Skip to content

Bitcoin ETF

Bitcoin ETF

Have you heard the news? There are now Bitcoin Exchange-Traded Funds (ETFs)! I can hear your head scratching from here but don’t worry. Matt and I are here to break down these new trade floor offerings on this week’s episode and give you the information you need to make an informed decision when it comes to investing in this new product.
 

What is a Bitcoin ETF?

Let’s start by breaking down Bitcoin and ETFs. In a prior episode, we talked about cryptocurrencies in depth and how buying into them is more speculation than investing. At the time, two and a half years ago, cryptocurrencies were dangerous due to their associated risks, including regulatory, security, insurance, fraud, market, and liquidity. That hasn’t changed much in the meantime. We also did an episode on ETFs. In it, we discussed how ETFs are wrappers for financial products. So what is a Bitcoin ETF? Essentially, it is an easier way for you to enter the cryptocurrency market.
By purchasing a Bitcoin ETF, you gain exposure to cryptocurrencies without the complexities of directly buying, storing, and managing the actual “coins.”
 

Features of a Bitcoin ETF

Here’s a summary of how they generally work:

  1. Structure: Bitcoin ETFs are traded on traditional stock exchanges rather than cryptocurrency exchanges.
  2. Underlying Asset: The ETF might be backed by actual Bitcoin holdings (physically backed), or it may use derivatives like futures contracts to track Bitcoin’s price (futures-based). These new Bitcoin ETFs are set up to hold actual Bitcoin, so you do not have the peculiarities of Future contracts.
  3. Accessibility: Since it’s traded like a stock, investors can buy and sell shares of a Bitcoin ETF through regular brokerage accounts. This makes it accessible to a wider range of investors who may not be familiar with or comfortable using cryptocurrency exchanges.
  4. Regulation and Safety: ETFs are regulated financial products, which means they are subject to the oversight of financial authorities. This provides a level of security and legitimacy that direct cryptocurrency investments may lack.
    1. Custodial security: Your ETF is held by a Custodian (i.e. Fidelity) that is regulated by the SEC and has insurance against fraud
    2. Avoidance of technical complexity: Trade it like a stock, and you own Bitcoin.  You do not have to create new digital wallets, accounts, cold storage or any of that.
  5. Risk Management: Investors get exposure to Bitcoin’s price movements without dealing with the risks associated with holding the cryptocurrency, such as hacking or loss of access to their wallets.
  6. Tax Efficiency: For some investors, particularly in certain jurisdictions, investing in a Bitcoin ETF can be more tax-efficient than holding Bitcoin directly. Basically, the reporting is the same as your other investments – Bitcoin will be represented in the year-end report so you don’t have to track the cryptocurrency exchange personally.
  7. Liquidity: ETFs are generally more liquid than holding the cryptocurrency directly, as they can be quickly and easily traded during market hours.
  8. Fees and Costs: Investors should be aware of the fees associated with Bitcoin ETFs, which might include management fees and the potential costs associated with the fund’s method of tracking Bitcoin’s price.

Now that you know what a Bitcoin ETF is, you can make an informed decision about investing in this new technology.

Transcript

Transcript
matt-robison_1_01-15-2024_092826:00:00:00

Hey Mike. You know what’s on the word salad today?

Track 1:00:00:03

salad

matt-robison_1_01-15-2024_092826:00:00:04

Bitcoin ETFs. Hey, it’s financial life planning. I’m Matt Robeson with Mike Morton, my my expert who’s about to explain to all of us what that word salad means. Is it full of cherry tomatoes? Is it full of that’s good for me financially? I, Mike, how are you and, wait, you wanna talk about Bitcoin ETFs? I understand maybe some of the syllables in that.

Track 1:00:00:30

A few of the letters. Word salad. Where do you come with Word salad.

matt-robison_1_01-15-2024_092826:00:00:34

It’s, um, that’s the problem with dressing isn’t salad dressing basically what you put on to make sure that food that would otherwise seem rancid seems less rancid

Track 1:00:00:47

right. Actually it has some taste to it, some flavor. Right.

matt-robison_1_01-15-2024_092826:00:00:52

tell the Paul Newman people, but like salad dressing is

Track 1:00:00:56

No salad dressing is the part of the salad that you need. It dress, it dresses the salad. Otherwise, I mean, what do you have? Just a bunch of raw vegetables,

matt-robison_1_01-15-2024_092826:00:01:06

thing, I know all the cooks out there are like, is important, but like shouldn’t, the underlying food taste good.

