeBZX-2023-028 (stating that 75% of the bitcoin in circulation is controlled by a small minority who use market makers to pump and dump); Daniel Smith Letter (“[t]he history of crypto is a never-ending history of frauds and scams”); Letter from Billy Jensen, dated Sept. 5, 2023, regarding SR- CboeBZX-2023-028 (stating that bitcoin is a digital Ponzi, and that approving a spot ETF “will bring greater unsuspecting fools into the pyramid scheme”); Letter from The Registered Principal, dated Aug. 9, 2023, regarding SR-CboeBZX-2023-038, SR-CboeBZX-2023-040, SR-CboeBZX-2023-042, SR- CboeBZX-2023-044, SR-NASDAQ-2023-016, SR-NASDAQ-2023-019, and SR-NYSEARCA-2023-44 (“[t]here are no verifiable entities or persons as points of ultimate origin of [b]itcoin which makes it very likely to be a major fraud operation”); Letter from Joseph, dated July 18, 2023, regarding SR-CboeBZX- 2023-044 (“[a] cartel of organized crime and money-launders [sic] actively manipulate the price of [b]itcoin through the use of Tether and other crypto-ponzi schemes”); Letter from Avinash Shenoy, dated Oct. 18, 2023, regarding SR-NASDAQ-2023-016 (stating that manipulation in the bitcoin marketplace has not gone away); Letter from Winston Wood, dated Oct. 19, 2023, regarding SR-NASDAQ-2023-016 (stating that the bitcoin market is manipulated and has a history rife with scams and criminal activity); Letter from Greg Steven, dated Oct. 19, 2023, regarding SR-NASDAQ-2023-016 (“Steven Letter”) (stating that bitcoin is wash traded on platforms outside of U.S. jurisdiction); Letter from Neil Fulton, dated Oct. 20, 2023, regarding SR-NASDAQ-2023-016 (recommending that spot bitcoin ETPs be disapproved until bitcoin wash trading is minimized); Letters from Micah Warren, Associate Professor of Mathematics, University of Oregon, dated Oct. 27, 2023, regarding SR-NASDAQ-2023-016, and dated Dec. 15, 2023, regarding SR-CboeBZX-2023-072 (“Warren Letters”) (explaining how the bitcoin ledger, which is maintained by for-profit mining entities, could become significantly less diverse and less costly to manipulate). Some commenters also assert that the bitcoin asset itself is a manipulation or fraud. One commenter states that “the complete lack of knowledge of who the operators of the bitcoin network are means that it is impossible to implement sufficient control measures to ensure a fair market that is free from manipulation of both token trades, actions of the operators, or even the fundamental properties of the asset itself.” See Letter from Brandon B., dated Oct. 25, 2023, regarding SR-NASDAQ-2023-016 (“Brandon Letter”), at 4. Another commenter asserts that the questions the Commission has been asking about fraud and manipulation are misguided because “they are predicated on the idea that [b]itcoin is something legitimate which could possibly serve the public interest.” This commenter claims that “[b]itcoin is, and has always been, a form of investment fraud” that should be banned, not regulated. See Letter from Sal<p>&gt; Commission acknowledges these concerns. Pursuant to Section 19(b)(2) of the Exchange Act, however, the Commission must approve a proposed rule change filed by a national securities exchange if it finds that the proposed rule change is consistent with the applicable requirements of the Exchange Act.61 For the reasons described above, the Commission finds that the Proposals satisfy the requirements of the Exchange Act, including the requirement in Section 6(b)(5)62 that the Exchanges’ rules be designed to “prevent fraudulent and manipulative acts and practices.”
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rahmansahinler1over 1 year ago
There is something I&#x27;m not sure of about new topics. Bitcoin makes it&#x27;s value mostly it&#x27;s aspect of being decentralized. I think new approves does not increase original bitcoin value. Maybe the big guys wants to create another hype loop that will gather people&#x27;s money.
yieldcrvover 1 year ago
all it took was a judge declaring the SEC’s prior view toward bitcoin ETFs to be arbitrary and capricious<p>and the SEC thinking about appealing but realizing this absolutely based SCOTUS would delete the SEC like Thanos if they ever get taken beyond circuit appeals court by the private sector<p>markets win
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olalondeover 1 year ago
This is good for Bitcoin.
xur17over 1 year ago
I found this site pretty useful for comparing the different ETF tickers: <a href="https:&#x2F;&#x2F;www.btcpricetool.com&#x2F;etf.html" rel="nofollow">https:&#x2F;&#x2F;www.btcpricetool.com&#x2F;etf.html</a>
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jcuenodover 1 year ago
For real this time?
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ent1tyover 1 year ago
With quantum computing growing rapidly, aren&#x27;t all blockchains in danger of being decrypted and drained in the future?
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jbverschoorover 1 year ago
Interestingly, the SEC and Gary did not publish any tweet or press release..
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hn_throwaway_99over 1 year ago
The fact that Spot Bitcoin ETFs were ever contemplated into existence just shows the general insanity of crypto. After all, if you believe that cryptocurrencies, with &quot;the code is the law&quot; ethos and non-reputable transactions, are the wave of the future, just transact in BTC directly. If you believe crypto is actually too risky to manage individually (e.g. hacked&#x2F;stolen keys) then you&#x27;d want the benefit of something like an ETF to manage your ownership. But buying an ETF that itself just holds crypto assets is either an exercise in futility or a &quot;worst of all worlds&quot; situation. But I guess a middle man needs to make a buck somehow...
