A brief overview of our reasons why overseas users prefer to buy Bitcoin ETFs

In October, the highly anticipated first US Bitcoin futures ETF, ProShares Bitcoin Strategy ETF (ProShares Bitcoin Strategy ETF, market code BITO.US), was launched, reaching $ 2 billion in management tool within two days of its release. registration.

Soon after, many ETFs went public. However, many people still don't understand why they don't buy Bitcoin directly. This article describes the advantages of investing in Bitcoin ETFs over investing in Bitcoin from our perspective.

Footprint analysis: BTC price and volume

What is the Bitcoin ETF?

The principle of a Bitcoin ETF (Extra-Exchange Fund) is similar to an investment. You can buy money, get commodities, and then trade them on the stock exchange.

If the ETF is approved, the Bitcoin ETF should help investors hold bitcoin or bitcoin futures contracts. Traders don't have to spend time on Bitcoin gains and losses, and they don't have to worry about the need for financial services like buying cryptocurrencies. All they had to do was buy the money and wait for the investment to increase.

Bitcoin ETFs are suitable for those who wish to invest in Bitcoin but do not wish to trade on cryptocurrency exchanges. For those who want to invest in Bitcoin but don't want to face the risks of storing cryptocurrencies, Bitcoin ETFs are also a better option.

Some common Bitcoin ETFs (to determine the number of assets under management) are:

Grayscale Bitcoin Trust (GBC)

Bitcoin ProShares Strategy ETF (Bitcoin ProShares Strategy ETF, BITO)

Bitcoin ETF Objective (Bitcoin ETF Objective, BTCC)

Bitcoin Valkyrie Strategy ETF (Bitcoin Valkyrie Strategy ETF, BTF)

Before choosing a Bitcoin ETF to invest in, you must first understand why you should choose a Bitcoin ETF.

Reason 1: Save taxes

In most jurisdictions, taxpayers are required to pay taxable income when mining or selling cryptocurrencies.

Since BTC is a profitable investment, investors have to pay a lot of tax to the government after receiving the tax.

Americans who have held the assets for more than a year (long-term income) are required to pay 15-20% of taxable income. In Canada the calculation is completely different, but the cost is similar.

In the United States and Canada, the maximum grant for any tax deductible tax code (like Roth IRA and TSFA) is $ 6,000.

If you invest $ 6000 in BTC and make 5x back in 1 year (i.e. you bought it before the recent cattle market), you will need to pay between $ 3000 and $ 4000 taxes if you only think about taxable income.

However, if you buy a BTC ETF using your Roth IRA or tax-free TFSA account, you won't have to pay a down payment of $ 6,000 per year, but if you do business with the completion of Swing, upgrading can be significant. . .

Reason 2: Leveraged trading (applicable to many countries)

Binance is the only platform that can provide profitable trading and options for cryptocurrencies. However, there are many countries that Binance does not have, such as Canada, the UK, and more recently Singapore.

Currently, there are several market reports for BTC.

Cost Z MVRV

Ratio stock/flux

Short-term and long-term realized value ratio (SLRV)

See the value-for-money ratio (VPN)

Unrealized Net Income / Poob (NUPL)

The result of these market measures and the similar situation of BTC ETFs and BTC rates gives BTC traders an advantage over traders using traditional financial analysis procedures. . Since the price of Bitcoin moves easily, you can get huge benefits by purchasing a cryptocurrency ETF.

At the end of March 2022, if the price of BTC hits the long-awaited 100,000 mark and the ETF-BTC bond is above 90%, you can only get a 2x return by buying BTC, but using the 'GBTC or BTCC option from BITO do. In 4% of your earnings you can get -5x.

Reason 3: Easy

Most people don't like controlling or managing their own funds, let alone setting up a CEX account to learn and understand cryptocurrencies. Bitcoin ETFs are simpler and allow people to invest in Bitcoin using their existing savings.

According to a 2021 Gallup survey, 51% of Americans own a product. However, most people do not venture out and just keep quiet and let the bank take their capital. Bitcoin ETFs allow many users to use this withdrawal to BTC and not have to transfer money to a new exchange.

Therefore

For the above reasons, most new investors in cryptocurrencies will opt for Bitcoin ETFs. However, owners of Bitcoin ETFs also have some drawbacks. We will learn more about this in the next article.