Your Bitcoin Profit Calculator In The Age Of The ETF January 31 Shane Vereen Super Bowl Jersey , 2014 | Author: Walle Eddington | Posted in Finance

Exchange-Traded Funds (ETF, for ort) hieved a great popularity in the financial world a little over a decade ago, though they were first introduced in the 1990s. They have sothing of an Index Fund quality to them.

Index Funds were inspired by the thinking of John C. Bogle’s insight that as a general rule fund managers could not usually beat the market: the prevailing assumption about the correct attitude to investing at the ti. He noted that once fund managers’ fees are ftored in, the end-user, the fund consur, has no pretty much no hope of beating the market. Believing otherwise, in Bogle’s assessnt, was folly.

For those who recall those days Sebastian Vollmer Super Bowl Jersey , there is an amusing irony in describing the situation in that manner, for this is precisely how those on Wall Street condemned Bolge’s indexed approh: “Bogle’s folly.” Yet, the truth of the matter is that this approh, which resulted in creation of funds that trked the S&P 500, at minimal-to-no fees, has turned out to have embodied great wisdom.

ETF are an effort to profit from the Index Funds lessons, with the additional benefit that, while the latter were very expensive to trade – the whole point being that constant movent was too costly – ETF can be traded often mission-free. And Sealver Siliga Super Bowl Jersey , since they’re indexed, they are far less expensive in transtion costs than are mutual funds.

Recently, there have been efforts to apply this ETF financial technology to another leading edge technology in the economy: the digital currency Bitcoin. An especially prominent effort in this regard has been the initiative by the Winklevoss ins.

These in brothers have been notorious in popular culture for their struggle with Mark Zuckerberg over control of the FeBook social dia site. Less widely known is that the Winklevoss ins have been big ti early adopters of Bitcoin. Estimates on the extent of their holdings of Bitcoin have been in the area of $11 million.

Permission to establi a publicly traded Bitcoin ETF though must be provided by financial regulators. And the effort is already being pooh-poohed by bigwigs in the industry, such as Knight Capital managing director Reggie Browne.

Undoubtedly, the extre volatility of Bitcoin recently does make it a little inconsistent with the Fund Index spirit that initially inspired the ETF tradition. Emphasizing this though perhaps really misses the more central point of importance.

To begin with, trading of such funds already exists in the form of private funds. SecondMarket’s private Bitcoin Investnt Trust (BIT, for ort, get it?) is modeled on a suessful gold ETF. BIT has a $25 Ryan Wendell Super Bowl Jersey ,000 minimum investnt, but, as testified by its creator, the SecondMarket CEO, at the conclusion of 2013, it held $65 million of investnt.

So, it seems a bit far-fetched to allege that the digital currency’s fluctuations are too rich for ETF investors, as Browne has. All this though seems to to be missing a fundantal point. The point of a currency is as a dium of exchange Ryan Allen Super Bowl Jersey , not an investnt opportunity.

The point here isn’t that there’s anything wrong with wagering on (or against) any new product, including a new currency. Speculation and ort selling are perfectly legitimate and valuable exercises within any dynamic and free market. The hazard arises when the mistake is made of treating Bitcoin as an investnt opportunity in disregard of its unique specifics: unlike, say gold, Bitcoin is designed specifically and precisely to operate as an alternate currency.

As with any product introduced onto the market to et specific consur demands, the features and benefits which will determine its fate can only be revealed by custor testing in the fullness of ti. The notorious Bitcoin volatility the last while though has been a function of financial, rather than moary, ambivalence. It seems to this author that one of o possibilities lie ahead of us.

Bitcoin pile What would an ETF Mean for Your Bitcoin Profit Calculator? Either, Bitcoin will sohow (and there are many issues to consider here) catch on and bee widely used around the world – whether sanctioned by nation-states or not. Or Rob Ninkovich Super Bowl Jersey , it will be judged by the consuming public (consurs of currency, you understand) to not provide enough benefits over so-called sovereign currencies, and will lapse into disuse.

Should this forr oute e to pass, holdings of the currency will be so widespread (in light of its freedom from the inflationary manipulation charteristic of fiat currencies) that the kind of financial hiups which have caused the recent fluctuation will simply cease having appreciable consequences. Should that be the oute of this social experint, Bitcoin ETF will wind up in ft providing extly the secure, indexed funds which are the usual fare of ETF investors.

And, ould the other, less pretty Rob Gronkowski Super Bowl Jersey , result e to pass, the truth is that the majority of those financially hurt by a collapse in the value of Bitcoin will be the speculators who bought up the currency, not on moary rits, but rather in hope of financial windfalls. I wi such people no ill-will, but such risk is the very nature of such speculation.

This is not to say that if you fervently believe in the future of Bitcoin that you ouldn’t invest in an ETF and attempt to profit off your knowledge of and conviction in what you consider a great product. If though you’re just trying to catch a financial wave, you have to be prepared for the ft that surfing entails a lot of being dumped in the drink.

These Bitcoin ETF initiatives are intriguing prospects. They’re well worth watching. Do not ever lose sight though of the basic reality that the future prospects of Bitcoin will be determined in i It's well