I am not sure if this is con crypto, or is "just" con moving money abroad. At the end, does not matter, we need to self-custody.
Discussion
It’s so easy to do, yet so hard to convince people to do.
I think one big barrier is responsibility. It requires absolute responsibility.
If your wallet is hacked, it is hacked forever. You can't ask someone to help... You are either fast, or you lost all. Also if you lose the keys, you are lost again.
Those people should just probably hold the ETF.
Maybe. I heard in the Bitcoin Dad podcast an interesting thought, that by enabling the BTC etf now, would allow money to flow out of current system in some way, and could cause a lot of people getting rekt. So might not be the best decision. Somehow I see some potiential bad scenarios for it.
Not sure I follow. Why would they get rekt? Can you give me the gist of it?
The latest request by the SEC to make the ETFs a “cash creation” would make the ETF hold cash instead of the actual bitcoin for the customer and if the don’t have to show proof of reserves, they can suppress the price (ex. Blackrock holds the cash and buys/holds at Coinbase). Could be insolvent if bitcoin rips and they don’t have enough bitcoin for customer withdrawals (if allowed).
Yuck. 🤢
Mainly this 👆 I didn't know about the "cash holding" though.
But at the end, it's a custodian, and they might not store the "bought" amount of btc, and when people want to take out, they won't be able to service it. I guess you won't be able to self-custody from this any way. You will only be able to sell your asset, but if it turns out they have less btc, the etf price will drop, and you lose.
Not an expert on this but I've seen a couple of explanations of what a "Cash Create" means, and this is the sort of thing I see:
My understanding is the existing Spot ETFs in Canada (which we've had a couple of years now) use Cash Creates and they've always tracked the BTC price well.