Track 1:00:01:14

I mean, that’s why we have a whole of food industry. Matt, how are you gonna make iceberg lettuce taste good?

matt-robison_1_01-15-2024_092826:00:01:24

although it does remind me of that awesome SNL skit from like 20 years ago where they decided to sell a new product. They called it shredders and it was just iceberg lettuce shredded in a bag and you’re just like stuffing it in your mouth. ’cause it’s like, do enough advertising behind something. It can and it can be a meme, which is basically how I feel about Bitcoin. I feel about crypto, right? Like the, when we last left our heroes on crypto, I was pretty sure that what happened was Matt Damon endorsed it that caused it to immediately crash, sorry, Damon fans and, uh, also Sam Bankman Free went to prison. Michael Lewis did an awesome podcast about it, and everyone was pretty convinced that it was a scam. Um, but you, a responsible, knowledgeable financial planner who has only recently talked in jest about money laundering. Bitcoin ETFs is a thing. Like are you putting salad dressing on a scam? Is that what you’re doing here?

Track 1:00:02:26

Have you been, have you been hiding under a rock, Mac? Come on. Bitcoin et s has been in the headlines for the last few weeks. headlines. The headlines. what journals do you read?

matt-robison_1_01-15-2024_092826:00:02:41

a rock is stupid. Like a rock is the worst thing to hide under. Like if you’re playing hide and seek, don’t hide under a rock. Bits of you are going to stick out unless you have an unusually pliable rock. But this is actually a thing you’re

Track 1:00:02:53

A really big rock.

matt-robison_1_01-15-2024_092826:00:02:55

Really, really big rock. Which will You Yes.

Track 1:00:02:59

Right. Alright, let’s talk about this Bitcoin.

matt-robison_1_01-15-2024_092826:00:03:02

thing. This is a, real thing.

Track 1:00:03:04

this is an actual real thing, you know? This is great, Matt. I’m glad we’re doing this episode so I can inform you what is going on in the world. So there are things called Bitcoins and there are things called ETFs and we’ve mashed them together. So now we have Bitcoin So let’s walk through. What are these things?

matt-robison_1_01-15-2024_092826:00:03:21

this. Yeah, let’s

Track 1:00:03:22

My favorite podcast expression. Let’s unpack this.

matt-robison_1_01-15-2024_092826:00:03:30

explaining this to me, 2-year-old. So Bitcoin, in all seriousness, I think I understand it is a cryptocurrency. It’s the most, well-known cryptocurrency. Any update to that since my last understanding is that pretty much it.

Track 1:00:03:43

No, that’s it, man. Yeah, it’s cryptocurrencies. There’s these digital coins. they live on the internet. They’re very safe and secure. From that standpoint, they’re, that’s where the crypto comes from, which is pretty cool that you have these public, private keys. They’re very. safe and secure from one standpoint, from a cryptography standpoint, you can’t easily, replicate them or fake them. So that’s what the cryptocurrencies are. Bitcoin is the most, infamous, famous, and has certainly been volatile, over its lifespan so far, and is reaching, new highs. But that’s what cryptocurrencies are and Bitcoin is the most famous and no real updates, since your understanding of three years ago, Matt.

matt-robison_1_01-15-2024_092826:00:04:21

some great reporting out there about how seemed to believe that, ooh, it’s on the internet and the word crypto, which means secret, I guess, is involved. That means I can do all my secret stuff using cryptocurrencies. Turns out that the whole point of cryptocurrencies is that there is an. Unbreakable digital ledger that you cannot fudge. And so actually it’s the worst way to do illegal transactions because you can actually like trace this stuff back. But anyway. Sidebar. Okay. Bitcoins, I get that part. ETFs, we’ve done episodes about this actually a really interesting one where you explain the difference between ETFs, mutual funds, it’s a wrapper. Maybe you could just briefly retread that for us.

