Blackrock bitcoin ETF vs Bitcoin – which one is better?
By Adam - CEO @ Bitcoin Well
/ 2023-06-17
Blackrock bitcoin ETF - the specifics
On the surface, it looks like the Blackrock bitcoin ETF will be a hot topic. Specifically, it will allow you to buy bitcoin within a registered vehicle and without the “burden” that comes with pure bitcoin ownership and custody. You’ll likely be able to call your stock jockey and say “add bitcoin to my portfolio” and the stock jockey will click a few buttons and voila! Some fake bitcoin will appear in your portfolio.
The reason I say “fake bitcoin” is because this will simply be price exposure (less the fund fee) with the added benefit of government tax programs (if you buy the fund through your 401k or RRSP/TFSA in Canada). Of course, the benefits are hard to ignore. Registered tax vehicles are often sheltered from future taxes, and you have someone else handling all the nitty gritty work that comes with storing bitcoin.
Bitcoin - the specifics
What nitty gritty you might ask? Well, lots. Buying bitcoin, if you’ve never done so in the past, can actually be a bit of work to set up. From start to finish the steps to buy real bitcoin on the blockchain look like this:
- Set up a bitcoin wallet
- Create an account
- Verify your identity
- Send money
- Buy bitcoin
Now that you own bitcoin you should worry about how that bitcoin is stored. Are your private keys secure, what about your wallet and TXID management, do you remember how to send bitcoin? What about taxes when you sell. You have all of this burden without your dedicated fund manager holding your hand and walking you through the process.
This burden is why lots of people leave their bitcoin on exchanges. It removes the burden of custody. This, however, is very dangerous. And it’s possible that the Blackrock ETF is actually more dangerous…