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jrmgover 1 year ago
What’s the difference between this and e.g. GBTC?
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bb88over 1 year ago
So here&#x27;s a question I don&#x27;t know off hand:<p>Can someone short bitcoin with this ETF?
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Marazanover 1 year ago
An astonishing poor decision from the SEC.
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hospitalJailover 1 year ago
Pretty much endgame level for Bitcoin.
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Devastaover 1 year ago
A fantastically incompetent decision, just unbelievable.
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david_shiover 1 year ago
Bitcoin exists to solve the principal-agent problem that comes with delegating control of the money supply to singular institutions.<p>If you look at the history of empires, from the Romans to the Han, it is littered with instances of societal decline as a direct result of inflation and overspending. This unilateral currency debasement is much harder if the collective (and global) definition of money is determined by distributed networks of computers.<p>Maybe Bitcoin itself isn&#x27;t the final form, but the fact that distributed systems and cryptography tech is out there means the cat is out of the bag.<p>Even if your view on the crypto industry is negative, it&#x27;s important to take some time to understand why millions of people around the world are involved in it. It&#x27;s not only because of the appeal of ponzi schemes.
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dcolkittover 1 year ago
I think it&#x27;s easy to be cynical. But one major reason I&#x27;m a believer in decentralized consensus is because I think it can make the silo&#x27;d financial systems of the world as seamlessly interoperable as the Internet made the silo&#x27;d telecommunication systems of the world.<p>It feels a lot like when AOL first started supporting email in 1993. It&#x27;s easy to dismiss AOL and Nasdaq as highly centralized systems that don&#x27;t align with the ethos of decentralization. But the other way to look at it is a previously maximally centralized system is interfacing with a decentralized one in a way that gives the users of the former slightly more freedom and the latter wider user base and legitimacy.
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cs702over 1 year ago
The Bitcoin network has survived everything that has been thrown at it.<p>Nothing has stopped the damn thing. It&#x27;s always there.<p>It&#x27;s one of those things that just keeps on existing, like gold.<p>It doesn&#x27;t care what you think. It doesn&#x27;t care whether you like it or not. It doesn&#x27;t care if you understand it. It&#x27;s just always been there.<p>Might as well make it easier for people and companies to own it and trade Bitcoin, and for governments to tax profits on it.
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Octokiddieover 1 year ago
The strong anti-Bitcoin sentiment on HN is still amusing. It goes way back - 13 years or more.<p>Having read many of these negative comments, I think part of this sentiment boils down to the commenter seeing no point to Bitcoin. Just this thread has examples. It must be more than a little annoying to feel very strongly that Bitcoin is pointless, but to also notice that it&#x27;s still here. Year after year.<p>If that shoe were on my foot, in addition to being annoyed I&#x27;d be curious about what I was missing.<p>Bitcoin doesn&#x27;t have to do something useful for everyone to survive. It doesn&#x27;t have to &quot;replace fiat.&quot; It doesn&#x27;t have to be a payment system. It doesn&#x27;t have to &quot;go to the moon.&quot; It doesn&#x27;t even need an ETF. Bitcoin just needs to fill needs (or wants) not met by anything else. They don&#x27;t even have to be your needs or wants.<p>Unlike every other attempt at electronic cash that came before it, Bitcoin also doesn&#x27;t need the approval of any person, police force, legislative body, military, or government. I&#x27;d challenge people who hold negative views on Bitcoin to name some other systems for which this holds true.<p>I think that&#x27;s the point that a lot of hostile commenters might be missing.
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Timber-6539over 1 year ago
No Bitcoin, you were meant to destroy them. Not give them an extra avenue to make profits.
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sega_saiover 1 year ago
I wonder what happens when an unregulated market that can be easily manipulated is connected to a &#x27;normal&#x27; stock exchange through instruments like Bitcoin ETF.
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fancyfredbotover 1 year ago
Satoshi&#x27;s dream of a decentralised ledger finally reaches its ultimate form of a centralised list maintained by the DTC. Rejoice!
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democracyover 1 year ago
Because blockchain, bitcoin and cryptography! You just don&#x27;t lose money with bitcoin. It&#x27;s mathematically impossible. Even if you lose money with bitcoin - it&#x27;s good for bitcoin. It&#x27;s free currency. Democracy. Bank the unbanked.
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superfunnyover 1 year ago
Bitcoin makes pets.com look like Berkshire Hathaway
boeingUH60over 1 year ago
As my Dad told me, anyone investing in crypto is a fool looking to take advantage of another fool. It’s all Greater Fool Theory.
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dpflanover 1 year ago
What other products that are as known-to-be-risky-and-associated-with-fraud are backed by an ETF? Genuinely curious what else is out there...
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moose_manover 1 year ago
This is so sad. Crypto (including Bitcoin) serves as a money funnel while takes from economically insecure middle class retail investors and pours it into the pockets of the tremendously wealthy.
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rastafarigpuover 1 year ago
Irony of the millenium! Wasn&#x27;t Bitcoin supposed to &quot;free&quot; us from the banks, &quot;speculative&quot; finanacial institutions and centralised control? Guess human greed trumps everything!
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