Track 1:00:05:06

Yeah, exactly. These are wrappers around investments. What that means is you go onto Fidelity or Vanguard or Schwab, and with one button you can buy the whole s and p 500, right? So you can invest just a thousand bucks and buy all 500 companies. You can do that in a mutual fund and version, and you click that button and it’s got some ticker symbol and mutual funds. Trade once a day. They have all certain, aspects to them. Alright? They trade once a day. All right, so you’re settled. It’s called settling at the end of the day. So your a thousand dollars gets invested once a day. And there’s other, nitty gritty details about the mutual funds, and they’ve been around for, 80 years or more ETFs, another version. You can click a button and buy the s and p 500 in the ETF version. These trade during the day, so all day you could see it go, up and down your trade executes immediately. And there’s other benefits of the ETFs. They’ve been around for 20 or 30 or 40 years, so quite a while, but gained popularity recently. The biggest thing you want to know from this,, I recommend using ETFs in basically all cases because they’re more tax efficient. And they tend to be pretty low cost, very low cost as well. So no, no reason to get into the details of mutual funds versus ETFs. You can check that episode. If you’re interested. Take away, use the ETF versions in almost all cases,

matt-robison_1_01-15-2024_092826:00:06:24

explain to me. Finally then, what is a Bitcoin ETF?

Track 1:00:06:28

Bitcoin, ET, F. So now we know Bitcoins are digital currency. You can click and buy them, online. And ETFs are a wrapper around assets. You can buy all 500 companies. So that’s what it is. It’s an ETF version, a wrapper around holding Bitcoin. So before a few days ago, we’re recording this, middle of January. There was no. Way to own Bitcoin other than go to Coinbase, or one of these other exchanges won’t mention, Sam Bankman Free’s Exchange, but you have to go to an exchange, put in your money there, so transfer your a thousand bucks from your checking account into that online place. Then place a trade to buy the Bitcoin. Then you have it in, a wallet. You can keep that wallet online, you could do it offline. So there’s all these technical steps, how you would actually own a thousand dollars of Bitcoin. Now you can go to Schwab or Fidelity or other brokerage places, and with a single trade, like you buy the s and p 500, you can click the button to buy an ETF that holds the Bitcoin. All right? So you buy a thousand dollars of an ETF, and you own a thousand dollars of Bitcoin.

matt-robison_1_01-15-2024_092826:00:07:37

I’m trying to decide what, ultimately, I’m trying to decide whether this is good or not. We’ll get to that in a little bit, but, so I don’t have to muck around if I’m curious about investing some money in crypto, I don’t have to muck around with understanding, okay, I have to buy Bitcoins. What does that mean? I can do this through. An institution that I trust, that I know that is like a name brand that probably advertises at Boston Celtics games and click a button and they’ll kind of do all the nitty gritty for me and I’ll hold some kind of a fund that basically does that and that goes up and down in value based on some underlying thing tied to bitcoin.

Track 1:00:08:18

That’s it, Matt. Wow, you just explained that so well. That’s exactly it. So now you can own Bitcoin without having to navigate. All those, previous difficulties if you wanted to. So now there’s called a spot price. You might hear that word spot price, Bitcoin, ETF. There’s eight or nine different flavors that all launch. The BlackRock has one, fidelity has one, so there’s different, providers of the ETFs and you can go and get the ticker symbol and in a few clicks just in your 401k or your brokerage at one of these big places, you can now own through the ETF.

matt-robison_1_01-15-2024_092826:00:08:51

right. let’s get into the sort of the regulation of all of this, because one of the problems that. The entire crypto sector is it, has it reached the point where you can call it a sector like it’s a thing? One of the problems that it’s faced so far is just read any like popular of it and they’ll say it’s a wild west. I don’t know what that means exactly, but it means that people haven’t really figured it out. It’s new enough. There’s shady operators. There’s operators who seem on the up and then turn out to be shady, like Sam Bankman freed and makes people like me who are, really vanilla investors, very nervous. Why would I wade into this? this regulated the way that other things that I might invest in are regulated? Or is this still the wild west?

