Many large financial institutions are trying to get a spot bitcoin ETF, which is different from the bitcoin futures bitcoin ETF that already exists in the market. So, let's understand what a regular ETF is.

ETF is an acronym for Exchange Traded Fund.

It's just a nice term for a financial product that investors can add to their investment portfolio.

Breaking down the term "exchange-traded fund" into its component parts, let's start with the word "fund." While a traditional stock represents a stake in a specific company, such as Apple, Google or Amazon, in the case of an ETF we have a fund that includes shares of all three of these technology companies at once. Such a basket fund of shares of these companies can be conventionally called AG or AA.

AG is the first letters of the names of Apple and Google

AA - the first letters of the names of Apple and Amazon

So it's a mix of a basket of Apple, Google and Amazon stocks. That is, you can easily invest in an entire industry or set of different companies with an ETF. Moving on

Now for the meaning of the word "exchange-traded" in the term ETF. To allow other investors like us to own shares of this fund, it is listed on an exchange, such as Fidelity or E Trade. Therefore, we can buy and sell shares of the fund like regular stocks.

So investing in an ETF allows us to get the combined returns of three companies at once, without having to buy shares of each of them individually. This means that we can essentially invest in ETF shares like we would invest in any other regular stock on the exchange.

Now let's quickly understand the difference between futures, spot and shortingETFs on bitcoin. And then let's explore the implications of approving a spot bitcoin-ETF.

In this article, I will tell you what a spot bitcoin ETF is, the implications of its approval, and how Wall Street, the Fed, and the U.S. government will try to use it to gain complete control of bitcoin and the crypto markets.

What are bitcoin ETF futures?

ETF futures are futures contracts, that is, agreements in which the seller and buyer commit to exchange a fixed amount of assets at a future date for a fixed price.

Thus, a bitcoin-ETF on futures is a fund that includes such contracts tied to the bitcoin price. The important point is that there are no real bitcoins in its composition!

So, by investing in bitcoin futures bitcoin-ETF, we can buy and sell contracts that specify a specific date, price and volume of bitcoin for future purchase or sale. This allows large institutional investors who cannot directly invest in bitcoin to profit from its growth through futures.

What are shorting bitcoin ETFs?

A shorting ETF, more commonly known as an inverse ETF, is a fund designed to profit from a drop in the value of an asset. Investors use such funds to hedge their portfolios. It is analogous to shorting an asset in the futures market, but without the need to open a special margin account.

Thus, a shorting bitcoin ETF is a tool for making money on a drop in the price of bitcoin, which can also be used to hedge an investment portfolio.

What is a spot bitcoin ETF?

Spot, or spot price, refers to the current market value.

Accordingly, a spot bitcoin ETF is a fund that allows investors to buy and sell bitcoin at the price at that particular point in time. And it actually includes bitcoins that the fund buys, sells and holds.

Why is this important?

There are plenty of people with large sums of money in traditional investment accounts. A spot bitcoin ETF would open up a regulated way for them to generate income from bitcoin. This could give a very large influx of funds from investors who have been waiting for more clarity on regulation.

Approval of a spot bitcoin ETF by the SEC would allow almost any investor or retirement provider to invest in bitcoin through the stock market.

Right now, you have to open accounts in special Sgurto IRAs - a type of retirement account in which the investment portfolio consists of cryptocurrency. But many investors aren't interested and it's complicated. And a spot ETF will make it easier for them to invest in bitcoin without having to learn about wallets and other crypto specifics.

So why has the Securities and Exchange Commission authorized bitcoin futures and shorting, i.e., effectively gambling on its future value, but has yet to approve this simple and straightforward investment vehicle?

Perhaps the Commission is waiting for traditional banks to prepare to compete in the spot bitcoin-ETF market before granting approval. However, now that the world's largest manager of huge assets, BlackRock, and other Wall Street players are planning to be the first to enter this market, an even more shocking scenario is possible.

And so, let's take a look at some interesting points.
Take a look at this tweet from Chris Blec from a year ago, which presents a prediction from an extremely interesting sequence of events.

BlackRock is a huge global company that manages over $10 trillion in client assets. When BlackRock launches a bitcoin exchange-traded fund (ETF) targeting large institutional investors, this ETF could become very successful.

Next, BlackRock could start actively investing in bitcoin development. And will propose to create a new and improved version of bitcoin that is more environmentally friendly. But the bitcoin community will naturally not approve of these changes.

However, BlackRock has enough resources and influence to promote their version to suit their agenda and present it to the world as a new authorized version of bitcoin that they have full control over and lobby to ban the original one. Motivating it by fighting crime and terrorism.

And then get the government to ban the open, neutral and free bitcoin blockchain, which was originally created for the people and cannot be controlled by a single person, company, government or organization. Yeah, that's pretty bad.

What BlackRock really wants, though, is just to completely control bitcoin and make money from it. In their version, for example, they will be able to decide who to sell the coins to.

In this way bitcoin will effectively be hijacked and replaced with a managed counterpart for the benefit of big business and the US government. It will be difficult for people to use real bitcoin because of harassment and bans.

And to make matters worse, as much as it may seem like a conspiracy theory, there is a hidden point in BlackRock's ETF application.

There is no guarantee that the sponsor (BlackRock) will choose the digital asset (bitcoin) that ultimately proves most valuable

This moment suggests possible manipulation of the bitcoin issuance limit and replacement of the original network with a new version.

