Comments by "Magic Beans" (@Magic_beans_) on "Explaining The Bitcoin Spot ETF Situation" video.

8:00 This is good to remember for investments in general: expectations are already priced in. Maybe the markets are inefficient in the probabilities they’re pricing in, but it’s not as if hodlers don’t already know about the ETFs or the halving.
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That’s the point, good investing isn’t exciting. The average retail investor does far worse than they would by just buying and holding an index fund and accepting market-average performance. A couple of the big reasons they do worse is trading too much and chasing performance. In this case it could mean jumping into BTC expecting quick gains, then bailing when the correction comes. (That’s one thing the hodlers get right, they don’t buy at a peak and sell during a crash. Can’t say that for a lot of ARKK investors.)
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That’s exactly what he says at 7:29. It’s a marginal correction, something that happens every few years in the stock market. It’s just that some people expected an immediate surge.
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Tell me you didn’t watch the video…
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They’re basically all the same, they hold a basket of assets and each of these funds’ baskets hold just one thing: Bitcoin. Unless you have a reason to seek out or avoid a certain provider, you may as well go with the cheapest. ARKB, BITB, IBIT, and FBTC are all in the 0.20-0.25% range. As our host mentioned, some funds are temporarily waiving part or all of their management fee. Just my conjecture, but I suspect that they’re doing this is because within a couple years they expect the market to have consolidated into maybe three dominant funds, and everyone will flock to those going forward. We already have that with S&P 500 index funds: there are dozens of such funds but SPY, VOO, and IVV dominate. Even within a company, SPLG is 1/20 of the size of SPY and sees 1/10 the trading volume despite being the same holdings with a lower expense ratio. Since asset managers make their money as a percentage of assets under management, becoming one of those really big funds would be great for the bottom line.
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@adj789 Also they wouldn’t have all bought on day 1. A new fund offering is similar to an IPO, they build up an initial supply of shares, contracts, or in this case beforehand. They have to, so they have something to sell to retail investors.
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The rules are pretty vague since situations differ and investors love to exploit loopholes. The main thing they mention is rebuying the same security or another security from the same company (e.g., BRK/A and BRK/B or GOOG and GOOGL). In my experience with the IRS, as long as your argument isn’t total nonsense or clearly bad faith, they’ll allow it. In this case if they’re held by different companies or based on different indices (say one’s the S&P 500 Growth and another is the Russell 1000 Growth) it’s much easier to argue they’re different. And of course you could always park the money somewhere for a month and come back.
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There hasn’t yet been an IRS ruling on that aspect of ETFs, like whether you could sell VOO and buy SPY to harvest a loss (which are managed by different companies but track the same index). When there’s a gap like that, that usually makes it a question of whether the taxpayer gets challenged on it, and then whether they can justify their move with a straight face. In my amateur opinion, I think in this case one could point toward the expanded options with lower fees, as well as the fact that GBTC changed its thesis from what they’d originally invested in.
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