TD₿: Is Financialization a Double Edge Sword for Bitcoin? by Caitlin Long
TL;DR Why a Bitcoin Futures ETF should be met with cautious optimism.
Hey Bitcoiners,
Bitcoin bears are on life support this morning as bitcoin has tapped $60,000 amongst rumors of an imminent Bitcoin Futures ETF approval.
If you’ve been around here for a while, you know an ETF has been an elusive dream for Bitcoiners. The SEC has rejected many ETF proposals in the past.
The benefits of an ETF are obvious - it allows more access for investors to gain exposure to Bitcoin, increases liquidity, and the price should follow.
However, there are downside risks to an ETF that need to be considered too.
Caitlin Long has been touching on this subject for years and wrote this article on why a Bitcoin ETF approval should be met with cautious optimism (07/31/2018).
In the end, Bitcoin will succeed with or without one.
Tick tock next block,
Cory Klippsten
P.S. - Futures-based commodity ETFs are mostly for traders, not long-term holders.
These products will suffer from "contango bleed," essentially selling low and buying high as they roll over the futures contracts from one period to the next. Experts estimate underperformance of these funds at 5-10% annually, vs. buying real Bitcoin.
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