Disadvantages of Bitcoin ETF

[onusplatform]

While Bitcoin ETFs offer several advantages for investors, they come with notable limitations:

Management Fees: ETFs typically charge annual management fees, reducing the profits for those holding shares in a Bitcoin ETF compared to direct trading on cryptocurrency exchanges.

Trading Hours: Bitcoin ETFs are only available on the stock market and depend on stock market opening/closing hours. This limits the flexibility of trading for investors compared to the cryptocurrency market.

Lack of Payment Functionality: Unlike Bitcoin, Bitcoin ETFs cannot be directly used as a means of payment in some countries, reducing its flexibility as an investment asset.

ETF Price Discrepancy: The price of a Bitcoin ETF may deviate from the actual value of Bitcoin due to the imbalance between supply and demand, potentially leading to inaccurate buying/selling prices.

[Stompix]

You missed the most important one:
Not your keys not your coins! Promises on a paper are not keys either!

Also:
Lol at this one:

Lack of Payment Functionality: Unlike Bitcoin, Bitcoin ETFs cannot be directly used as a means of payment in some countries, reducing its flexibility as an investment asset.

Bitcoin as means of payment is on its last breath, everybody is interested in returns in $, and the ones that still want to use it are hammered with fees!

And this one is the same for BTC, you don't have a 10% drop without an imbalance between those two, and Bitcoin managed to do a 90% drop.

ETF Price Discrepancy: The price of a Bitcoin ETF may deviate from the actual value of Bitcoin due to the imbalance between supply and demand, potentially leading to inaccurate buying/selling prices.

[gunhell16]

While Bitcoin ETFs offer several advantages for investors, they come with notable limitations:

Management Fees: ETFs typically charge annual management fees, reducing the profits for those holding shares in a Bitcoin ETF compared to direct trading on cryptocurrency exchanges.

Trading Hours: Bitcoin ETFs are only available on the stock market and depend on stock market opening/closing hours. This limits the flexibility of trading for investors compared to the cryptocurrency market.

Lack of Payment Functionality: Unlike Bitcoin, Bitcoin ETFs cannot be directly used as a means of payment in some countries, reducing its flexibility as an investment asset.

ETF Price Discrepancy: The price of a Bitcoin ETF may deviate from the actual value of Bitcoin due to the imbalance between supply and demand, potentially leading to inaccurate buying/selling prices.

If you buy Bitcoin in the stock market and base your trading activity daily, there will be a limit. You know that traditionally, only business hours can be used to conduct actual trade in the stock market.

But if what we are used to here in cryptocurrency trading is, of course, you know that anytime we can do trading here regardless of what we can do, because of the regulated business system, we are not really in control of our assets, but here in the field, we live by ourselves as long as we have control over our crypto assets.

[Aanuoluwatofunmi]

While Bitcoin ETFs offer several advantages for investors, they come with notable limitations:

Management Fees: ETFs typically charge annual management fees, reducing the profits for those holding shares in a Bitcoin ETF compared to direct trading on cryptocurrency exchanges.

Trading Hours: Bitcoin ETFs are only available on the stock market and depend on stock market opening/closing hours. This limits the flexibility of trading for investors compared to the cryptocurrency market.

Lack of Payment Functionality: Unlike Bitcoin, Bitcoin ETFs cannot be directly used as a means of payment in some countries, reducing its flexibility as an investment asset.

ETF Price Discrepancy: The price of a Bitcoin ETF may deviate from the actual value of Bitcoin due to the imbalance between supply and demand, potentially leading to inaccurate buying/selling prices.

All these are less concerned by an average bitcoiner, we are not involved in this, their investors are, we deals with bitcoin while other people are dealing with centralized institutions and their market performance relaying on bitcoin market price, so those investors are affected by this factors and not bitcoiners, the bitcoin ETF is something different entirely from the bitcoin network, it only provides for more use case of bitcoin market price for some business organizations.

[Faisal2202]

While Bitcoin ETFs offer several advantages for investors, they come with notable limitations:

Management Fees: ETFs typically charge annual management fees, reducing the profits for those holding shares in a Bitcoin ETF compared to direct trading on cryptocurrency exchanges.

you are right but the most of people these big companies have as their customers are old people and they have millions of dollars as well, we can also say these big companies like fidelity, etc. have rich customers and they are old, they don't want to manage everything on there own, instead they will tell their broker to do it for them and when they will ask the broker to buy 1 million of BTC then they have to pay the fee as well plus other tax, etc. but don't you think they are already paying tax and fee on every other ETFs they have invested in. So what's the big deal here.

