kossie on Nostr: MY View of ETF Shit Decentralization Issue: The majority of US-based ETFs use ...
MY View of ETF Shit
Decentralization Issue:
The majority of US-based ETFs use Coinbase as their custodian. This means that the decisions and transactions of fund managers are routed through Coinbase, and Coinbase's policies can impact the ETF. The ultimate supervisory authority lies in the hands of the US government, and under government orders, fund managers and exchanges could shut down immediately. This situation is reminiscent of the rug pull and Nixon shock issues, as evident when studying the Nixon shock case.
Yield and Fee Issues:
For anyone who has experience with stocks, it's well understood that ETFs aim to maximize profits through buying and selling. However, there are very few ETFs that outperform the market or indices. Unlike holding stocks for the long term, ETFs are subject to continuous fees, eroding potential returns through compounding. Additionally, one must be aware of paying taxes when buying and selling ETFs. Considering all these factors, there remains a question of whether the expected returns from holding ETFs are better than investing in individual stocks, such as Tesla, excluding ETFs.
Trust Game:
The Genesis Block of Bitcoin was created to break away from the trust game of relying on governments and third parties, as stated in "January 3, 2009, Chancellor on brink of second bailout for banks." Entrusting one's assets to a third party through ETFs or pensions is akin to relinquishing financial sovereignty. While Bitcoin solves the trust game with its peer-to-peer (p2p) money solution, ETFs cannot provide the same level of assurance. The narrative of criminalizing self-custody has already emerged in the current US government, and the push for a digital dollar (CBDC) further suggests a desire to control individuals within the system.
Liquidity:
A prominent figure in the current scene has stated, "ETF is a lobster trap: Bitcoin goes in, never comes out." This implies that a significant portion of current and future Bitcoin holdings will fall into the hands of institutions and governments, and the nature of "physical ETFs" results in a substantial reduction in liquidity. The increasing scale of ETFs, fueled by continuous fiat money printing, leads to institutions accumulating physical assets. As a consequence, liquidity decreases, prices skyrocket, and retail investors lose purchasing power. This forces individuals into a position where they must use p2p solutions unless they want to succumb to ETFs. BlackRock's recent SEC filing indicates a system where the exchange is not necessarily a one-to-one exchange but involves brokers handling cash transactions while delivering shares.
Conclusion:
In conclusion, supporting ETFs implies accepting surveillance, control, and potential crises such as rug pulls and Nixon shocks. Sacrificing the benefits and convenience offered by exchanges, and surrendering financial sovereignty to governments and institutions. However, there is little we can do to stop the current wave of ETFs. Still, through voicing opposition, even if it's just a small voice, we can contribute to raising awareness for those who have not yet entered this space or for ourselves. Even if ridiculed for having a hero complex, it is what it is, and one might consider it a duty to enlighten others or oneself. This is akin to a sense of humanity.
Therefore, my final conclusion is SSSTTTFFFUUU - Secure Self Custody and Run a Full Node.
Decentralization Issue:
The majority of US-based ETFs use Coinbase as their custodian. This means that the decisions and transactions of fund managers are routed through Coinbase, and Coinbase's policies can impact the ETF. The ultimate supervisory authority lies in the hands of the US government, and under government orders, fund managers and exchanges could shut down immediately. This situation is reminiscent of the rug pull and Nixon shock issues, as evident when studying the Nixon shock case.
Yield and Fee Issues:
For anyone who has experience with stocks, it's well understood that ETFs aim to maximize profits through buying and selling. However, there are very few ETFs that outperform the market or indices. Unlike holding stocks for the long term, ETFs are subject to continuous fees, eroding potential returns through compounding. Additionally, one must be aware of paying taxes when buying and selling ETFs. Considering all these factors, there remains a question of whether the expected returns from holding ETFs are better than investing in individual stocks, such as Tesla, excluding ETFs.
Trust Game:
The Genesis Block of Bitcoin was created to break away from the trust game of relying on governments and third parties, as stated in "January 3, 2009, Chancellor on brink of second bailout for banks." Entrusting one's assets to a third party through ETFs or pensions is akin to relinquishing financial sovereignty. While Bitcoin solves the trust game with its peer-to-peer (p2p) money solution, ETFs cannot provide the same level of assurance. The narrative of criminalizing self-custody has already emerged in the current US government, and the push for a digital dollar (CBDC) further suggests a desire to control individuals within the system.
Liquidity:
A prominent figure in the current scene has stated, "ETF is a lobster trap: Bitcoin goes in, never comes out." This implies that a significant portion of current and future Bitcoin holdings will fall into the hands of institutions and governments, and the nature of "physical ETFs" results in a substantial reduction in liquidity. The increasing scale of ETFs, fueled by continuous fiat money printing, leads to institutions accumulating physical assets. As a consequence, liquidity decreases, prices skyrocket, and retail investors lose purchasing power. This forces individuals into a position where they must use p2p solutions unless they want to succumb to ETFs. BlackRock's recent SEC filing indicates a system where the exchange is not necessarily a one-to-one exchange but involves brokers handling cash transactions while delivering shares.
Conclusion:
In conclusion, supporting ETFs implies accepting surveillance, control, and potential crises such as rug pulls and Nixon shocks. Sacrificing the benefits and convenience offered by exchanges, and surrendering financial sovereignty to governments and institutions. However, there is little we can do to stop the current wave of ETFs. Still, through voicing opposition, even if it's just a small voice, we can contribute to raising awareness for those who have not yet entered this space or for ourselves. Even if ridiculed for having a hero complex, it is what it is, and one might consider it a duty to enlighten others or oneself. This is akin to a sense of humanity.
Therefore, my final conclusion is SSSTTTFFFUUU - Secure Self Custody and Run a Full Node.