So now you can buy bitboin without actually buying bitcoin... wow. Expose yourself to all the volatility, all the harsh swings and market manipulation by crypto whales, all while owning none of the currency. Sounds awful.
Custody is a spectrum, self custody is more towards cyber punk than white collar. People clearly want these assets and I predict the Bitcoin etf, when finally launched, will have the largest opening volume of any etf ever.
Every few years I hear about a bitcoin ETF and it seems like even worse of a scam than holding cryptocurrency directly.
Clearly I’m too dumb (or too smart?) to understand how an ETF can tie itself to the value of bitcoin without also including a freely available redemption mechanism. Does it? If the value of my shares is equal to 1BTC (or whatever other cash out threshold), will they send Bitcoin to an address I specify? Is the ETF fully backed by bitcoin in a publicly auditable fashion?
These APs are chosen carefully, and have the express job of creating liquidity. They make their money on arbitrage, thus keeping the ETF price closely matched to that of the underlying.
> An investment in Shares is: Backed by bitcoin held by the Bitcoin Custodian on behalf of the Trust.
> Baskets may be created or redeemed only by Authorized Participants. Each Authorized Participant must be a registered broker-dealer, a participant in DTC, have entered into an agreement with the Sponsor and the Trustee (the “Authorized Participant Agreement”) and be in a position to transfer bitcoin to, and take delivery of bitcoin from, the Bitcoin Custodian through one or more accounts. The Authorized Participant Agreement provides the procedures for the creation and redemption of Baskets and for the delivery of bitcoin in connection with such creations or redemptions. A list of the current Authorized Participants can be obtained from the Trustee or the Sponsor.
This is all very standard and no more or less of a scam than other ETFs.
In the case of the BlackRock ETF it’s in the application. “Baskets may be created or redeemed only by Authorized Participants who pay BlackRock Investments, LLC”.
No you can’t personally physically redeem the Bitcoin yourself. That’s not the purpose and use of this ETF.
https://www.investor.gov/introduction-investing/investing-ba...
I think there's no buying X involved with an index ETF over X, in general, and I believe they are talking about an index etf here. (Of course, it still is some sort of gamble to trade in an index ETF.)