Dec 29, · Indeed, a physically backed bitcoin ETF is up and running in Germany, thanks to different regulatory thinking, according to Hector McNeil, . Dec 31, · The bitcoin exchange traded fund story still has life, although the Securities and Exchange Commission (SEC) keeps rejecting the idea. That . Dec 16, · The Grayscale Bitcoin Trust is intended to fill that gap until the SEC actually approves a bitcoin-based ETF. It's a way for people to get exposure to bitcoin without actually having to buy it. It Author: Matthew Frankel, CFP.
Bitcoin trust etfWill VanEck's 'Bitcoin Trust' Become the First Bitcoin ETF? | ETF Trends
Maybe the demand for shares of that fund are higher than the value simply because, like you said, people feel like it's an easier way to actually get hold of the underlying asset without having to actually own the asset.
Most people can't really necessarily got there and buy bitcoin without knowing a thing or two. Frankel: Yeah. I mean, if you look at the ETFs that own gold, for example, they have management fees because it costs money to store, secure things like that. Frankel: They generally trade at somewhat of a premium to the value of the gold that they own. It's just the costs are kind of, in my mind, outrageous for the Grayscale Bitcoin Trust.
Moser: What's the cost for storing? I mean, I understand the cost involved with hunting for bitcoin, the cost involved for mining for bitcoin.
But what's the costs for storing it? Isn't that just memory? Frankel: There's a lot of cybersecurity measures that need to be taken, a lot of equipment that needs to be bought. If you want to keep your bitcoin in cold storage, meaning offline storage, you need somewhere to actually do that.
I mean, it's not giant cost, but you need computing equipment. If you're holding billions of dollars in bitcoin, you need some of the best cybersecurity operations in the world helping out with that. Frankel: Because you don't want that hacked and lost. You don't want that to happen. There's security costs. Like storing gold, you have to pay for the vault to keep it in and stuff like that. I mean, there are costs associated with it. It's not two percent, and that's why they make a profit.
But there is some cost to actually storing and keeping gold. However, some market observers believe that outcomes will be different this time. The idea of decentralized currencies goes far beyond bitcoin and Ethereum. Today, all kinds of companies, organizations, and governments are exploring the concept of initial coin offerings, or ICOs. Businesses and currencies exist for roughly the same purpose: to facilitate the exchange of value. A bitcoin ETF is seen as the holy grail for bitcoin as an asset class by many investors.
The ease of purchasing a bitcoin ETF would expose the asset class to several new types of investors with deep pockets that were previously not able to invest in bitcoin, such as mutual funds and pension funds, for example. The approval of a publicly traded bitcoin ETF would also very likely boost the price of bitcoin to new highs as the above-mentioned institutional investors, as well as private investors who are not very versed in technology, would now be able to freely invest in the digital currency through the ETF.
In fact, that is what happened in the early s when the ETF market opened up gold investing to private investors and the price of gold subsequently experienced a tremendous rally that peaked in A similar scenario would be expected to happen to bitcoin, where new highs, well above its most recent all-time high, would be highly likely.
This would especially be the case if mutual funds, pension funds, and private banks would jump onto the bitcoin investing bandwagon. Given the strong demand for the high returns that bitcoin could potentially offer, this would be likely. This is the case not only because a major U. With Commissioner Peirce now on its side, the cryptocurrency community is more confident than ever that there will be a Bitcoin ETF on US exchanges in the near future.