Traditional traders in the United States now have access to a groundbreaking investment tool with the introduction of spot Bitcoin exchange-traded funds (ETFs), as stated by an industry expert. These spot Bitcoin ETFs, backed by physical Bitcoin, offer distinct advantages over other commodities-based ETFs such as gold ETFs, according to Darin Feinstein, the founder of blockchain firms Core Scientific and Blockcap.
Feinstein emphasized that a spot Bitcoin ETF operates on an immutable ledger, which he considers to be the most advanced accounting system ever created. In an interview with Cointelegraph, he stated, “A Bitcoin ETF proves via the Bitcoin network that it holds the Bitcoin – that’s a much safer investment, in my opinion, than investing in any other ETF, such as a gold ETF, where you have no way to know on a real-time basis if it’s really holding the gold or if it’s been authenticated.”
Feinstein pointed to Bitwise as an example of a spot Bitcoin ETF provider that publicly disclosed the address holding the underlying BTC for its Bitwise Bitcoin ETF shortly after its launch. The Bitcoin network’s transparency allows for real-time tracking of transactions and addresses, enabling platforms like Arkham to independently locate the addresses of spot ETFs such as the Grayscale Bitcoin Trust ETF and BlackRock’s iShares Bitcoin Trust.
Unlike other commodities, the Bitcoin network provides transparency regarding the total supply of Bitcoin in circulation and the remaining amount yet to be mined. The supply of Bitcoin is capped at 21 million coins, a unique feature absent in commodities like gold.
Feinstein also highlighted the lack of reliable methods to verify the storage, verification, auditing, and authentication processes for physical gold. He pointed out that despite claims of $11 trillion in physical gold on Earth, there has been no public audit of federal gold for up to 70 years.
Feinstein concluded by stating that investments that self-audit, self-authenticate, prove reserves, and offer 24/7 public visibility have never existed before the advent of the Bitcoin ETF. While concerns have been raised about the potential creation of “millions of unbacked Bitcoin” with spot Bitcoin ETFs, Bloomberg ETF analyst Eric Balchunas expressed confidence in holding Bitcoin, stating that spot Bitcoin ETFs are essentially equivalent to physically backed gold ETFs.
Overall, spot Bitcoin ETFs represent a revolutionary investment opportunity for traditional traders, providing unprecedented transparency and security in the world of ETFs.