Bitcoin is the currency of the Internet: a distributed, worldwide, decentralized digital money. Unlike traditional currencies such as dollars, bitcoins are issued and managed without any central authority whatsoever: there is no government, company, or bank in charge of Bitcoin. As such, it is more resistant to wild inflation and corrupt banks. With Bitcoin, you can be your own bank.
Real bitcoin vs the bitcoin ETFs
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ETFs do have some advantages over BTC not listed here - Capital gains can be tax sheltered, also not having to deal with seed phrases, hardware wallets etc will be desirable to many
Margin, shared buying power, leverage, recoverability.
A robber can threaten you and take all your bitcoin and that’s it gone. With an ETF you have financial institutions who can block and reverse illegal transactions.
Bitcoin? What's that?
Boom. Very key point. Firepower talks.
But what about buying bitcoin from a financial institution and not the ETF? Why do the institutions sell both? I don’t get it
But what about buying bitcoin from a financial institution and not the ETF? Why do the institutions sell both? I don’t get it
Like banks ?
No. With a bank you’re protected by the financial regulatory institutions (in the UK and most other countries).
With a bank you’re not protected at all unfortunately that’s what they want you to think though
There is 21 million ways to dodge robberies so you don't lose your coins.
If I broke into your house and put a gun to your head and forced you to transfer every coin you have into my wallet. Who could help you get it back?
And god invented passphrase. You can never know if the adresses on a seedphrase is the only crypto the guy has. Maybe there are others. It's called plausible denial strategy => https://www.ledger.com/ledger-101-part-4-advanced-security-principles
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Dont need to get it back when the robber doesnt get the coins in first place.
To list few things:
Multisig
Passphrase
"Bricked"/bricked device
Some timer to open the wallet so they take the wallet with them or just leave because they dont want to wait for 1h.
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You can buy real bitcoin in an IRA through Unchained though and keep the tax benefits
My employer won't buy bitcoin for me. But he does match contributions to my 403b. Would you rather I not have his contributions?
Yeah, it is not an opposition is cooperation.
Tell me more about these tax shelters
https://www.youtube.com/watch?v=JD-6xSV6tjk
How is cgt sheltered?
Because if you keep the profits in your retirement account you don't get taxed on it until you withdraw? I don't know that's how it works in Canada RRSPs anyway
Ok yeah same in Australian superannuation.
Does the opportunity cost of not holding your coins really out weigh the tax benefit? Not your keys not your coins
That's like holding your cash under a mattress instead of in an IRA.
Gee if only there was some way that you could hold both the ETF and actual bitcoin.
yea if i buy etfs right now on my wealth simple through my TFSA (IRA) all income from that will be 0 dollars tax. selling btc later? thats investment gains and ill have to pay tax.
Unless some ubiquitous layer 3 solution is developed that allows you to spend it directly? But, at that point it would be taxed right? The government is not giving up that much money. I don't know much about btc and I'm contemplating owning btc directly and having an etf in my ira as well. The tax benefit is huge.
Some people don’t seem to realize that self custody is not simple. It comes at cost and risk. How many make this argument for gold or fiat?
Well I use bitcoin because it doesn’t have what etf has too that’s the dark side of using bitcoin like any other fiat currency but not your keys not your coins so deal with it
Not learning to self custody your own value would be a con, once again giving the power away to a third party.
If I have $10M in cash or gold, there is no way in hell I am going to self-custody it, no matter how strong a safe I have at home.
Why would any other asset be different?
Coinbase has independent audits of their systems, industry best practices, hired security with guns that guards against not only criminals but the other employees including the other security, and regulators watching them, not to mention people who are in control of billions and would prefer that those billions stay in their control.
I would rather have it held in a way that I could audit and such if I wanted to, I could get insurance. Insurance isn’t going to insure self-custody of $10M gold OR Bitcoin.
People sometimes go overboard on the “Bitcoin allows you to be your own bank” thing. I mean, sure. But it also lets you do a lot of stuff that isn’t necessarily in your best interest.
Bitcoin doesn’t mean you can ignore the rest of the system. Or that you should; eg self custody vs custodial.
the best security is to be a humble monk and lose all the ego.
Be humble or be humbled
I'm not saying you're incorrect or foolish to entrust a 3rd party... But if all I need to do for self custody is to memorize 12 words and not spill the beans to someone else... that seems like quite secure self custody to me.
I do lose out on tax inentives. However, I am freer from the strings of the system and could hypothetically pick up and go anywhere with my store of value living in my brain. Cool enough and secure enough for me.