• The limit of 21 million bitcoins will be removed. That is, the new version of the network will be able to issue an unlimited number of bitcoins. This will greatly devalue the value of each individual coin.
• The old original bitcoin network, in which the issuance of coins is strictly limited, will be blocked and outlawed.
• All bitcoin I/O interfaces from the old network will also be disabled. They will be replaced with interfaces for the new version of bitcoin.
• When exchanging old bitcoins for new ones, you will be given only 0.25 of the new coin for 1 old coin. This is effectively a confiscation of 75% of your funds.

And the authorities will call this fake as "bitcoin" so people won't tell the difference. And the real decentralized bitcoin will be outlawed.

As a result, we will have a system whose issuance is not limited. And bitcoin will be controlled not by users, but by government agencies. The authorities will accumulate a large amount of cheap bitcoins. And the investors of the original network will be deprived of most of their assets.

Essentially, the government will steal real bitcoin at a discount, similar to how they stole gold and banned ownership of it decades ago, in an attempt to accumulate more bitcoin than other competing world powers, because I think they know cryptocurrency isn't going anywhere.

So there's also a suspicion that Gary has specifically disapproved of some bitcoin ETFs. Because then the big Wall Street players would have been able to manipulate the price.

They would start issuing new "wrappers" of these funds with no real bitcoin backing. Thus inflating an artificial bubble. And preventing the coins from appreciating.

This is what they are already doing with gold. There are also a lot of "papers" without real metal. As a result, the price of gold is held down.

Perhaps Gary didn't want to repeat this situation in the bitcoin market. That's why he didn't approve these certain funds, which could lead to similar consequences.

BlackRock want to change the structure of their spot bitcoin-ETF to allow banks and other large investors to create and sell new "shares" of these funds for fiat money. In doing so, investors would not need to buy actual bitcoins.

It's like a company issuing shares of a "gold fund" but not buying real gold on the market.

First Trust is doing the same thing - it wants to launch a similar bitcoin fund that will "track" the price of bitcoin, but will not be obliged to buy coins.

As a result, such funds may "dilute" the limited supply of bitcoin by issuing unsecured securities. This would result in a price suppression, as is currently happening in the gold market due to the large number of "paper" contracts.

Bitcoin was originally created as a new type of asset that people could own directly, without intermediaries. That is, each user would have complete control over their coins.

This distinguished bitcoin from traditional assets like stocks or gold, where ownership is often "indirect" - through brokers, funds and banks.

In recent years, however, bitcoin has become increasingly "embedded" in these traditional Wall Street schemes. Intermediaries like exchanges, lending opportunities and derivatives like futures are emerging.

This compromises the original idea of bitcoin as an asset controlled directly by its owners. Instead, it's just another tool for speculation, as Wall Street is full of.

For any asset - be it gold, apartments or bitcoin - there is a law of supply and demand.

If demand is high and supply is limited, the price rises. For example, there are many people who want to buy bitcoins, but their issue is limited.

If the supply is high and the demand is falling, the price falls accordingly.

But in the case of bitcoin there is one important nuance. Due to the fact that most of the bitcoins are stored outside the exchanges, and only a small percentage of bitcoins are traded on the exchanges in case of a large influx of buyers, there may not be enough coins for sale. That is, the actual supply is much less than it appears.

Therefore, in the event of a frenzy of demand, the price of bitcoin can rise almost uncontrollably.

Wall Street treats bitcoin in much the same way it treats gold - as an asset that can be capitalized on. For example, by selling bitcoin-ETFs or bitcoin futures.

However, there is one crucial difference with gold. In the case of gold, big players like banks actually control large reserves of the metal. As well as trading them through various "paper" products.

Bitcoin, on the other hand, is not physically in their hands. A huge number of coins are distributed among holders. And in case of a big frenzy on the exchanges will simply not be the right supply of real bitcoins.

This difference is very important. In fact, for the big players, bitcoin is an asset like oil or gold, but one that they cannot fully control. Purely because of the decentralized nature of bitcoin.

In the gold market, there are many different "securities" that merely entitle gold. For example, bank receipts or futures contracts. But there is much less actual physical metal prepared for investors.

The situation is the same with bitcoin. You can buy futures and other complex bitcoin-related instruments on exchanges. But only a small fraction of all existing coins are used for trading. The rest lie in the wallets of holders outside the exchanges.

It turns out that for one real bitcoin, there are many "paper" claims on it. Just like with gold.

This became possible because Wall Street began to apply to bitcoin the same methods as in other markets - leverage, futures and so on. Although bitcoin was originally conceived in a very different way.

Wall Street doesn't actually own or control most of the bitcoins. That's because the coins are stored in the wallets of ordinary people outside of the exchanges.

If suddenly millions of people want to buy bitcoins through brokers and exchanges, there may be no real coins for sale - most of them are in private wallets.

It turns out that conditionally for 1 bitcoin, which someone really saved for trading, there are claims from 10 or even 100 people. They bought that bitcoin "on paper" through all sorts of funds.

The original idea behind the spot bitcoin ETF was to have a real bitcoin behind each "paper" fund. This would reduce the available coins.

But now that rule could be repealed. And then there will be a lot of "bitcoins on paper" not backed by real coins.

The U.S. Securities Commission may authorize a new type of bitcoin fund. These funds would be able to be invested in with regular money. But they will not have real bitcoins inside - only "promises" of payments tied to the price.

Such funds will make people pay more taxes when buying/selling. And most importantly, they can lobby for the banning of regular cryptocurrency wallets so that everyone will be forced to buy bitcoins through their funds.

When withdrawing money from such funds, we will have to pay income tax. And we will only get digital money from central banks like dollars or euros. There will be no full control over the funds.

That is, in fact, people will be forced to buy not real bitcoins, but only "papers" about them. Which means that only intermediaries like Wall Street will benefit.