The Rude Guide to Spot Bitcoin ETFs

The guard is changing far too quickly, even for me. [The Rude Awakening] January 12, 2024 [WEBSITE]( | [UNSUBSCRIBE]( The Rude Guide to Spot Bitcoin ETFs [Sean Ring] SEAN RING Dear Reader, What a week it’s been! First, Pete Carroll and the Seahawks part ways. Then, Nick Saban announces his retirement from Alabama. Next, Bill Belichick and the Patriots mutually agree to go their separate ways. After that, Mohammed al-Fayed, father of Dodi, would-be father-in-law of Diana, former owner of Harrod’s and Fulham Football Club, dies. My head is spinning! The world is changing before our eyes. And I mean fast. Artificial Intelligence (AI) is one of the most significant inventions to hit the mainstream since e-mail revolutionized how we worked in the 1990s. (Of course, AI has been around longer. But with today’s processors, it’s usable!) And AI is inextricably linked to crypto. From trading bots to blockchains, we’ll see many collaborations between the two over the coming years. But before we get there, The Securities and Exchange Commission (SEC) finally approved spot Bitcoin ETFs yesterday (after their X account was hacked). But first, some quick vocabulary. “Spot” simply means “traded immediately for cash.” So spot Bitcoin ETFs will hold actual Bitcoins, not futures contracts on Bitcoin. An ETF is an “exchange-traded fund.” An ETF is a pooled investment security that operates like a mutual fund. Typically, ETFs will track an index, sector, commodity, or other asset. But unlike mutual funds, ETFs are purchased or sold on a stock exchange just like stock. ETFs track anything from individual commodities to diverse securities or Bitcoins. If you hold cryptocurrencies in your portfolio - the Rude recommends 2%, especially if you’re inexperienced - you would’ve seen a jump in your net worth as the SEC said, “Yeah!” Let’s get into it. WTF Are Spot Bitcoin ETFs? A spot Bitcoin ETF is an investment vehicle that allows ordinary investors exposure to the price moves of Bitcoin in their regular brokerage accounts. Unlike Bitcoin futures ETFs, a spot Bitcoin ETF invests directly in Bitcoins as the underlying asset, not derivatives contracts based on their prices. The ETF securely holds Bitcoins in a secure digital vault, which registered custodians manage. The purpose of this kind of ETF is to mirror the price of Bitcoins in the crypto market. The ETF buys Bitcoins from other holders or through authorized cryptocurrency exchanges to get started. The tokens are then stored in a digital wallet, often using several layers of security, including cold or offline storage, to reduce risks like hacking. The ETF then issues shares corresponding to the number of Bitcoins it holds. The ETF share price should reflect the prevailing market price of the cryptocurrency, and the shares are available for public trading on traditional stock exchanges. Investors can invest in spot Bitcoin ETFs as a more accessible and regulated means of tapping into Bitcoin’s price moves. Enhanced liquidity, facilitated by spot Bitcoin ETFs, could lead to more stable prices and easier price discovery in the market for Bitcoins. [2024 Will Be The Year of AI]( The coming second wave of AI could change your life and your finances starting in 2024. This is why our team of experts went live to show you what you need to do to prepare before it profoundly impacts you and your wealth in the coming months… And to reveal THREE tiny AI stocks set to explode during AI’s Second Wave. [Click here for all the details.]( [Click Here To Learn More]( Why Might Bitcoin ETFs Make Sense For You? Investing in a spot Bitcoin ETF has several advantages over other investment options. Here are some of them: Accessibility: Spot Bitcoin ETFs allow ordinary investors to invest in Bitcoin through their regular brokerage accounts. This makes it easier for investors to gain exposure to Bitcoin’s price moves without the hassle of buying and storing them. Regulation: The SEC regulates Spot Bitcoin ETFs. This may provide investors with protection not available in the unregulated cryptocurrency market. Liquidity: Spot Bitcoin ETFs will be traded on traditional stock exchanges, which makes it easier for investors to buy and sell shares, increasing their liquidity. Transparency: Spot Bitcoin ETFs must disclose their holdings and provide regular reports to investors, which increases transparency and helps investors make informed decisions. Lower fees: Spot Bitcoin ETFs have lower fees than mutual funds or hedge funds. This makes them a cost-effective way to invest in Bitcoin. What Disadvantages Should You Consider? While investing in a spot Bitcoin ETF has several advantages, there are also some disadvantages to consider: Management fees: Many Bitcoin ETFs have high management fees that impact an investor’s overall returns over time and may be unfavorable to some investors. Market volatility: Cryptocurrencies are highly volatile. The price of Bitcoin fluctuates rapidly, which can lead to significant losses for investors. Regulatory risk: The flip side is that cryptocurrency regulators are still evolving. New regulations