Thread by @CryptoOpti45

Recently,
@BlackRock the world leading providers of investment, advisory and risk management solutions based in New York City, filed for #BitcoinETF in push into #crypto

A thread 🧵

This thread comprises 👇

1. What is #EFT
2. What is #BitcoinEFT
3. #BitcoinEFT Regulation
4. Advantages & Demerit of #BitcoinEFT
5. #BitcoinEFT or Owning #Bitcoin which is better.

What Is an #ETF?

1/5
An Exchange-Traded Fund (#ETF) is a type of security that can be traded on a stock exchange. #ETFs typically track multiple underlying assets, such as an index fund, stock, commodity, bond, or other asset, but can be structured to track anything from a

single commodity to a broad collection of securities.

2./5

A bitcoin #ETF is an exchange-traded fund that tracks the value of bitcoin. #ETFs can be bought, sold and traded on traditional stock market exchanges instead of cryptocurrency trading platforms. It is a solid way to

give mainstream investors and speculators bitcoin price exposure through a reliable vehicle with which they are likely already familiar.
A #Bitcoin exchange-traded fund allows investors to gain exposure to the biggest cryptocurrency by market cap without actually owning any.

Exchange-traded funds are not a new invention and are common in the financial sector. 

Currently, the United States has yet to approve a spot bitcoin #ETF, though investors can invest in bitcoin futures #ETFs. The difference between the two is a spot bitcoin #ETF is backed with

actual bitcoin (#BTC), while bitcoin futures ETFs are backed by bitcoin derivatives.

3/5
#BitcoinETF Regulation

Exchange-traded funds are regulated financial products. At the time of writing, a #BitcoinETF has not been approved by the United States Securities and Exchange

Commission (#SEC).

Dozens of companies have filed for approval to offer a #BitcoinETF to U.S. investors, but there's an assumption about the use of bitcoin for fraud and manipulation have made regulators hesitant to approve a Bitcoin ETF on the grounds of the potential risk it

posed to U.S. consumers.
4/5
Advantages/Merit

👉Convenience: An #ETF doesn’t require learning how to use a crypto wallet or opening accounts at crypto exchanges.

👉Users do not own #BTC directly, gaining price exposure without asset ownership through investment vehicles they

are more familiar with and tax rules they know.

👉Portfolio diversification: An #ETF can hold more than one asset. A bitcoin ETF could hold actual #BTC, bitcoin-related stocks and other assets as part of the fund. Even if it only holds BTC, investors gain an option to diversify

their portfolios held in traditional markets.

Drawback/Disadvantages

1 Fees: #ETFs often have management fees baked into the fund, meaning that a percentage of the money in the pool is going not to investments but to pay the people/company managing the fund.

👉No actual bitcoin ownership: A #BitcoinETF cannot be exchanged for other cryptocurrencies as holders do not own the asset but merely gain price exposure.

👉More rigid trading hours: #Crypto can be bought or sold 24/7, but financial exchanges like the New York Stock Exchange

(NYSE) are open only Monday to Friday from 9:30 a.m. ET to 4 p.m. ET, so if there is significant movement in BTC’s price overnight you can’t do anything about it until the market re-opens.

👉Inaccurate pricing: A bitcoin price increase/decrease may not be reflected in the ETF

value in real time, especially if the ETF has multiple holdings.

5/5
There is no definite answer to this question. Every investor has different needs and expectations. For example, a #BitcoinETF does not represent BTC ownership but it still offers the necessary price exposure.

Moreover, an #ETF can be more useful to those who prefer a more passive price exposure, users who are wary of bitcoin, or traders looking to diversify their portfolios conveniently.

On the other hand, owning #Bitcoin good for those who want to engage in regular trading, spend

#BTC as a currency, or venture deeper into cryptocurrencies through trading or other means.

Anyone can buy bitcoin from an exchange, broker or ATM after verifying their identity, whereas spot bitcoin ETFs have yet to gain SEC approval. Futures-based ETFs exist for bitcoin,

but only price exposure may not be sufficient for everyone.

The end!!!
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