The Bitcoin ETF – Dare I Say, “It’s a Trap?”

Posted by freedomforall 11 months, 2 weeks ago to Business
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"So Tuesday October 19th, 2021 was supposed to be the day that changed everything for bitcoin.

And it may, just not in ways anyone bullish on crypto should be comfortable with.

Finally the SEC approved a Bitcoin ETF, the ProShares Bitcoin Futures ETF (BITO) began trading this week to great fanfare in the cryptocurrency community. There was much rejoicing as Bitcoin hit a new all-time high which it has since given back.

On the heels of that announcement Valkyrie changed the proposed ticker symbol for its Bitcoin Strategies ETF, another futures-based product, to BTFD. Gotta love the cheek, there.

And while that’s all well and good, I have to tell you that I have sincere reservations about popping the virtual champagne here.

Because I’ve seen this story before… in gold and silver.

I remember those heady days when all the gold bugs thought an ETF would be just the thing to solve the ‘liquidity’ problem gold had. At the time they didn’t want to hear that this lack of liquidity was one of those good problems gold and silver had.

Once people dug into the prospectus of the proposed SPDR Gold ETF, which has since then changed its name to SPDR Gold Shares ETF, they found that GLD didn’t have to hold physical gold of any particular quality. They could hold the dreaded ‘paper gold.’

That was the key to these funds being just another layer of the Matrix."
SOURCE URL: https://tomluongo.me/2021/10/22/bitcoin-etf-dare-i-say-trap/

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  • Posted by mhubb 11 months, 2 weeks ago
    holding paper gold is just stupid

    seems people have no clue about history and the Dutch Tulip bust, where people owned tulips that did not exist

    and bitcoin is more of the same
    in all fashions
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    • Posted by $ AJAshinoff 11 months, 2 weeks ago
      When paper was a promissory note it had value. When gold was removed from the Dollar it only retain(s) value because of the institutions guaranteeing those notes. Frankly, if we had to back the dollar by anything I'd say do it with agriculture.

      Crypto is all, entirely, opinion driven. Eg. Mush devised to invest and the emotional reaction is a for dogecoin to go skyrocketing. What did Musk do? Nothing but lay actual money down to create a euphoric wave.

      As I've said before, you can always wipe your ass, blow your nose, or compost your paper money. You can always find use for metals so coins have use(value) as well.

      You won't be able to do a thing when popular culture decides your cyrpto currency isn't trendy enough or not backed by the right people and becomes worthless or some unknown entity or country determines you have no access to your "funds". Why? Because it can be done and its out of your ability to control and crypto currency was never was anything to begin with.
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  • Posted by Rlee 11 months, 2 weeks ago
    I'm not getting Bit by any blah blah. Pay in gold by weight, lead by the cartridge it is in, or alcohol by % and volume in USA gallons. Thank you.
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  • Posted by CaptainKirk 11 months, 2 weeks ago
    Yes, the challenge is COMPLETELY supply/demand...

    The blockchain does not have an incredible amount that is liquid. So, they can't track to the actual blockchain without RUNNING prices through the roof.

    So, as always, they seek to CONTROL/MANIPULATE/PROFIT from the situation.

    First, an ETF that can buy more/less BTC at the end of the day, or in future days... NOT great.

    Second, one that tracks the futures... Well, they have enough idea on how the futures trade, and enough ability to "borrow" BTC, so they can do a carry trade (Long the BTC, short the FUTURE at a 20% premium. Locks in a 20% profit. Not a bad month or two)....

    And then an ETF that tracks to the futures lets these guys do Arbitrage, and make the markets more efficient.

    All of this is actually GOOD for BTC. Because it normalizes it. It removes the FUD.

    Do I recommend 100% of your assets be digital? NOPE. But when you can put your USD into USDC and collect 8% APY on your holdings, and treat it like a CD... You are crazy to not have SOME exposure to this asset class.

    I am HEAVILY invested. But I have ALL the important physical metals (Gold, Silver, Lead, Brass)...

    Let's just say, I am collecting more interest returns EVERY WEEK than I can get in a YEAR of CD interest!