Trading Hours: Bitcoin ETFs are only available on the stock market and depend on stock market opening/closing hours. This limits the flexibility of trading for investors compared to the cryptocurrency market.

Yeah this is an issue but just like before when institutional traders got some time at weekend from traditional market they jump into crypto market to make some extra money, same can be happen here, if people are buying ETFs by themselves, then they can also buy BTC by themselves at the weekend when they are not trading in ETFs.

[ZAINmalik75]

While Bitcoin ETFs offer several advantages for investors, they come with notable limitations:

You are comparing the advantages of BTC with BTC ETFs which is not a good comparison because, in every aspect of life, BTC has more benefits than BTC ETFs have. Because BTC provides us the features of decentralization, anonymity, and security, and we get to experience the real features of BTC for example we set up wallets by ourselves, we make accounts on exchanges by ourselves, and we are the real owners of our assets all the time. We are the ones responsible for our assets.

But those who are into BTC ETFs can't enjoy these features because ETFs are centralized and not under the control of buyers, we are just giving our money to Fidelity and other ETF trading platforms and not even buying the real BTC. In short, I would like to conclude that we should not think of BTC ETFs as real BTC so we should not hope to experience the same features as well because both are two different things with different purposes nad functionality.

Other than this, the disadvantages that you have mentioned are real ones, but you should talk about the real disadvantages of BTC ETFs only rather than comparing it with the real BTC.

[DaNNy001]

While Bitcoin ETFs offer several advantages for investors, they come with notable limitations:

You are comparing the advantages of BTC with BTC ETFs which is not a good comparison because, in every aspect of life, BTC has more benefits than BTC ETFs have. Because BTC provides us the features of decentralization, anonymity, and security, and we get to experience the real features of BTC for example we set up wallets by ourselves, we make accounts on exchanges by ourselves, and we are the real owners of our assets all the time. We are the ones responsible for our assets.

But those who are into BTC ETFs can't enjoy these features because ETFs are centralized and not under the control of buyers, we are just giving our money to Fidelity and other ETF trading platforms and not even buying the real BTC. In short, I would like to conclude that we should not think of BTC ETFs as real BTC so we should not hope to experience the same features as well because both are two different things with different purposes nad functionality.

Other than this, the disadvantages that you have mentioned are real ones, but you should talk about the real disadvantages of BTC ETFs only rather than comparing it with the real BTC.

And yet many people still talk about the Bitcoin ETF as some kind of savior that would give rise to many things in terms of advantage as people were fucking eager for it's acceptance long before now and now that it's been accepted, I have not seen the positive trend that people were so busy rambling about instead the market is still quite the same and  like you have said comparing the two is just like making downgrade to the real Bitcoin and I believe most people will also agree to this note.
 

I wonder sometimes why would any actual Bitcoin enthusiast go against exactly what he is she has been against or the core concept of Bitcoin is against which is our money being controlled by an central entity and that's all it is with Bitcoin ETF.

[Dr.Bitcoin_Strange]

Everything that has an advantage usually has disadvantages. As far as I'm concerned, I don't quite like the BTC EFT because it's not a decentralized system. Investors on the ETF would likely have their identity known, which IMO is not really safe. A question I asked myself one day regarding these was: what if the SEC decides to bring up any new rules against known Bitcoin holders due to this ETF? The future is quite unpredictable, and anything could happen. It's more safe to invest in Bitcoin and hold it in your own custodial wallet because, like the first comment said, there is one great rule of investing in Bitcoin, which is not your key, not your coin.

[pawel7777]

I don't quite like the BTC EFT because it's not a decentralized system. Investors on the ETF would likely have their identity known, which IMO is not really safe. A question I asked myself one day regarding these was: what if the SEC decides to bring up any new rules against known Bitcoin holders due to this ETF? The future is quite unpredictable, and anything could happen. It's more safe to invest in Bitcoin and hold it in your own custodial wallet because, like the first comment said, there is one great rule of investing in Bitcoin, which is not your key, not your coin.

These are fair concerns, but as long as there's an option for investors to hold bitcoins in their own wallets - I wouldn't be that worried, especially when there's nothing we can do if certain people prefer to invest via ETFs.
What bothers me is that this could encourage regulators to try to force people into investing and using bitcoin only with approved entities and delegalise the use of non-custodial, non-KYC wallets. But that's a part of a wider problem of governments usurping more and more control while people are passive and offer no resistance.