I don’t mean to be belligerent - maybe your memory is better than mine, and you know something about how to avoid Alzheimer’s, dementia, and head injuries that most people don’t. But to entrust a large amount of wealth - intergenerational wealth - to my memory, which can be wiped out by a head injury from falling ice off a roof, car accident, or sudden death… that’s a big risk.
(That’s supposedly what happened with Quadriga right? An entire exchange worth of BTC cold storage made inaccessible because the founder died?)
Also… eventually you’ll need to pass down your wealth, unless you’re taking it with you or letting it disappear. While letting it disappear theoretically increases the value of the rest of the Bitcoin out there I’d suggest it may be better spent being donated to fix world hunger or something. A brain wallet is not conducive to stuff like that unless you are certain you can do a transfer ahead of time.
I would be ok with a brain wallet for smaller amounts or for memorizing a part of a multisig wallet as long as you have enough keys stored elsewhere for enough redundancy. But for huge amounts of personal wealth… for me it’s a “no thanks” :)
The more you have held by other parties the more reason they have to confiscate your property.
The more I have held at home without security guards, the more reason they have to wrench attack me.
Given most Bitcoin is KYCd the risk of a wrench attack, or me making a critical error and losing my Bitcoin due to my mistake, break-in, fire, or other issue and the backups failing is likely higher than the risk of confiscation considering that it is now an asset that is widely available for purchase through regulated ETFs.
Just like the fact that gold won’t ever be 1933’d again due to the fact it is now a huge part of the financial system, neither will Bitcoin.
I mean, if you’re doing something criminal, you deserve what you get. Governments have every right to take your assets if you break the laws that state as consequence asset forfeiture, just like they have every right to give you a speeding ticket if you drive over the speed limit.
Only desirable to those that don't want responsibility to secure their own property. Those that absolve themselves of responsibility end up with corrupt governments and institutions that are not held to account. Which is why we have Bitcoin in the first place. Divesting responsibility is a false economy and a fools game.
I don't disagree with any of that tbh! just stating what seems to be the current reality. Perhaps it will take the current system to fall apart more severely in order for more people to realise why self custody is important
Swan has offered a Bitcoin IRA for quite some time.
Not self custody
People are afraid of using seed phrases and hardware wallets, but it's really as easy as using a bank account when you get used to it.
Imagine one day, ETF Coinbase got hacked just like Mt.Gox. Say goodbye to your ETF bitcoin.
That would not be good even if you self custody
It wouldn't affect you if you self custody. 1 BTC = 1 BTC
The value in relation to fiat will fall
You don't really need to deal with seed phrases you just write them down and put them somewhere safe like people do with personal documents all the time and tax sheltering is laughable when p2p selling exists.
Yeah all straightforward enough to me, but I've met so many people who just seem confused or scared about seed phrases, hardware wallets etc.
I'm sure you could get away with some undeclared p2p sales, but If you wanted to sell a lot like that you're playing with fire. Also if you need the funds e.g. for a mortgage deposit etc, you would probs run into trouble trying to prove the funds are legit
Yep. I feel some are trying to blow the difficulty out of proportion in order to sell ETFs
Do you have a good peer to peer selling website? It does still seem like the powers that be could track that as well if they wanted to. I am also curious, for p2p, don't you still have to trust a 3rd party for a short period of time to facilitate the transaction? or would you recommend using DEXs that circumvent this.
I like using bisq but you could take a look at kycnotme for other options.
Thank
lmao what the fuck happened to this sub.
people on this sub (mostly) have no problem with that, my point is the general population struggle with the concept self custody
I really can't stand the people out here shilling custodied bitcoins.
Another way to avoid capital gains is to live in a jurisdiction which doesn't penalize you for what money you choose.
As for the complexities of dealing with self custody, given these options
Learn how to self custody
Trust a custodian
I advocate option 1.
Do not entrust your bitcoins to a custodian. If you do that then the government can seize your assets on a whim. Or the custodian can rugpull you. NYKNY₿
Although I don't disagree with you, I would argue some people don't have the luxury to choose where they live.
And depending on where you live the likely hood of the government seizing your assets on a whim is not even worth considering. Sure its a possibility, but not likely. For some people that kind of argument wont resonate with them. Even if its possible.
However, with all that said, not your keys, not your coins.
👍🏻.
Yes, let me just pack up my life, quit my high paying American job, and move away from my friends and family, just so I can get BTC exposure without capital gains tax.
