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"Investors pile into bitcoin funds"

David_Snowball
in Fund Discussions
From the Wall Street Journal, 3/6/2024: "Bitcoin ETFs have been a smash hit, helping feed into a frenzy that has sent the cryptocurrency's price to a record. Investors have piled into the fund at a historic clip ... swelling [them] to nearly $50 billion."

It brings to mind Henry David Thoreau's curmudgeonly commentary: "Our inventions are wont to be pretty toys, which distract our attention from serious things. They are but improved means to an unimproved end, an end which it was already but too easy to arrive at ..."

Bitcoin is a high volatility speculation untethered, so far as I can adduce, to any underlying metric. The best portfolio-level argument for such toys comes when they are demonstrably uncorrelated with, or perhaps negatively correlated with, the stock market. So far, for bitcoin, that has not been the case. Bitcoin crashes periodically and crashes with especial vigor when the stock market does.

None of which makes a whit of difference to folks fearful of missing out.

Comments

  • yogibearbullyogibearbull
    edited March 6
    Just look at yesterday - all-time high for Bitcoin & then nearly crashed.
    New physical/spot Bitcoin ETFs have attracted billions. Major iShare IBIT, Fido FBTC. Lot of money just shifting from Grayscale GBTC.

    Riding this craziness with some Coinbase/COIN.
  • MarkMark
    Not a fan, not even of the bleacher seats. I'm quite content to hide out on a hiking path deep in the forest. You all have fun.
  • orage
    This article suggests the rise is from the disparity between ~900 bitcoins mined per day and the >3500 purchased by the ETFs.

    https://finance.yahoo.com/news/1-reason-for-new-bitcoin-mania-simply-not-enough-supply-194356549.html
  • larryB
    Is a person who piles into a bitcoin fund an investor? Or a speculator? Or is it just semantics? Is there a difference?
  • BaluBalu
    Once Huge companies sponsored those ETFs, the space was legitimized and Congress lost any power they may have had to control the monster. Previously, only the rich and cool kids dabbled in this space. Soon cryptocurrencies will permeate many retirement accounts of those that are not self managed plus 401(k) accounts.

    UNH paying ransom of $250m in cryptocurrency to a hacking group hardly made news this week.

    There is a reason why hedge funds and Aby Johnsons do not mix personal morality and investing.
  • Tarwheel
    What exactly are you buying of any real value when you “invest” in cryptocurrencies? With stocks, you are buying shares in a company. With bonds, you getting a more-or-less stream of income. I don’t get it.
  • Old_JoeOld_Joe
    'Round and 'round the wheel goes... where it stops nobody knows.
  • BaluBalu
    edited March 6
    Until we get dividends, we are buying stories we tell each other. When we get dividends, we buy physical conveniences, then we spend the rest on stories we tell ourselves.

    Look what Yogi is doing. He may not believe in it but he is participating. He is not looking for a moral victory but looking to make money legally.
  • Old_JoeOld_Joe
    He is not looking for a moral victory but hoping to make money by gambling legally.

    Absolutely nothing wrong with that, but let's call it like it is.
  • yogibearbullyogibearbull
    edited March 6
    I have core & explore.
    Core is very boring stuff.
    Explore is wilder stuff - stocks, options, futures-based ETFs (but no futures directly), and more recently COIN. Be aware that COIN has businesses of exchange, broker-dealer, custody, all related to cryptos, and more uniquely, it's US-based.
    Anyway, for explore, if it trades, I may look at it - it could be rotten fish smell in a bottle, I don't care. Can't a guy at 75+ have some fun? (-:)
  • Old_JoeOld_Joe
    Exactly! Carry on...
  • larryB
    @yogi. I am 75 and wanna have fun too. Go get em. But isn’t bit coin similar to investors of another time piling into tulip bulbs?
  • David_Snowball
    I hear Angela Lansbury melodic voice now: "tale as old as time, song as old as rhyme, it makes no sense in the least ... but I'm goin' in!"
  • Old_JoeOld_Joe
    A while back we bought the Angela Lansbury 12-year "Murder She Wrote" DVD set. We watch a few every weekend. Good fun.
  • WABACWABAC
    Old_Joe said:

    A while back we bought the Angela Lansbury 12-year "Murder She Wrote" DVD set. We watch a few every weekend. Good fun.

    Quite the wicked creature in Gaslight.

  • rforno
    IMO Bitcoin is the new forex for retail investors, probably small fries, looking to constantly trade. And I agree w/Balu that once these ETFs came out, it became normalized for the 'EveryWo/Man' and not something only for the rich to play with. But they did legitimize BTC as a trading vehicle ... and perhaps as a *potential* de-worse-ifier for longer-term global investors.

    On the upside, they're more liquid and 'valuable' than NFTs, which were a total scam to begin with.

    I dabbled in some miners a few years ago, played with some free BTC I got when I opened a crypto trading account, but that's the limit of my crypto forray. Woudl I consider COIN as an indirect play like Yogi? Perhaps. Would I invest in BTC directly or hold it via funds? No....don't need it.


  • yogibearbullyogibearbull
    edited March 7
    In my previous post, when I excluded futures from my list, I was thinking of @rforno !

    The observation that Coinbase/COIN is an indirect play on crypto "business" is right on. Owning COIN is like owning a casino, owning crypto is like being a gambler in the casino.

    Anyway, posters should look at new things in rational ways, not emotional ways. Crypto train has arrived, especially with these new spot-Bitcoin ETFs from major firms, and people can board or watch and wait for the next train.
  • MarkMark
    @YBB - did you mean 'posters' or 'investors'? Or both? Many people I talk to can't tell me the difference between crypto and bitcoin and a dark hole well at the same time most of those wonder if they need to get some or whether they should have some.

    In my infinite ignorance I tell them that when I buy a share of Apple or McDonalds I have a pretty good idea of what I own and what it might be worth. Not the same with bitcoin, not by a long shot.
  • yogibearbullyogibearbull
    @Mark, Bitcoin is a crypto with limited supply of 21 million. Other cryptos don't have supply limits & can be issued at will.

    So, the recent new ETFs buying & holding Bitcoin will reduce Bitcoin circulation.

    Bitcoin-halving is coming up in April. That reduces mining incentive fees & makes discovering & validating new Bitcoin transactions more difficult. That is ANOTHER feature that Ethereum, etc don't have.
  • BaluBalu
    edited March 7
    When Jeff Bezos was leaving Amazon CEO position, answering an unrelated question, he said someday Amazon stock price will become zero. As it does not pay a dividend, if I am a buy and hold investor what is the difference between AMZN and BTC (or COIN) to me today - just the price I pay. It is not what you buy but what you pay for it - Howard Marks.

    I think moderation is good for the health of the forum and attracting newer posters. I have made two too many posts in this thread and will stop here.

  • BaluBalu
    Bloomberg had a guest that said advisers (e.g., RIAs) are required to wait 90 days from the launch of a new financial product (e.g., ETF) before adding or recommending the product to their client portfolio. Is that true? I can not find anything related to this on the internet.

    (The guest was saying April 9th (90 days from the launch of the BTC ETFs) is a catalyst for more BTC demand.)
  • sma3
    lots of great gambling ideas

    ARKK is 11% COIN

    What about DJT?
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