Track 1:00:09:48

Well, it’s both. All right. First of all, how can you not know what the Wild West is? Don’t you watch any Western movies? Don’t you understand what the Wild West is like?

matt-robison_1_01-15-2024_092826:00:09:59

and he explained that perceptions of the Wild West, like Dodge City, wildly overinflated, because there was a whole generation that grew up watching gun smoke. In which there were, like, the murder rate on gun smoke was like a thousand people an hour. And it turns out that in actual Dodge City, it was like one per year. so the Wild West wasn’t as wild as people make out. also in that documentary, back to the Future, part three, turns out that Biff 10 and wasn’t as, anyway, that’s a whole other story. I mean, I, I think I know what the Wild West is, but maybe I’m Maybe crypto’s safe.

Track 1:00:10:30

Oh, no, no, don’t say that. So it’s definitely some of both. So now you have your, it’s definitely terrible. No, it’s definitely some of both. Wild West and regulated. So, because the underlying asset, we’re talking about Bitcoin, we’re talking about a cryptocurrency. That is still what it was. That’s what we said at the outset. you can still have questions. Is it valuable? Why is it worth $46,000 a coin? who’s using it? What’s the use case? what’s it gonna be, in the future? will it go up or down in value? So there’s a lot of speculation, there’s a lot of volatility, and that’s what you’re owning. So if you buy one of these ETFs, you are owning Bitcoin, all right? And it has the volatility and it has those questions still, same as it had. Three months ago, or one week ago before these products existed on the other side, it is regulated because now they’re ETFs. So the ETF you buy is regulated by the SEC. All right, so the wrapper around it, the providers of it is a regulated industry rather than Coinbase. Coinbase is totally unregulated. Okay. versus, fidelity and ETFs fall under the SEC and so there’s a lot more scrutiny. That’s why the SEC had to approve these ET TF versions, making sure these companies are gonna do the right things and follow policies and procedures.

matt-robison_1_01-15-2024_092826:00:11:47

of the cryptocurrency world. It’s like, you know, it’s, you’re not getting direct exposure to all the crap in cigarettes. It’s still kind of a nicotine addiction though.

Track 1:00:12:00

yeah, maybe, but I, I still think,

matt-robison_1_01-15-2024_092826:00:12:04

things that I find them together maybe

Track 1:00:12:08

Uh, yeah, that’s right. No, it’s so good. I think, just because it’s in an ETF, you’re still buying the thing, so that’s what you have to decide. you can buy, oil companies, you can buy, gold, you can buy all kinds of stuff, with a few clicks of a button through your large brokerage houses, and then you own that thing. And so you still have to decide like. Is this something I want to own? Why it’s important to bring up in this podcast. I wanted the listeners to be aware of what the Bitcoin ETFs are, so we’re covering that and also that they’re gonna be out there. Unlike you, Matt, I’m sure many of my listeners, see these in the news, and are curious like, is this something that we should be investing in? And so, we’ve covered the basics. What’s Bitcoin we know and what’s an ETF? We know and we can get into, more. Is this something that makes sense in your portfolio? my belief is. Probably not. That’s my general recommendation because I’ve been on Bitcoin, like, should I invest in Bitcoin? I don’t really see a need to do that. It could go up, down, or sideways. I really don’t know. but I feel like we’ve, said on this podcast by having low cost index funds, I am a much more believer in owning companies that make products and services that we enjoy, that people spend money for, that, tend to grow in value. versus Bitcoin is much more speculative

matt-robison_1_01-15-2024_092826:00:13:22

brought up the term use case before and I think that’s very helpful in this context. There are. People out there. And I don’t mean to demean Crypto Bross. No, wait, I take it back. I mean to Dere Demean Crypto Bros. But there are people who are, I’d say evangelists for cryptocurrencies who will argue there are use cases. There are ways that people could make use of cryptocurrencies that are valuable, that enable you to do things that you can’t do with traditional currencies. I’ll leave those arguments aside. That’s really not for this show. I have my thoughts about them. I’ve covered that on my podcast, beyond Politics, with an expert in this field. But what you are bringing up is a specific U use case for your clients, which is I. Crypto has always been one of the main uses is as a speculative investment. It has volatility and one of the criticisms of crypto is actually well covered on John Oliver’s show is it’s always felt a little bit like a Ponzi scheme. Financially. There are crypto evangelists who, there’s actually a meme for it. It’s Ho, Ho, and it’s from a one time misspelling of the word hold. And when it got misspelled, everyone was like, oh, no, Hodel. That’s cool. And it also doesn’t seem like we’re scamming you as much. The idea is, okay, all of you guys hold onto this investment. We might not because we, the people who are telling you this, wanna cash out. But you definitely should. Right? And so there’s been this, I don’t know, it, it, it’s felt like if you wanna speculate. for it. It’s your money, you can do it. But there’s a little bit of a scammy feel to it. And what you’re saying is that at least with these Bitcoin ETFs, there is some regulation, there’s, you’re exposed to the volatility of the sector without having to muck around and actually the underlying asset. And if you wanna do it. you can vape it. If you really need the nicotine, you can vape it through these ETFs rather than it, but it’s still, that doesn’t address the underlying question about whether this is a good investment. What you’re saying is if you’re interested in it, this is maybe a better way to do it.