Or I can click a few buttons to get BTC exposure in my IRA....hmmm. Tough choice there.
I'm not in this for "exposure". I own bitcoin because it cannot be debased or seized. Bitcoin is the endgame, not fiat profits. NYKNY₿
I own BTC too.
My endgame is financial independence and early retirement. Until I can pay for my mortgage or healthcare or vacation or groceries with BTC, fiat profits are kind of a key part of that goal.
If you think ETFs are at risk of seizure, well, I'll just say I disagree.
ETFs have huge taxable advantages. And are covered by insurance. Why is this missing?
Because it doesn't fit the agenda.
ETF in a Roth IRA is like a superpower.
Yeah, in Belgium (my country) there's 30% capital gains taxes on bitcoin but 0 on ETF's. They hate us cuz they ain't us. I'm in here to use bitcoin as an asset for my fiat to get more fiat. I don't want to have bitcoin all my life, bc I will most likely not use it to buy things.
Which etf did you choose? I’m in The Netherlands.
WBIT, wisdomtree has a 0.35% cost per year. I first bought 21shares bitcoin etf, but it had 1.48% cost. Blackrock is 0.21%/year but I can't invest in that on Degiro.
Thanks, I got bitcoin in Bitvavo but because of the taxes I want to switch that into an etf.
Also one talks about options that are going to be approve. Basically sell out the out the money calls to get a little income.
Unchained offers IRAs with real bitcoin. You are the custodian. Not some company or third party
NYKNY₿
Bitcoin spot ETFs can be moved/sold without a taxable event if they're in a tax sheltered account.
This chart also skips over the obvious ETF benefits, like employer matching RRSP buy-ins, ease of transferring to family in case of death, tax credits for RRSP contributions, bank/brokerage makes password reset easy, and lack of technical knowledge requirement.
Not only that, but you can transfer ETF assets in-kind (without trading for cash) within and across most institutions without triggering a taxable event. Definitely not as easy, quick and practical as Bitcoin, but it's doable, even in non-sheltered accounts.
No more fees on the HODL ETF brah...
For a couple months
For a year
Or til find reaches $1.5b. Good way to get money in there. What are they at like 500m?
What will the mer be when it hits target
Conveniently left out the major tax benefits of being able to hold ETFs in registered accounts......
Unchained Capital offers that and gives you the keys
Their fees are absolutely atrocious.
250 a year is not much. People pay that much a year for streaming subscriptions. I guess having their keys isn’t that important to some.
This is true, but ETFs are so much more convenient and simple to use. My 70 year old mother will invest in an ETF but is never going to understand cold storage or transferring crypto to a new wallet. She still owns a VCR.
If I was very wealthy and a gold bug, I wouldn't have most of my gold in a safe in my house.
For the same reasons, I'll never have most of my Bitcoin holdings in self-custody.
It gets tiresome so many take these all or nothing approaches to life. 1000% agree.
It is my way or the highway in this not government run new way, if you don't go my way then your way is wrong /s
That's a stupid comparison. Gold takes up space and has mass. Bitcoin doesn't.
I'm the same, and even threw in a third option with some etf position.
Why not both
My safe weighs over 250 pounds and it’s appoxied to my cement floor in the garage, with cash, guns, and Gold, banks are starting to look scary to me 🤷🏼♂️ ( the black swan event )
You should delete this comment, Crazy and smart people out there.
appoxied, you say?
Whatever I’m dyslexic, glued stuck can’t be moved unless you have a prybar
I have Bitcoin mostly in hard wallet, some in hot wallets, eggs and baskets. I own Bitcoin ETFs in brokerage and in IRA, mostly Roth IRA. There are benefits to owning it in different ways, especially in an IRA.
Unchained offers bitcoin with your own keys in a Roth IRA. Can’t say the same for ETFs
For education of the dumb...i.e me
How can you move bitcoin without a taxable event? Asking for a friend...😂
Transfer from one address to another. Only sells to fiat, services, goods are taxable events. In order to move funds from an ETF, shares must be sold first to fiat.
Now...
How can you move btc to fiat without having your name attached to it? 😂
P2P transaction, better be safe though, could sell on bisq
It comes down to your bank, if you exchange for paper cash and never deposit it, the bank doesn't know you have it. This is where the whole "keeping money in the mattress" thing comes into play.
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Yeah, I think you're right you can sell and buy another stock without paying taxes until you sell the other asset and settle in cash, at least within retirement/between accounts (in specie) I know this is true.