    Ayn Rand would probably see BTC as collectivists worse nightmare. A currency they cannot debase/control.
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    • Posted by 11 months, 2 weeks ago
      Any comment on this, Capn?
      "Tether Ltd paid a $41 million penalty after the Commodity Futures Trading Commission found the company had falsely claimed it had adequate dollars in reserve to back its tokens (following an $18.5 million settlement paid in February to the New York attorney general’s office over a similar probe."
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      • Posted by CaptainKirk 11 months, 2 weeks ago
        Certainly. be careful.
        While I believe in Crypto and in BTC (it is coming, it's being adopted FASTER than the internet),
        I will stand here and TELL YOU to be CAREFUL. Not every coin is worth anything (DOGE/SHIBA are shit coins, IMO).
        These are the penny stocks of the stock world.

        Next up, I own USDC, the other big name is USDT. These are called Stable Coins. They reflect the $1 price of a USD (non coin).
        They make up the MAJORITY of transactions because they are the OTHER HALF (of a Trading Pair). So, if you want to buy BTC
        You have to pay in another digital currency on a swap. These make it easy, because they LOCK in the USD amount,
        and the transaction fees are much lower.

        They are supposed to be RISK FREE. Meaning the companies that create them are supposed to hold enough dollars in Treasuries, etc to aavoid the risks the banks have.

        It APPEARS that Tether decided to use the banks tricks on leverage to game return on the holdings. They LIED.
        They SHOULD be punished for the lying.

        But bear in mind, that the banks and the SEC are SCARED SHITLESS over the coins.
        Every dollar that ends up in BTC from a bank account is de-leveraging the dollar, it is rapidly shrinking the M3 Money supply.
        It is deflationary to the dollar. And we KNOW the banksters HATE deflation!

        But letting this stop you from considering Blockchain... Is like letting "Banks Busted Manipulating LIBOR" stop you from buying a home with a mortgage.

        I am not saying we should overlook these things. Do your own work. Carry the risk you don't mind carrying.
        But just remember, months before Lehnmans blew up. They PASSED AN AUDIT. We were TOLD there was NO SYSTEMIC RISK.
        By the same people going after these companies/tokens.

        As a NEW industry. There are going to be bumps against the walls/rules. What is the definition of "adequate", are they required to use FASB rules that the banks no longer use? When you know the complexity of what these guys are doing, and you know that the
        Very companies they threaten are STEEPED in lawyers and own the regulators... You EXPECT some of this.

        And watch how XRP and others are HIRING ex-Fed/Govt/Banking Heads to shore up their positions.
        Gotta have some pull... Even in a new industry... Apparently...
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        • Posted by 11 months, 2 weeks ago
          The biggest issue that I perceive is that the banking cartel owns the house and if you try to play there you must be prostituted to their house rules. At some point the house will expel the new players, probably when the cartel can convince enough participants that the new system can't be trusted - after the cartel creates a disaster. This is the biggest risk, imo, and I haven't enough information to judge the extent of that risk.
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          • Posted by CaptainKirk 11 months, 2 weeks ago
            Oh, it will be a fight to the death. To be certain.

            whereas NOBODY my age knew the Federal Reserve was a PRIVATE company, growing up...
            My daughter and her friends KNOW.

            The problem with the destruction of American Values, as they are doing, is that the destruction in TRUST comes along FREE for the ride. My daughter is far more likely to be in Crypto, and is accustomed to paying with Zelle, and VenMo, etc. Than she is with CASH. We have to force her to keep some CASH on hand... (Kids these days, LMAO).

            Yes, the banking industry is going to take their pound of flesh. But there is no longer a reason for a neighborhood bank. We have them on EVERY CORNER in Florida, competing with Drug Stores.
            They will go the way of the Gas Stations on every corner.

            And the banks are going to have to wade into this pool, and figure out how THEY make money without raping people in fees. Because the competition is real.

            I truly believe this will be the currency of the future. I can send THOUSANDS of dollars to my team in Russia for pennies (depending on which coin I pay with). And they have it in near-real-time. They know it was sent in real-time. Versus the banking system that takes a FEE from me, and FEE and a PERCENT from them!

            So, currently coins are OUTSIDE the banking control. And you are witnessing the fight between banking/securities.
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  • Posted by Vlad_ben_Avorham 10 months, 4 weeks ago
    Of course, it is a trap. They just figured out how to counterfeit BTC. Oh, I know "Legally" that isn't the term, but for practical purposes it is. They can now use fiat money, the supply of which they control completely and arbitrarily, to manipulate what was supposed to be a finite resource like BTC.

    I won't say "game over" but now it will become manipulated, much as the gold and silver markets are.
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