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Post by yogibearbull on Jan 10, 2024 21:17:04 GMT
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Post by anitya on Jan 10, 2024 23:14:31 GMT
Was the conversion of GBTC approved?
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Post by yogibearbull on Jan 10, 2024 23:28:09 GMT
anitya , yes, but GBTC set the highest ER of 1.5%; but it can waive some of that fee. Those with the lowest ER were BITB 0.20%, ARKB 0.21%.
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Post by anitya on Jan 11, 2024 1:08:10 GMT
GRAYSCALE can thank the SEC for requiring redemption only in cash, if my memory is correct, trapping some of the current holders of GBTC and thus allowing it to charge high ER. It will be forced to reduce the ER over time. For someone like me, I can sell GBTC and buy one of the cheaper ones if there is enough volume / tighter B-A spreads.
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Post by yogibearbull on Jan 11, 2024 1:29:08 GMT
The SEC insisted on cash creation/redemption in this 1st round of ETF approvals. While some resisted this (BlackRock, Grayscale, etc), they were "told" to play the ball for this 1st round approval (or, wait for another time), and all capitulated. It is to be seen if this causes large tax-inefficiencies for these ETFs and that may be reflected in their bid/ask spreads.
GBTC already has $29 billion in assets (technically, the conversion meant "up-listing" from OTC to NYSE Arca), while others will start out with $0. There are rumors that BlackRock may seed its IBIT with a few billion dollars!
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Post by anitya on Jan 11, 2024 2:55:37 GMT
Yah, if SEC approved at its sweet time, they may not have insisted on cash redemptions. This is a power move from SEC. Of course, they can always find a reason for it.
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Post by yogibearbull on Jan 12, 2024 14:12:18 GMT
These "ETFs" were really approved as 1933-Act ETPs even though the term "ETF" is used loosely in some names and descriptions. All/most would issue K-1s, not 1099s. For a discussion of 1933-Act ETPs vs 1940-Act ETFs, see the link below. ybbpersonalfinance.proboards.com/post/1313/thread
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Post by anitya on Jan 12, 2024 21:46:08 GMT
More than the K-1s, the cash redemptions could surprise investors.
Not a recommendation for anyone to buy these ETFs but I would only go to the most liquid ones. I can see some of these (and may be all of them) trading at a discount because they are effectively like a CEF for an investor where your exit is cash. That could be the reason why many of these closed at a loss yesterday when BTC was up nicely. Market pundits ascribed the loss in these ETF prices yesterday to sell the news but that is not the case when you look at BTC price yesterday.
(So, all the fight for an ETF could end up being for nothing or we could see more legal fight - this time for in-kind redemption.) May be the upside was that we got lower ERs. Gary might just be smiling in his sleep.
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sgra
Lieutenant
Posts: 66
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Post by sgra on Jan 14, 2024 22:48:58 GMT
Bloomberg writer Matt Levine wrote about Bitcoin ETFs in his January 11 Money Stuff newsletter ( www.bloomberg.com/account/newsletters/money-stuff). It also also happens to be a good primer on the mechanics of ETFs in general. I hope this excerpt isn't too long to run into copyright issues (this is just a small part of his Bitcoin ETF discussion):
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Post by anitya on Feb 29, 2024 1:39:43 GMT
These "ETFs" were really approved as 1933-Act ETPs even though the term "ETF" is used loosely in some names and descriptions. All/most would issue K-1s, not 1099s. For a discussion of 1933-Act ETPs vs 1940-Act ETFs, see the link below. ybbpersonalfinance.proboards.com/post/1313/threadDo we have any more clarity on the question of lack of in-kind redemptions triggering cap gains for remaining shareholders of these ETPs? E.g., is the SEC even thinking of allowing in-kind redemptions? I am so itching to sell GBTC out of IRA and buy a different BTC ETP in a taxable account. No income and cap gain / loss product is perfect for a taxable account and a wasted space in an IRA. The only mental friction preventing me from transferring this product to a taxable account is the lack of in-kind redemptions.
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Post by yogibearbull on Feb 29, 2024 2:05:12 GMT
anitya , having just approved them with cash-redemption only, the SEC isn't going to revisit this issue so soon. Industry and the SEC have moved on to the next battleground - physical/spot-Ethereum ETFs. Industry players are claiming that is very similar to the already approved physical/spot-Bitcoin ETFs, but Gensler/SEC is saying no, it isn't. So, courts will now take up that, or the next Congress. Outflows from GBTC have been amazingly large, but it's hanging on to the high ERs. Twitter LINK
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Post by yogibearbull on Mar 11, 2024 14:00:11 GMT
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Post by anitya on Mar 11, 2024 19:09:38 GMT
Do not want to overhype the space, but only half of the 55b is net inflows. The other half is from conversion of a CEF (GBTC) into an ETF (and later outflows from GBTC into other ETFs). Both CEFs and ETFs are ETPs and really what the SEC approved should be called an ETP, as you suggested before.
