Bitcoin ETF: Wallstreet then Mainstreet


I have been saying since I first found out about alt coins, some 3 months ago, that Bitcoin was going to go Mainstream and that it would soon be a wallstreet investment, much like many other risky, speculative investments.

When I was saying these things they were seen as pie in the sky, impossible dreams by anyone with an Economics degree or anyone in the investment world. Well, lo and behold, there are now late stage plans being submitted to the US government for approval for a Bitcoin ETF. If approved, this ETF would make Bitcoin a Wallstreet investment and soon after that it would be almost a guarantee that (with some media hype) Bitcoin would become a common household name and something the masses would embrace, mine and invest in.

Bitcoin ETF

Just a few months ago nobody in the investment world thought Bitcoin was anything more than an anarchist pipe-dream, a fad and most of all, not an instrument one would ever invest in, not even the biggest risk taking investors.

Already, as I have been predicting, there are now plans for the famous Winklevoss Twins to get approval for a Bitcoin ETF. What is an ETF? An ETF is an Exchange Traded Fund and one can use an ETF as a vehicle to trade anything - absolutely anything on the face of the earth. It is therefore a natural progression in the life-cycle of Bitcoin to go the ETF route. This is the equivalent of a small company going public, but without all the headaches, laws and regulations a public company would have to follow. It is the easiest route for Bitcoin to get to walls-treet and then to mains-treet since once funds and large banks and investors start pouring money into Bitcoin, the risk and stigma associated with it as being a fluke or just a coin people use to buy drugs and launder their criminal money with will be all history.

What is shocking to me is that even now, even after Bitcoin has proven it has the endurance and stability of a top grade investment, tens of millions of dollars of silicon valley investments behind it and now an ETF application by the best firm in the business, most major investors still see Bitcoin as a joke.1)

This reminds me of the internet industry back in the early 90's. Most people on wallstreet saw it as another fad, an easy way for people to get around government regulations to sell and buy drugs, prostitution and other illegal activities. They saw web-based companies such as Amazon as stocks that would never make a profit and I remember other than Legg Mason, not a single major analyst on wallstreet had a strong buy rating on Amazon, even when it dropped to $7 per share back around 2001.

Looking at Bitcoin now reminds me of the closed minds of the mainstream media and investors of the internet era. They waited and waited for more proof and by the time they saw the internet was here to stay and that it would revolutionize everything, most ended up investing too late. It's the same thing now - those with some vision and those who can think out of the box can see these alternative currencies, not just bitcoin, are actually a new industry and they will soon change everything on every level - like nothing the world has ever seen. The internet era and all the changes it brought will pale in comparison to what the digital cash era is about to bring.

And because this new era and industry is 100% digital it will move at the speed of light, it will grow and expand faster than any industry before it. It will create change and innovation faster than any product before it. And now I finally have some proof for all of these crazy claims I have been making for the past 3 months - now I have a legit ETF application which I have no doubt will get approved by the US government.

What's sad is that many in the media and on wallstreet actually think the US government will not approve the Bitcoin ETF application. To this I say: NOT possible!

The reason is not just that they all think Bitcoin can never be a real investment. Another reason most cite is the fact that Bitcoin has been a major portal for illegal activities. Things such as buying and selling drugs and massive multi billion dollar mafia money laundering. In fact, a major Bitcoin exchange, Liberty Reserve, was recently shut down and the CEO indicted for laundering $6 Billion over the past few years.2) That's a massive amount of money to launder for a coin which hardly anyone knows anything about and it is in part for events such as these that Bitcoin has garnered a bad reputation and many can't see the big picture, they instead focus on these errors which can happen to any new industry which lacks laws, regulations and oversight. They fail to see the real potential here and the fact these problems can be easily fixed and the fact big money is coming into bitcoin says exactly that, the old ways of doing things will no longer be accepted.

It's just like Las Vegas, once big industry money and investments went into Las Vegas, most of the blatant illegal activity which was taking place there in plain sight was eliminated overnight. It would have been ridiculous to think that Las Vegas was a bad investment which wouldn't last just because there was no rule of law at a time when nobody paid any attention to it. Once wallstreet gets involved, politicians, legislation and the rule of law will be enacted and enforced and Bitcoin will no longer be a bastion for illegal activities.

The closed mindedness and blinded attitude is so ridiculous that major journalists actually think that just because Liberty Reserve was shut down for money laundering that Bitcoin will be next.3) That's like saying eBay should be shut down just because some foolish individuals at one point sold illegal goods on their site. You would think something like this is not possible in today's age, especially with the internet so close in all our minds, yet here it is, it's happening all over again.

In my opinion, this kind of negative bias by the media and wallstreet should only provide more time for the individual investor to earn, buy and mine more Bitcoins and other crypto-coins, because if this ETF does take off for Bitcoin, like I think it will, then all boats will rise and I believe there will be a meteoric rise in all or most crypto-coins, earning visionaries and early adopters more money, on a percentage basis, than even the great industry which made millionaires of many people who had the guts and vision to take on the risk.