Track 1:00:15:40

Well, it’s definitely a way easier way to do it, if you’re interested in it. And I do know lots of advisors that will give recommendations of holding one to 5% of your investments in Bitcoin, or one of these Bitcoin ETFs. And the reason why is because it’s such a volatile asset. So by the volatility. You know, if that 1% doubles, like this asset has doubled in a year, I mean, multiple times now it’s gone down, 50% or more in a year as well. But if you’re 50 grand, 1%, goes to a hundred grand, then you could trim it back to 50 grand. and you just made, you just made $50,000, and it’s a very small percent of your portfolio. And if it goes down, if it’s only one or 2% of your portfolio and it goes down, you’re not really losing a whole lot. That’s the argument. and so volatility can be very helpful from a overall, portfolio standpoint. And we can get in, we’re not gonna get into the mathematics of that, but just suffice to say, I’ll say it again. Volatility can be very good thing. For an overall diversified portfolio, you can take advantage of the real ups and downs. The more volatile something is, could boost your portfolio. Even in the ups and the downs, you buy it when it’s down, and it doubles when it goes up. Now also say this, Matt, in terms of assets and investments, we could, relate this to gold. Right now gold is a physical thing that is used in jewelry and other, electronics. But still, right? There’s a vast amount of just investing in gold. I just hold some gold, either gold coins, gold bars, gold. It goes up and down in value and people hold it as part of an asset and it’s not really useful. It’s not like we’re going around exchanging gold coins. It all goes back to sort of dollars, but people still treat that as an asset. So why would Bitcoin. Necessarily be any different. It could be something that just holds value and goes up and down and people trade it and it’s just there. Kind of like digital gold.

matt-robison_1_01-15-2024_092826:00:17:31

a sugar breakfast cereal, and they’re like, fruit loops are part of this complete breakfast. And the complete breakfast includes eggs, fruit, fruit juice, vitamin supplements, a defibrillator, and it’s like. Yeah, the complete breakfast is what you want. If you wanna have some dessert with your breakfast, have some fruit loops, it feels like that’s your investment strategy, which is look low cost index funds. that’s what I recommend for the, these are your bananas for breakfast. you wanna have some fruit loops and you’re gonna speculate. Sure. Bitcoin ETFs.

Track 1:00:18:02

I could, I could see you’re not a fan of Bitcoin, my friend.

matt-robison_1_01-15-2024_092826:00:18:08

that either. No. I mean, in all seriousness. In all seriousness, no, I’m not, but. I hear the same strain in what you’re gold, which is you wouldn’t recommend gold investment as the base load of your investment portfolio. You’re, you’re speculate a little bit, you could speculate REITs, you could speculate in, you know, like. Turkish. I was about to say Turkish bathhouses. I don’t know why that was the idea that came to my mind. It’s like, why would you speculate on that and why is that a thing? in all kinds of like wild high volatility stuff. could be your thing. It’s just, it’s not the complete breakfast, it’s your dessert.

Track 1:00:18:46

Maybe, Hey, I’ve got a spoiler for you, Matt. I own one of these ETFs.

matt-robison_1_01-15-2024_092826:00:18:54

you’re a junkie.

Track 1:00:18:56

I know,

matt-robison_1_01-15-2024_092826:00:18:57

Do, does your

Track 1:00:19:00

and I’ll tell you why.

matt-robison_1_01-15-2024_092826:00:19:01

Do you look at at night and

Track 1:00:19:03

Yeah. Yeah. Yeah. Yeah. I’m got the diamond hands. Hodel,

matt-robison_1_01-15-2024_092826:00:19:10

why, This is like finding out night you secretly, I don’t know, go to a gambling den and play high stakes poker. Like really you do. Why?

