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Comment by maxioatic | Hacker News Reader

But then I have to pay taxes on it.

Time to full send my retirement accounts into these ETFs so I can retire early. /s

Actually though I might consider allocating a tiny percentage (1-3%) to these. Seems like fairly low risk with enough upside, but who knows.

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These are cash creates not in kind creates. So there is no escaping taxes. You will be paying capital gains just by holding spot Bitcoin ETFs

Edit: after further research it appears that the cash create mechanism doesn't cause a tax event for shareholders as it does with mutual funds. See https://www.grayscale.com/blog/legal-topics/addressing-poten...

We will have to see how every Bitcoin ETF is structured. YMMV depending on this structure and how you get taxed.

I think the parent is talking about buying the ETF inside a tax sheltered account.

Indeed I was, thanks for clarifying.

Ok. Not a terrible idea to be in high growth/high return assets in qualified accounts.

What do you mean? self-custodying BTC is still unrealized gains until you sell, so no tax either.

BTC ETF in in a 401K/IRA can be contributed, grow, or possibly be withdrawn tax-free depending on how you set it up. Coinbase reports your gains and you owe taxes on them. (Don't think Coinbase has an IRA/401K option for custody. Yet.)

I was referring to the capital gains tax you pay for selling BTC on an exchange. I was thinking specifically about Roth IRAs, where any gains are tax free, but a 401k or similar would work too.

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