Replying to Avatar LN+

SEC said the #bitcoinETF needs to be “cash creates”, not “in-kind”.

This means folks use cash to buy the ETF shares, then the ETFs buy bitcoin. In-kind would allow swapping bitcoin directly for ETF shares.

Cash creates has higher costs, tax impacts, and creates more volatility.

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Eluc 2y ago

Isn't it the opposite? You can redeem your shares of the ETF directly in BTC?

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LN+ 2y ago

I believe not. It’s going to be like this:

Cash > ETF > Bitcoin > ETF > Cash

You can’t get Bitcoin directly only cash out of the ETF.

This is basically to ensure there is demand for $ as a transitionary medium, in my opinion. It’s to reduce the perceived value of Bitcoin, because theoretically we could do without cash.

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StackSats.IO 2y ago

The old petrodollar idea reimagined for Bitcoin.

People will soon realise they don’t need dollar lubrication anymore when they’re charged fees for something they could take self-custody of for free.