Track 1:00:19:18

I do. I’ll tell you why. First, I’m very curious what happens in the next, Three to 12 months because of, I do think that because these have become ETFs and the chatter around Bitcoin and cryptocurrency, and now the access not only for individual investors, but institutional investors, I. that have bazillions of dollars to put in 1%, 2%, 5% into one of these alternative asset classes that has volatility that I told you from a portfolio perspective, can boost returns just the volatility by putting in a little bit, I dunno, I have no idea. It could get cut in half, it could go double. I mean, in the last three to five months, Bitcoin has doubled in speculation that these ETFs would come out. and so if we had done this three or four months ago before these come out. in other words, a lot of money will be pouring into these ETFs, which pours into having to buy Bitcoin, you know, ’cause they hold Bitcoin underneath. So this is purely speculation. On my part, and it’s purely market dynamics of looking at, hey, I think a lot of money will flow into these and could boost that. Now I have an exit strategy, speaking of Annie Duke and, get your exit criteria. So, you know, yeah, quick criteria. So I definitely have that, you know, if it goes up enough and in, in one to three months, or if it goes down, I’m gonna get out. It’s not a big deal. The other reason, to be honest, why I got in is because I’m gonna be hearing a lot about this over because of. The work that I do, I’m gonna be hearing a ton about this from my friends, colleagues, clients, and so I just put some skin in the game personally just to get, exposure and to follow it and to get some real world experience, not a lot, just a little bit to, to be in there.

matt-robison_1_01-15-2024_092826:00:21:01

about 90 seconds ago, I was like, yeah, I too am investing. I was like, there’s no way you’re coming out of this in a way that I’m gonna think makes sense. I, I’m gonna think this is asinine. take it back actually, that makes a lot of sense to me. Can we put a bow, I, I seriously want to propose putting a bow on the portion of this discussion that is meant to be useful for your clients and for listeners who are interested in this. I think I get the message this is, it’s an option. It’s a wrapper on Bitcoin. You don’t need to muck around with actually getting into buying crypto. It’s easy if you wanna speculate. This is a good way to do it. Maybe you’re interested in that. Do you agree? Like, does that basically sum up the useful portion of the discussion? I wanna reserve two or three minutes for an unuseful portion of the

Track 1:00:21:45

Oh, I’m looking forward to the unuseful part of the discussion. Usually our best part, totally agree with you. This, that, that was a great bow on it. I wanted the listeners to be aware it’s gonna be in the news. you’re still owning Bitcoin. I’m not a believer in the cryptocurrencies. I do think they have a lot of great use cases, but none of them are proven. I have no idea which way they’re gonna go. I wouldn’t put long-term investments, into cryptocurrencies at this time. So, yeah.

matt-robison_1_01-15-2024_092826:00:22:13

I’m reminded, as you described all of this, of that scene in Trading Places where Eddie Murphy says, Mr. Valentine says to the Duke Brothers, wait, I. Y’all are a couple of bookies. That’s the way I feel about this financial product, and if I’m honest with you, man, that’s the way I feel about a lot of these financial products. Right after the crash, the Wall Street crash, 2008, the start of the great recession, I was talking to a friend of mine who was on Wall Street and I was like. collapse of these credit default obligations and these mezzanine CDOs and these unbelievably exotic, you have to work on Wall Street and be a quant and have a PhD to understand them financial products I. It’s sort of exposing that there’s no there, there, there’s no underlying value to the economy, to the real world in these financial products. They’re created by and for Wall Street insiders who really want ways to gamble and have an inside edge, it’s like high frequency, high speed traders who have that direct. T one line, like high bandwidth line right across the river, so that they can get femtosecond advantages. This is a thing, you can look it up if, if you haven’t heard of this. They can get these minuscule fractions of a second advantages over the rest of us, and that enables them to make more money. Why do they get to do this? There’s no reason. It’s just insiders dealing financial advantages to insiders. My Wall Street friend said, no, no, no. kinds of products are important because they allow us to diversify and to hedge against risk and all of this stuff that I don’t want to offend our sensitive eared listeners, but it just sounded, and my friend listens to this show, so I hope I’m not offending him. It kind of sounded like bullshit to me, you know? So Mike, is all of this bullshit, like I get what you said in the serious portion of the show that, it’s volatile. People wanna speculate with a portion of their portfolio. This is as good a thing to do as anything. And you could make a buck, you could do really well. But isn’t this just legalized gambling?

