1. What is the principle behind institutions buying Bitcoin ETFs as a way to hold Bitcoin?
ETF stands for exchange traded fund. It first emerged in the traditional financial sector, with many products (such as index ETFs) being typical examples. This approach has gradually spread to other areas, such as gold ETFs, oil ETFs, and now Bitcoin and Ethereum ETFs.
Taking Bitcoin ETFs as an example, an institution wishing to issue a Bitcoin ETF must meet certain conditions, such as:
The institution must hold an equivalent amount of physical Bitcoin assets, which is the most direct "physical replication";
The institution can also hold other "physical"/financial assets or various derivative tools linked to Bitcoin.
Regardless of the techniques used by the issuing institutions, the key feature of the Bitcoin ETFs they issue is that the ETF price must closely track the price of Bitcoin.
Therefore, when a buyer (institution or retail investor) buys a Bitcoin ETF from the issuing institution, since the performance of the ETF closely tracks Bitcoin, the buyer is effectively buying an equivalent amount of "Bitcoin".
The advantage of ETFs is the convenience of trading, without the need to physically hold Bitcoin. The downside is that the buyer does not truly hold the physical Bitcoin, but rather holds a financial asset whose value is backed by the credit of the issuing institution. If the issuing institution runs into problems, the asset value would be zero.
Bitcoin ETFs essentially convert Bitcoin into a fully centralized financial asset after a long detour.
2. Why has Grayscale been constantly selling value coins?
I only see Grayscale's holdings as a reference, and even then I only look at their Bitcoin and Ethereum holdings. Their holdings of many other coins have little significance to me.
In my view, Grayscale, like BlackRock, is just an asset "sales" company on Wall Street. They also talk about the value of crypto assets, but they do so only to better sell their products, not because they have a deep understanding or foresight of the crypto ecosystem.
These institutions love to talk about how Bitcoin will reach $500,000, $1 million, $10 million by a certain year...
These statements cannot be said to be wrong, but they are not very meaningful.
Hearing the same thing month after month, year after year, becomes aesthetically fatiguing. I hardly ever hear meaningful conceptions of future scenarios and development forecasts for the crypto ecosystem from them.
3. A thought-provoking logic, feeling that they are all "playing to their strengths" in their investment mindset.
This is a comment from a reader at the end of the article on September 5th.
I fully agree with this statement.
During this period, whether reading the books of predecessors like Buffett, Munger, Fisher, and Duan Bin, or watching the videos of Duan Yongping and Lin Yuan, I found that although they come from diverse backgrounds, have completely different investment approaches, and invest in completely different targets, when they talk about their own ideas and understandings, they speak eloquently and confidently, with a certainty and determination that seems unshakable.
To achieve this, is it not that they have honed their own strengths to the extreme in their respective fields?
They even only need to stay in their own areas of expertise, without expanding their ability boundaries, and they have already surpassed 99% of the people in that field.
So this also gives us great inspiration.
I have often written in my articles that each of us needs to find our own points of interest in this field according to our own situation, and train ourselves to become experts in a certain niche. If we can do this, we need not worry about finding opportunities that belong to us.