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Post by yogibearbull on Mar 12, 2024 13:10:36 GMT
Technically, the old GBTC was almost illiquid before its conversion to the ETF GBTC. So, $55 billion into spot-Bitcoin ETFs is a correct figure.
GBTC has kept incredibly high ER 0f 1.50% for the ETF. While billions outflowed, the AUM seems to have stabilized around $28.5 billion now (Bitcoin run up also helped). But $28.5 B x 0.015 = $0.4275 B/yr, or $427.5 million/yr is still lot of money in fees. Now Grayscale is thinking of launching a new lower ER Bitcoin ETF, a trick that SDPR and iShares have used in past to have both higher ER and lower ER ETFs simultaneously.
For comparison, the ER for iShares/BLK IBIT is 0.25% (but reduced to 0.12% in the 1st yr for assets up to $5 billion; the current AUM is $14.2 billion already), and for Fido FBTC is 0.25% (but waived entirely for the 1st year; the current AUM $9 billion).
While ETP (under the 1933 Act) is the correct terminology for these newer stuff, everyone else is calling them ETFs, a term that literally applies to those under the 1940 Act. But this is 2014, and these arcane things are from 74-81 years ago, and the public has decided - who cares? I guess, I have started to follow this general practice too.
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Post by anitya on Mar 17, 2024 23:42:43 GMT
I do not know about other cryptocurrencies, but I can accept the pitch for BTC that it’s supply is limited (21m max) and BTW, BTC has never promised great future earning streams, unlike solar and other renewable stocks, cannabis stocks, and SPACs which all turned out to be more fads than BTC. The only story you need to believe about BTC is that governments around the world are interested in debasing paper currencies overtime. Who would have thought BTC has so much belief wrapped around it.
While China banned crypto trading, it is approving crypto ETFs for the HK stock exchange. Even China does not want to miss out on the action. Vanguard probably will throws in the towel after its clients missed the boat on BTC.
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Post by yogibearbull on Mar 18, 2024 12:08:58 GMT
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Post by fishingrod on Mar 18, 2024 12:48:08 GMT
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Post by anitya on Mar 19, 2024 19:55:03 GMT
These "ETFs" were really approved as 1933-Act ETPs even though the term "ETF" is used loosely in some names and descriptions. All/most would issue K-1s, not 1099s. For a discussion of 1933-Act ETPs vs 1940-Act ETFs, see the link below. ybbpersonalfinance.proboards.com/post/1313/threadDo we have any more clarity on the question of lack of in-kind redemptions triggering cap gains for remaining shareholders of these ETPs? E.g., is the SEC even thinking of allowing in-kind redemptions? I am so itching to sell GBTC out of IRA and buy a different BTC ETP in a taxable account. No income and cap gain / loss product is perfect for a taxable account and a wasted space in an IRA. The only mental friction preventing me from transferring this product to a taxable account is the lack of in-kind redemptions. My latest thought to move GBTC out of IRA is to buy MSTR in a taxable account. The three year chart looks identical through Dec 2023. Does any one know why MSTR skyrocketed YTD? I am thinking it is artificially trading at a premium and should come down. May be it caught the dual craze of BTC and AI. Any thoughts on a good price to buy MSTR (really exchange for GBTC)?
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Post by yogibearbull on Mar 19, 2024 21:01:54 GMT
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Post by richardsok on Mar 20, 2024 0:13:19 GMT
comparison: MSTR vs ARKY and ETHE. The funds listed by yogi on Jan 10 show similar trajectories to ARKY & ETHE. I suppose, in time, differences will emerge, esp AUM and daily volume. But for now it looks to me like there's MSTR ... and everything else. Whole different worlds of volatility. (Red line is MSTR 2-day MA) Attachments:
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Post by richardsok on Mar 20, 2024 1:31:32 GMT
So far ARKY (light blue line) appears to have an edge over most of the also-rans. yhoo.it/47CNOLf
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Post by anitya on Mar 20, 2024 5:08:42 GMT
Hi richardsok, Thanks for chiming in. I am looking for owning something that is close to BTC. Ideally, I would own a BTC ETF but the approved structure of these ETFs make them very tax inefficient to hold them in a taxable account and thus my thought of owning MSTR instead of any of the 11 approved spot BTC ETFs. Thanks.
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Post by yogibearbull on Mar 26, 2024 12:47:41 GMT
HK physical-Bitcoin ETF is going for in-kind redemptions, unlike the US versions. This may shift some of the trading from the US to HK. At some point in the future, the US regulators may follow, but right now they have their plate full with other stuff (Ethereum, continuing SEC enforcements, lawsuits, etc). Twitter LINK
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