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Who had that Bitcoin target price prediction?

R

r32

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crustBrother said:
Interesting statement.

SEC.gov | Out, Damned Spot! Out, I Say![1]: Statement on Omnibus Approval Order for List and Trade Bitcoin-Based Commodity-Based Trust Shares and Trust Units

Out, Damned Spot! Out, I Say! : Statement on Omnibus Approval Order for List and Trade Bitcoin-Based Commodity-Based Trust Shares and Trust Units Commissioner Hester M. Peirce January 10, 2024
www.sec.gov www.sec.gov

Looking forward to reading some of the links in the footnotes
Click to expand...
HER name is Hester???

I never got past the byline. :drowning:
 
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ghost_of_lewis_samuels

ghost_of_lewis_samuels

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r32 said:
ETFs are live and BTC going nuts this morning. 48 breached.
Click to expand...

Still confused (and haven't researched) - do the groups running the EFT's already hold all/most of the BTC that they need or do they still need to acquire
Or
Does the BTC get accumulated as people buy in to the etf?
 
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R

r32

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ghost_of_lewis_samuels said:
Still confused (and haven't researched) - do the groups running the EFT's already hold all/most of the BTC that they need or do they still need to acquire
Or
Does the BTC get accumulated as people buy in to the etf?
Click to expand...
Excellent q and I think few understand the mechanism.

First, there are a few existing ETFs that existed BEFORE all these new ones that were approved by SEC. These ETFs are from other countries. The first Bitcoin ETF was from some company in Canada, if I recall correctly.*

These early ETFs do not hold the underlying asset. Instead, the ETF issuer will buy Bitcoin futures contracts and offer a securitized version to investors in the form of an ETF. So the Issuer and a buyer of the ETF do not own any Bitcoin.

Second, these new SEC-approved ETFs will work differently.

The new ETFs will use cash creations and redemptions only. This means when new shares of the ETF need to be created, the fund issuer will use cash to purchase Bitcoin. Conversely, when shares are redeemed, the issuer will sell Bitcoin for cash. *I believe this is settled at the end of the day, but I'm not certain.

So, based on this, the ETF issuers such as ARK, BitWise, etc. are in fact buying/selling the underlying asset (BTC) every day, ongoing, as people buy/sell their ETF.
 
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ghost_of_lewis_samuels

ghost_of_lewis_samuels

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r32 said:
Excellent q and I think few understand the mechanism.

First, there are a few existing ETFs that existed BEFORE all these new ones that were approved by SEC. These ETFs are from other countries. The first Bitcoin ETF was from some company in Canada, if I recall correctly.*

These early ETFs do not hold the underlying asset. Instead, the ETF issuer will buy Bitcoin futures contracts and offer a securitized version to investors in the form of an ETF. So the Issuer and a buyer of the ETF do not own any Bitcoin.

Second, these new SEC-approved ETFs will work differently.

The new ETFs will use cash creations and redemptions only. This means when new shares of the ETF need to be created, the fund issuer will use cash to purchase Bitcoin. Conversely, when shares are redeemed, the issuer will sell Bitcoin for cash.

So, based on this, the ETF issuers such as ARK, BitWise, etc. are in fact buying/selling the underlying asset (BTC) every day, ongoing, as people buy/sell their ETF.
Click to expand...
got it - thank you for the detail
 
crustBrother

crustBrother

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r32 said:
Excellent q and I think few understand the mechanism.

First, there are a few existing ETFs that existed BEFORE all these new ones that were approved by SEC. These ETFs are from other countries. The first Bitcoin ETF was from some company in Canada, if I recall correctly.*

These early ETFs do not hold the underlying asset. Instead, the ETF issuer will buy Bitcoin futures contracts and offer a securitized version to investors in the form of an ETF. So the Issuer and a buyer of the ETF do not own any Bitcoin.

Second, these new SEC-approved ETFs will work differently.

The new ETFs will use cash creations and redemptions only. This means when new shares of the ETF need to be created, the fund issuer will use cash to purchase Bitcoin. Conversely, when shares are redeemed, the issuer will sell Bitcoin for cash.

So, based on this, the ETF issuers such as ARK, BitWise, etc. are in fact buying/selling the underlying asset (BTC) every day, ongoing, as people buy/sell their ETF.
Click to expand...
fractional reserves or are they actually buying one Bitcoin for every 48k dollars invested in the ETF at current spot?
 
R

r32

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crustBrother said:
fractional or 1:1 BTC:$ ?
Click to expand...
Never been able to find a clear answer on this.

But consider the inefficiency of the ETF issuer buying BTC on fractional value based on volume of shares constantly bought/sold every day.

Transaction fees from wherever they get BTC from would eat into profits. Considering most seem to be using Coinbase Custody, I assume they probably negotiated a lower fee for buying/selling BTC. So my guess is they probably buy/sell in bulk.
 
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bvendley

bvendley

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r32 said:
Never been able to find a clear answer on this.

But consider the inefficiency of the ETF issuer buying BTC on fractional value based on volume of shares constantly bought/sold every day.

Transaction fees from wherever they get BTC from would eat into profits. Considering most seem to be using Coinbase Custody, I assume they probably negotiated a lower fee for buying/selling BTC. So my guess is they probably buy/sell in bulk.
Click to expand...
Sounds like potential upside for bitcoin miners. I might be wrong but my understanding is that the miners ultimately settle the transactions and therefore make $ for each transaction.
That said, all the miners I track tanked today pretty hard so :shrug:
 
bird.LA

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bvendley said:
Sounds like potential upside for bitcoin miners. I might be wrong but my understanding is that the miners ultimately settle the transactions and therefore make $ for each transaction.
That said, all the miners I track tanked today pretty hard so :shrug:
Click to expand...
Not correct. Miners settle the blocks (not transactions themselves), and more transactions =/= more revenue unless users are paying high fees for those transactions.

The ETF issuers have major trading firms that they contract with to handle the process of keeping the right amount of BTC in their coffers. Probably a lot of OTC dealing that wouldn't show up as a large number of transactions on the blockchain.

Miner stocks (and COIN) tanked because people were using them as a proxy for BTC exposure within tardfi system and those dollars are now moving to ETFs.
 
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crustBrother

crustBrother

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bird.LA said:
The ETF issuers have major trading firms that they contract with to handle the process of keeping the right amount of BTC in their coffers. Probably a lot of OTC dealing that wouldn't show up as a large number of transactions on the blockchain.
Click to expand...
that's what I was thinking. relatively few additional transactions on the blockchain to support ETFs but those will be very LARGE transactions i imagine
 
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r32

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@bvendley see my guess here for where BTC might be headed. So far, it's playing out that way. But anything is possible, so keep an open mind to all possibilities.
 
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