Benefits of an ETF

They say the odds for the Bitcoin ETF application to get approval from the US government are small and unlikely but I totally disagree. As I have outlined in previous articles, the benefits digital money would bring to any government are enormous and more powerful than any other single industry has ever accomplished. Banks would also benefit enourmously from digital money as would all large multinational corporations. The only ones losing anything would the masses who would have to forfeit the last of their privacy rights but none of them see that as bitcoin, in its current form, actually gives you more privacy and less red tape.

It would be downright childish to think the US government, or any government for that matter, could allow an anonymous currency to function and to grow like a wildfire without any checks and balances, without making it transparent to the piercing eyes of the government. It's just not possible yet most proponents of digital money don't even consider the possibility that the government will, at some point, get involved and change many aspects and features of Bitcoin and digital money in general, to gain control over these currencies and to make them totally transparent, at least to themselves and to the banking industry.

But in the short run an ETF would have many benefits for individual investors, especially those who get in early. It would allow for anyone to invest in Bitcoin, for growth or as a speculative investment, without the need to go out and buy expensive hardware and without the need to learn about digital wallets, software clients and mining pools and the multitude of mining software out there right now which are complex in nature and have to be adapted to your specific hardware and further tweaked for optimal performance. And the energy cost to mine bitcoin, right now the cumulative mining efforts drain the power of a Nuclear Powerplant, most Americans rather have the option to buy an ETF like they would any other stock and not have to deal with anything else.

And that's where main-street comes in. Once people find out about Bitcoin and the fact that it's not a fad and a drug dealers paradise they will take a second look. And once they see how easy it is to invest in bitcoin, many would then put some money at risk if they believe Bitcoin will rise, and given there are millions of speculative investors in America, and many more overseas, and many hedge funds who look for investments to divest into, I say there is no chance that bitcoin will not skyrocket in price just months after the ETF starts trading.

The way this ETF is set-up to work is for every 5 shares someone buys in the ETF, the ETF fund then goes out and purchases 1 Bitcoin. There are currently just under 12 million total Bitcoins in existence and only 25 more bitcoins are created every 10 minutes so the supply of Bitcoins is incredibly low.

That said, I predict that not only will this ETF get full approval from the government but once it does, it will take off in a huge way. It may take a few months for the media to finally get onboard but once they see this is a real investment they will turn the other way and instead of bashing Bitcoin they will pump it, like they do every so often with other wallstreet darlings. And I think Bitcoin has all the makings of a great Wallstreet darling. But the biggest thing it has is a major shortage of coins - a bitcoin supply so low that even a mild interest from investors or hedge funds would create massive upward pressure on the price of Bitcoins.

And like I said, if and once this happens, investors would naturally look for the next bitcoin and many would start speculating on other crypto coins in an attempt to find the next Bitcoin. This is the reason why any crypto-coin speculator right now should try to accumulate as many coins in various different crypto-coins and hold for when this Bitcoin ETF starts to take off.


I don't think it will take long, 6-12 months, after the ETF starts trading, for bitcoin to hit new all-time highs and given the incredibly low coins outstanding I also predict that Bitcoin will reach heights like nobody can imagine. $1,0000 per bitcoin is actually a low price target in my mind.

And even if I'm wrong, even if Bitcoin doesn't blow past $1,000, a Bitcoin ETF would still be great for all crypto-coins out there. It would bring legislation and order to the entire industry which would then create a more legal and appealing atmosphere for newcomers which will then surely create an influx of new money into all alternative currencies.

Like usual, it's best to not listen to the mass media, to do your own research and to make your own informed decision. For me, the second I found out about these Crypto-coins it was like finding the internet for the first time only what I see now is much greater than even the internet. I did not listen to the media 3 months ago and I'm not listening now so I am investing all I can in buying crypto-coins and I am holding them for the long term. In my mind, as fast as this thing is moving is 12-24 months and with Bitcoin at just under $80 today, after a 2 week-long selloff, there is a lot of upside and when you look at other coins such as ixCoin or Devcoin, the upside potential is in factors of 100 or more.

Make no mistake, there is no sure thing here - and like all investment, risk does equal reward so please do your own research and measure the risk and if you have the ability to take on some risk and can afford to risk losing some money then there is no better investment right now than a few crypto-coins, because if Bitcoin goes sky-high, then the other coins will soon follow. This may turn out to be another and very rare one-in-a-lifetime opportunity for those who see it and are willing to risk something to get in on it in the early stages. Because like all great investments and opportunities, those too fearful or uncertain to take a risk will watch until it's much too late, and I don't want to be that guy this second time around.

- Maximilian Wilhelm


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