may sink the value of Bitcoin and Bitcoin ETFs. Let’s be honest: Gary Gensler and his crew at the SEC hardly inspire confidence in their ability to navigate this quickly evolving field. Security risks: While Bitcoin ETFs are designed to be secure, there is always a risk of hacking or other security breaches that may result in the loss of Bitcoins. Lack of control: When you invest in a Bitcoin ETF, you are entrusting the management of your investment to the ETF’s managers. This means that you have less control over your investment than if you were to buy and hold Bitcoins directly. Are These ETFs Right For You? Whether a spot Bitcoin ETF suits you depends on your investment goals, risk tolerance, and financial situation. Here are some factors to consider: Investment goals: If you are looking to invest in Bitcoin but want to avoid going through the hassle of buying and storing Bitcoins yourself, a spot Bitcoin ETF could be a good option for you. Risk tolerance: Bitcoin is a high-risk investment due to the volatility in the cryptocurrency. If you have a low risk tolerance, consider other investment options. Financial situation: Spot Bitcoin ETFs have lower fees than mutual funds and hedge funds. However, you should still consider the management fees and other costs of investing in a spot Bitcoin ETF. Minimum investment: Unlike some investment vehicles that require a substantial minimum investment, spot Bitcoin ETFs won’t have a high minimum investment. Wrap Up If you’ve been reading the Rude for a while, you know that the fourth pillar of the Rude’s Four Pillars of Financial Freedom is to hold a bit of crypto. If you followed that pillar, the cryptocurrency portion of your portfolio grew from 2% of your assets to 3%. Or even 4%. If you haven’t yet, there’s still time. And these spot Bitcoin ETFs may be just the ticket for you to enter a new asset class. Have a wonderful weekend! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( In Case You Missed It… Putin: The Master of Europe [Sean Ring] SEAN RING The Emperor is naked, and the world can’t unsee it. Last week, in this very space, I wrote about how a bunch of goat herders from the Arabian Peninsula had halted world trade. As I sit here on Wednesday night, one of Zero Hedge’s headlines reads, “[US Warship Directly Targeted In 'Largest Ever' Houthi Red Sea Missile Attack]( I don’t know what’s funnier: these tribesmen showing up the world’s allegedly most potent military or the media trying to pin it on Iran to draw the US into World War III to save Israel’s (turkey) bacon. And if I’m writing about Yemen, what does Russia have to do with it? Strap yourself in; we’re going for a wild ride. [Over 62 And Collect Social Security? Take Action Immediately!]( [If you’re over the age of 62 and currently collect Social Security, you need to prepare now](. Because Biden has given our country the worst inflation in decades – and many warn things will only get worse from here. Worse yet, the Social Security check you receive now may not keep pace with inflation… [Which is why, if you don’t act now, you could fall behind in the months ahead](. Is your retirement at immediate risk? [Click here now to get the simple, step-by-step actions to survive inflation](. [Click Here To Learn More]( The Houthis and the Wider Middle East Paging Lloyd Austin… Paging Lloyd Austin. The US SecDef managed to get a four-day stay in a hospital without President Biden knowing anything about it. But then again, if President Biden were in the hospital for four days, he wouldn’t know it. The USG is rudderless, leaderless, and listless amid a possible world war into which the bureaucratic Deep State, sitting safely behind their desks, is riding pell-mell. NATO — the US, really — is getting its ass kicked in Ukraine. Russia is grinding down, ever so slowly, what’s left of the Ukrainian army (and its male population). And what happens next? Hamas gets drugged up and commits atrocities in southern Israel that would make Attila the Hun blush. This tragic mistake — Hamas doesn’t think it was a mistake, of course — allows Israel to open the throttle on the Palestinian population. Or so they thought… The court of public opinion stepped in. Ludicrous Ivy League graduates called for not just Israeli but for Jewish blood. Their fellow students’ blood, no less! But this isn’t isolated. Other than the notable exception of India, the Global South sides with the Palestinians. And many in the West, not just spoiled brat Harvard students, also side with them. The US and Israel look increasingly isolated. That wasn’t how this was supposed to go. But it seems that the only place you can find a “coalition of the willing” is on the back of a milk carton. And then, out of absolutely nowhere, the Houthis - as in, and pronounced like, “Who these?” — start firing rockets at any ships carrying anything to Israel, blocking the Bab Al-Mandeb strait and choking off the Suez Canal. Next, shipping companies, at the behest of their London maritime insurers like Lloyd’s, canceled Suez routes, sailing around the Cape of Good Hope like a moonwalking Vasco da Gama. Egypt reels