You can't turn it into real Bitcoin without a taxable event.
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Where’s the line item for free trading in tax advantaged accounts? Or tax free growth in a Roth IRA?
Unchained offers REAL bitcoin with your keys in their Roth IRA
Growth is tax free in a trad IRA as well.
Ha, I was looking into an unchained ira and saw they charge a $750 account creation fee and 250$ annual fee. Fidelity Ira is free and fbtc only has a fee of 25 basis points
The diff is the ability to self custody BTC within your IRA. For some the fee will be worth it, for most it will not. (Also we’ll see if their fee comes down, as before the ETFs they were one of the few games in town for holding BTC in retirement account, and now they’re not)
Genuine question. Regarding unchained ira, what's the benefit of self custody?
Self custody means You’re not trusting a third party custodian with your BTC. Some people are more pessimistic (or paranoid) about the govt / legacy financial system than others. Look up executive order 6102. crazy shit can happen
Ok I get it now. One question though, say the government wanted to come after your bitcoin and you have self custody. Couldn't they just go to your house and take your recovery phrase? And in the case that you keep it in some other place (which is scary because anyone who finds it can steal your bitcoin and a bank deposit box is not an option because the government would just seize it) they would just make it impossible for you to actually use your funds. Any attempt to transfer your bitcoin gains into fiat would just be seized by government no?
I’ve never seen anyone saying “my ETf got drained”
Never seen anyone say that if they kept their 12 words a secret either
A lot of people are bad at remembering passwords. If you have generational wealth in bitcoin being your own bank is very risky
True, but it’s safe risky, maybe it just gives me enough of an adrenaline rush for responsibility and mental health
Misleading and incomplete.
From my perspective there is one thing that makes ETFs superior for my use case. I can take out margin against it.
Can't easily borrow against BTC in a cold wallet.
Unchained will now remain niche forever. Wonder if it is worth it 5 years from now.
I don’t give a shit - I can’t buy BTC in my Roth and since that’s not on the list it misses the whole point of all of the 401k money in the market
That said, also probably a huge reason for the recent run
in an iTrust Capital Roth IRA you can buy and sell Bitcoin 24/7 tax free
It really annoyed me they didn't change the yes and no colours on the mandatory fees line
I think you misunderstand the point of the colours. blue=good, orange=bad, not yes/no
That's stupid when they are only switched to being good or bad for one line.
Yes=blue=good for every line except mandatory fees in which case no=blue=good. They are good/bad for all lines, but that is the only one where no=good.
You do have a point tho from an OCD perspective, they could have stated the criterion differently, like "No Mandatory Fees" then it would follow the same pattern as all the others.
Wait, the last point, how can you move BTC without a taxable event? Pretty sure you can’t.
Can move from one wallet to another, but not back and forth from fiat
Your own wallets yes. But if you transfer to someone elses wallet, be it for a purchase or otherwise, that is a taxable event. The onus is on you to report it for each transaction that is not to yourself. Don't want to report it? Welcome to tax evasion on a public ledger. Good luck.
Your address does not have your name on it.
So? You bought with an account that does like coinbase or gemini and then it got sent using a public ledger. If you think the IRS doesn’t know who you are you are mistaken.
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lol someone hasn’t heard that Unchained Capital have Roth IRAs where you keep the keys
So you are gonna trade gold for shit?
Why is this trading gold for shit. First off he never said he was selling but second off, buying the bitcoin ETFs is a FANTASTIC way to get most of the upside of a btc investment and all of the tax benefits of a Roth IRA.
Living in the US for example, you would typically be buying BTC with money you got from a paycheck. That money is after tax money. So you have ALREADY paid the government taxes, NOW you are gonna buy BTC. Then you end up paying taxes AGAIN on the profit in the form of capital gains when you sell it one day. Honestly, investing in BTC via a Roth IRA is an amazing way to maximize how much of that stack you actually get to keep when you eventually cash out.
Just to be clear, I think it's a great idea to have a stack of BTC itself. Having said that, it is naive and close minded to ignore the MASSIVE tax benefits from a Roth IRA.
ETFs can be held in tax free accounts to avoid capital gains taxes when you convert to fiat.
So can bitcoin in a Roth IRA
Canadian here, though. Only way to tax shelter bitcoin is tax free savings account.
Yep guess that’s true for you
What do you mean when you say an ETF is not “censorship resistant”?
Hard forks and government confiscation
You guys aren't paying fees for buying and selling BTC?
