I love Bitcoin. If you have followed me for any length of time, it should be obvious that I’m bullish on Bitcoin. Bitcoin was truly revolutionary. It was a digital form of hard money and the argument can be made that it is the hardest money ever.
Bitcoin allows for decentralization and self-sovereignty for all users with your money by holding your keys and verifying with your node. Bitcoin empowers people to take control of their own money and financial futures. It offers people true financial freedom. Imagine giving every human being access to incorruptible money that can’t be confiscated or tampered with by a corruptible third party. It was groundbreaking and it should offer people hope.
It is no wonder that countries that are considered to be third-world nations are more open-minded to Bitcoin. They have more visibly seen how money can be corrupted, and how third parties can both confiscate and tamper with your money. It’s because of this countries like El Salvador, have made Bitcoin legal tender. It’s a way to give people financial freedom like never before.
The Bitcoin ETF in comparison offers convenience for traditional investors in the United States by giving them price exposure to Bitcoin. I think this will ultimately help Bitcoin in the long run by giving it more credibility to a larger audience. That isn’t all bad for Bitcoin as the price may rise quickly. What it will do is create a new on-ramp for people wanting exposure to Bitcoin. The question you should be asking though is this the on-ramp you want to take?
What is important to understand, though is a Bitcoin ETF is not Bitcoin. It ultimately lacks what made Bitcoin unique. Bitcoin was not defined by any institution or central authority. It had no reliance on third parties. It was decentralized and independent from those structures.
The Bitcoin ETF in theory is not all bad from a practical standpoint for traditional investors and could be beneficial to Bitcoin. The traditional investor could see some fruitfulness to the exposure by getting introduced to Bitcoin on a more traditional level if they are not as open to Alternative Assets. This could be a good thing for some people.
I see the value in Alternative Assets. I would argue that those seeking to build wealth are more apt to accomplish it through an Alternative Asset Strategy. Alternative Assets include real estate, businesses, commodities, peer-to-peer lending, venture capital, cryptocurrencies, etc. This is one of the biggest ways to build wealth.
The Security Exchange Commission (SEC) has defined Bitcoin as a commodity. This means Bitcoin is an Alternative Asset. The Bitcoin ETF is not an Alternative Asset, but instead a traditional investment. It is important to know the differences.
Bitcoin has been called everything from digital gold to digital energy to digital property, etc. It is up to you how you want to best define Bitcoin. What I know to be fact is that it is defined as a commodity by the SEC. That means I am holding a commodity in my opinion.
It is my strategy to hold the real asset. I am not interested in holding a Gold ETF, nor will I be interested in holding a Bitcoin ETF. I consider them cheap imitations in my opinion of the real thing. I want the actual asset.
Now that's my opinion and my strategy. It isn't everyone else's. I think the ETF could be beneficial in the short term. I still see Bitcoin evolving and I see the whole financial ecosystem changing, but that doesn't happen overnight. This ETF, though not my cup of tea could be a way for more people to start to become exposed to Bitcoin. This is good for Bitcoin.
I urge people, though to get educated and take the time to truly understand the asset, the potential future of an entirely new financial ecosystem, and what makes Bitcoin revolutionary. Do not follow the crowd or make rash decisions. I’m a believer in financial education, and now is the time to grow and learn. It’s not too late to get into Bitcoin but start with educating yourself before jumping into something you don’t fully understand. I think the future still looks bright for Bitcoin. This is just the next step in a journey of financial freedom.