from the lost revenue, nearly 2% of its GDP. Prices rocket for shipping, the extra time, and the extra fuel. Inflation grins down on us like Arnold in The Terminator, saying, “I’ll be back.” Now, the US has to send in carriers to scare off the camel riders. Does that work? Nope. Just reread today’s headline. We really must be thankful China doesn’t want to invade Taiwan. Because the Emperor isn’t just naked. He’s playing naked Twister without having showered for weeks. Russia is Unbeatable in Europe Reader, I’d like to welcome you to the new Europe. The US is no longer the master of a collection of vassal states here. Russia now holds all the cards. Europe could never really afford US liquified natural gas (LNG) at 4x the cost of Russian pipelined gas. The sanctions the EU mindlessly imposed on Russia are the direct cause of Germany’s deindustrialization and Italy’s nearly quadrupled energy costs. Other European countries similarly suffer. Sure, it’s nothing compared to Ukrainian lives, you may think. But this war was unnecessary — and unwinnable — from the beginning. I wonder if Boris Johnson feels guilty for stopping a peace treaty between Russia and Ukraine in 2022. And this stupid war hasn’t just cost Europe money. It cost America its empire. Once the USG seizes the $300 billion of Russia’s currently frozen assets, its prestige and reputation for honesty and fairness will also be gone. As reported by [The Duran]( negotiations between Russia and the West involve Russia's demand for the four regions of Ukraine and solid protections for Russian speakers. Putin will likely insist on the presence of Russian troops in Ukraine, leading to a potential future without a Ukrainian state and a disastrous outcome for Ukraine. In other words, the Russians are playing hardball, while the US just wants to save face. Putin is Europe’s new master now. Start the Uranium Enrichment! Take a bow, Rick Rule. He was long uranium and uranium stocks long before this announcement. But he saw it coming. As seen in [Reuters]( The U.S. is seeking bids from contractors to help establish a domestic supply of a uranium fuel enriched to higher levels for use in a next generation of reactors, a fuel currently only available in commercial levels from Russia, the Department of Energy said on Tuesday. I’m sorry. From where? Russia. Did you say “Russia?” Yes. Yes, I did. Again, from [Reuters]( "It's a chicken-or-egg sort of process," Jon Carmack, the department's deputy assistant secretary for nuclear fuel cycle, said in an interview. Carmack said the government needs to invest enough money to show initial demand for producers, so they will build capacity, apply for licenses and get HALEU plant design and construction projects underway. Do you mean to tell me that the US was dependent on Russia for its enriched uranium? Yes. If you read this [Rude Awakening piece]( from nearly two… friggin’... years… ago, you knew all about this. Hilariously, according to [The Wall Street Journal]( in an article from 2022 cited in the Rude above, The U.S. has met Russia’s assault on Ukraine with economic penalties targeting Russia’s financial sector and a ban on oil imports into the U.S., but so far, uranium has avoided sanctions.The U.S. relied on Russia and its allies Kazakhstan and Uzbekistan for about 46% of its needs in 2020, according to the U.S. Energy Information Administration. Your country is run by smooth-brained dipsticks who majored in basket weaving. But Try to Stay Upbeat Yes, the world is going to hell in a handbasket. But don’t sell stocks, gold, or crypto right now. Really? Here’s where we get positive. You can be right. Or you can get rich. Choose the latter. Sure, Seanie. But how? One fantastic way to start is to learn how to trade from a genuine pro. My colleague, Greg Guenthner, is an expert trader and chartist. He can teach you how to read a chart and interpret it. Matt Insley, our fearless leader here at Paradigm Press, interviewed Greg, or “Gunner,” as we call him, about crypto and AI stocks. You can watch the video on the [Paradigm Profits]( YouTube channel by clicking below… And make sure you’re subscribed by [clicking here](. It’s amazing. I even wrote it up in the [Rude]( yesterday. Gunner covered Bitcoin and Bitcoin miners like MARA, RIOT, CLSK, and HUT. He then turned to AI stocks, discussing industry rockstar NVDA, SMCI, ANET, AMD, and my favorite, PLTR. He went over all the charts step-by-step. I can’t encourage you to [watch the video]( enough. If you decide you “got the Mott’s” to be a sound, competent trader, then head here [to sit for a 2-minute assessment](. (Sean: I just took the test. It literally takes under two minutes.) Gunner’s looking for 50 newbies he can raise to trader status. Maybe that’s you. Maybe not. There’s only one way to find out. You got the Mott’s? Or what? Accept the challenge. All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com X (formerly Twitter): [@seaniechaos]( [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@rudeawakening.info. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. 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