Track 1:00:24:29

I totally agree with your entire rant. I, wall Street is, yeah, and I could go on one too. Wall Street is is made to make money off your money. I mean, it’s a whole industry to make money. Off your money. All right. Now it wasn’t necessarily always the case but that’s the way it is. So that’s why they come up with the product. Now, I think the Bitcoin ETF is a really great example because it’s actually easy to understand. We understand Bitcoin, we understand ETFs, and you just kind of mash ’em together. Okay? Easy access to Bitcoin. That kind of almost makes sense, like you can understand it. So that one I don’t have as much a problem with as everything else because everything else, like CDOs, I mean, you get into insurances, Matt just go off the rails like, you know, you can get these variable annuities and are they indexed or unindexed? And you can get, whole life that has all kinds of bells and whistles, around it. And here’s the point, if you don’t understand it, don’t buy it. All right? If you don’t understand it, don’t buy it. Now, the Bitcoin, ETF, hopefully you now understand, do I want to own Bitcoin? I could click a button and buy it, but these other things that come up, if you don’t understand it, don’t buy it. And Wall Street is there. To make a buck off your box. All right? That’s why we just say low cost index funds, set it and forget it. because that’s the way that you can come out ahead. Now, of course some people will come out ahead with the complexity the same as gambling, right? Some people come out ahead, most people don’t. You know, the house tends to win, but that’s what Wall Street is. And last point on that, for your friends, people in the industry, of course. You are incentivized by whatever your means are, whatever your industry is, however you are making money and the part of the industry that you’re in, that’s how you’re incentivized. And again, that’s why we had the fee only, discussion. Like who should, have as an advisor? You want someone that doesn’t have incentives. They’re great people. But if I get 3000 bucks for selling you insurance met, I really think you need to protect your family.

matt-robison_1_01-15-2024_092826:00:26:24

First of all, I love your underlying message, which is if you don’t understand it, don’t buy it. Like you might be at a disadvantage. That makes sense. And my only point as a kind of response to your counter response to my rant that’s highly derivative is that. I think it’s okay that there’s a lot of gambling involved here, unlike going to Vegas, unlike actually going into a casino. Yes, the house wins, but we all win too. That’s part of the message of your show. This is part of the message of what you do as a financial advisor, which is there are ways that we all win by following sound investment strategies over time. We save and we make massive amounts of money and that is. Great. That’s wonderful. This is how I intend to retire and put my kids through college. I’m just making a call for transparency and for recognizing that these more exotic financial instruments are ultimately about a scheme that benefits other people more than us. And so I just go take it full circle to where you started off, which is, I agree. This isn’t actually that complicated. There’s Bitcoin, there’s ETFs. It’s a speculative investment if you wanna make it. We don’t know a lot. There’s not a lot that we can tell you about the underlying volatility. There’s not a lot we can tell you about what history says is likely to happen here and what is likely to influence the price up or down? we don’t know. It’s relatively new. If you wanna speculate, buyer beware, go for it. You’re definitely walking into the casino. I just think that it’s, it’s worth bearing in mind that, this is a system that is set up to be deliberately obscure and hard to penetrate and understand, and that’s why I really appreciate your constant drumbeat of, look. There’s a way to, game the system too, which is use the lowest cost stuff out there, the stuff that has the track record. You will win, you’ll go into the casino and you’ll actually win.

Track 1:00:28:25

Yeah, focus on what matters, man, and ignore the rest.

matt-robison_1_01-15-2024_092826:00:28:31

in my rant for a second there. and, good explanation of, vaping for Bitcoin. All right, Mike Morton, I’m Matt Robeson. We will see you next time.

Track 1:00:28:39

Thanks, Matt.

Never miss a post!

Related Podcasts

Bitcoin ETF

Episode 132 •

30th January 2024