What do yals process of buying btc look like? Yal buying on Coinbase, cashapp, or Robin Hood and transferring to a cold wallet? Or going through local btc and depositing cash into someone’s account? Generally curious bcuz I’m looking at doing the latter to stay anon
Many benefits in buying the ETF over the coin itself as well though. Like not having to deal with the responsibility of losing thousands or millions of your own money, the responsibility here falls on the institutions that provide these ETFs, so your money is safe. Overall though, the biggest and most important thing is what they have in common, which is the value of money going up for both
You fail to realize that many people (myself included) spent years contributing to retirement accounts where the funds were locked up in a registered account. I can now easily take those same funds which were invested elsewhere and move it into bitcoin. People need to see the world is multi-colored and not just black and white.
Also, you want MORE vehicles to draw funds into this asset - not bash those that use another vehicle to get to the same place.
People really need to stop being so negative on these ETF's.... Like dude, over 60 BILLION of new inflows came into this ONE ASSET in a month because of ETF - you dont think that pumps everyones bag?
If you're here for BTC as a medium of exchange, then great - your bags just got pumped and u can buy more for fewer sats. What's wrong with how people decide to allocate their capital.
Should "pumps Larry Fink's bags" be added as a benefit of bitcoin or the ETFs? It's a little of both now 🤗
Coloring is off for the spot etf columns
I like those comparisons, car vs boat, yellow pikachu vs hardwood floor, butter vs T beam etc..
I mean I can't buy Bitcoin with my TFSA so bugger off
paper hands No Yes
Good comparison matrix.
My ETF units won't ever be hacked or lost. Plus the BTC Blockchain won't know everything I do with them.
One is an ETF and one isn't. Rocket science.
ETFs the candy to get them hooked. One day they buy a etf then next they self custody
Then they have a panic attack the first time they misplace their password and are back to the ETF.
Someone is colorblind or lazy
Kudos to whoever put this together.
That Number go up is just fine. Anyone here that is able to leverage both, should do so, especially if you have other employment or business benefits.
Thanks OP :)
This is a good video on that topic:
https://www.youtube.com/watch?v=JD-6xSV6tjk
Very very misleading graphic which I do not agree with.
Well, as a bitcoin maxi and a software engineer, this just shows btc has a long way before mass adoption. It’s simply not easy to buy, store and make payments easily with BTC for the average non tech savy user (currently)
Mandatory fees being a no is a bit dishonest.
OK, I agree that etfs are the inferior to straight bitcoin. But how else am I supposed to get bitcoin exposure in my ira while still having the ability to own other securities? I looked at companies like itrust capital and your options are crypto, gold, and cash.
My investing strategy is to hold 25% in TLT as deflation protection and keep the other 75% in bitcoin. This way if there is a horrible deflationary crash and bitcoin loses 90% of it's usd denominated value, TLT is likely to double in price at the same time so I can then sell TLT and get cheap bitcoin.
Number go up? Perfect, thanks.
a scammer can get them YES NO
qualifies for ROTH IRA YES NO
Why not BOTH>?
Despite the apparent disadvantages, ETFs continue to be a favored choice among investors.The concern, however, is that as ETFs grow in scale, they may end up controlling the pricing power. Imagine them as the Godzilla of the financial markets, where instead of breathing fire, they breathe price manipulations. Should we be worried?
You forgot taxes lol. Main reason of ETF
Switched into 70% FBTC and 30% MSTR in my Roth IRA…. No fees to trade, no taxes in 10+ years. Numbers go up.
Think I should switch the 70/30? 70% MSTR 30 FBTC
i prefer real
While I like real Bitcoin, I can borrow against IBIT in order to access liquidity. I cannot do that with real Bitcoin, unless I want to pay 14% with Unchained.
Most of my Bitcoin is cold storage, but I also buy the ETFs in a taxable account.
A little biased maybe.
lol just a little :) thanks u/unchainedcap
I don't like the ETFs. They literally defeat the purpose of what Bitcoin stands for.
Yes.
ETFs make a ton of sense for the average investor.
Why is this list so long? Only need number go up… /s
That’s all that everyone cares about anyway. 🤣
Simplicity for people familiar with investing:
Bitcoin: No
Bitcoin Spot ETF: Yes
Benefit of the ETF: Safer and more secure. There's weekly posts of people who forget their seed phrase here. Not possible when buying the ETF.
Well you're not supposed to try and remember it.
Number go down…
What about Bitcoin via Robinhood