[Ambatman]

Another fancy word to call a CEX.
Bitcoin ETF goes against two of the beauty's of Bitcoin, Decentralization and privacy. Yes it has brought about some element of  legality in  Bitcoin in the eyes of the public or i would say quicken the process but i would ask is the short to mid term benefit worth the possible deficit in the long run?

[Charles-Tim]

@onusplatform
You need to include centralization and lack of privacy. Bitcoin is decentralized and you can use it and have privacy if you know the ways you can have the privacy like the use of noncustodial wallet with Tor and decentralized exchanges. With bitcoin ETF, no privacy and also it is centralization.

Another fancy word to call a CEX.

CEX means centralized exchanges. Centralized exchanges are still better because you are buying an selling bitcoin on those exchanges and not shares pegged with bitcoin price in the stock market using bitcoin spot price. Centralized exchange truly deprive people from privacy and it is centralized, but bitcoin spot ETF is worse than that because it is not bitcoin that people are buying and selling directly.

[NikeFit_7777]

Found a very interesting graph. Pay attention to the events and the aftermath of them. But the funny thing is, if you look at the price now (it went down), it really becomes more interesting to pay attention to such pictures.

Is it manipulation again? Have we all been duped again?

P.S. This is not a call to any action. Take the risks on your own.

[Fivestar4everMVP]

While Bitcoin ETFs offer several advantages for investors, they come with notable limitations:

Management Fees: ETFs typically charge annual management fees, reducing the profits for those holding shares in a Bitcoin ETF compared to direct trading on cryptocurrency exchanges.

Trading Hours: Bitcoin ETFs are only available on the stock market and depend on stock market opening/closing hours. This limits the flexibility of trading for investors compared to the cryptocurrency market.

Lack of Payment Functionality: Unlike Bitcoin, Bitcoin ETFs cannot be directly used as a means of payment in some countries, reducing its flexibility as an investment asset.

ETF Price Discrepancy: The price of a Bitcoin ETF may deviate from the actual value of Bitcoin due to the imbalance between supply and demand, potentially leading to inaccurate buying/selling prices.

ALL this you mentioned as the advantages of Bitcoin ETF possibly have no effect, or minimal effect on the holder of real bitcoins bought from an exchange or mined, let those who are buying the ETF version of bitcoin face or deal with this disadvantages, after all, I believe that we or most of us already know that nothing comes from the government free of charge.

Those buying the ETF version of bitcoin will definitely at some point in time have to compare the advantages and disadvantages of buying and holding the real bitcoin to the advantage and disadvantages of buying the ETF version, after weighing the two, it will be up to them to choose is more or most profitable for them, for me, I have no business buying bitcoin ETFs.

[Hamza2424]

While Bitcoin ETFs offer several advantages for investors, they come with notable limitations:

BTC ETFs comparison with BTC itself in the context of disadvantages, this looks unfair, because BTC ETFs don't stand a chance in front of BTC itself. As BTC is decentralized, secure, and it requires people to set up all the accounts by themselves, they have to put the real efforts of creating the account, wallets, and then taking the responsibility of storing the funds, keeping the funds save from  hackers, and keeping the seed phrases save. Those who directly trade, or deal with BTC they have to do a lot of homework but those who are trading with BTC ETFs they don't have to deal with any of this.

And I am counting this as not a disadvantage of BTC in comparison with BTC ETF, instead these work that we have to do is a benefit for all of us, we must know the reality of blockchain, and we can know it once we experience it by doing it practically. By the way I like your post, it is good for newbies to understand the pros and cons of BTC and BTC ETFs.

[jeraldskie11]

Management Fees: ETFs typically charge annual management fees, reducing the profits for those holding shares in a Bitcoin ETF compared to direct trading on cryptocurrency exchanges.

I don't see a disadvantage of having a management fee because you will only pay it yearly. It just only a little amount of funds compare to your potential annual profit.

Trading Hours: Bitcoin ETFs are only available on the stock market and depend on stock market opening/closing hours. This limits the flexibility of trading for investors compared to the cryptocurrency market.

In my opinion, there is nothing to worry since it is normal to the stocks to have a closing hours especially if you trade stocks before.

ETF Price Discrepancy: The price of a Bitcoin ETF may deviate from the actual value of Bitcoin due to the imbalance between supply and demand, potentially leading to inaccurate buying/selling prices.

I think it's normal to have a little bit of differences as long as the price is not glitching.