Is a Bitcoin ETF worth it if BTC becomes the main currency?

Seeking Advice
1

I’ve been thinking about Bitcoin ETFs and wanted to know if I’m just overthinking it. Let’s say I invest in an ETF like IBIT through my Roth IRA. If BTC becomes a globally accepted currency, would it make sense to keep money in an ETF? Wouldn’t I want to cash out to BTC directly to use it in day-to-day life? I get that people use ETFs now because they don’t want to handle custody themselves, but in a world where BTC is the main currency, wouldn’t ETFs be pointless? What do you think happens to those who hold ETFs in a Bitcoin standard world?

2

You’re asking good questions. You’re ahead of most people already. Keep thinking critically about this!

3

Watch out for scammers! People are active in private messages pretending to offer help. Don’t fall for it, and report anything suspicious to the forum moderators.

4

I think ETFs are a bad idea unless you’re trying to turn an existing IRA into Bitcoin. Other than that, why wouldn’t you just buy and hold it yourself? ETFs seem like a way to make money off people who don’t understand how Bitcoin works.

5

@Ezri
Yeah, it’s all about making people feel safer with a third party, convincing them they can’t lose their keys. Then they get forced to sell into fiat and pay taxes. The only upside is getting BTC for cheaper with a 401k match. I use ETFs for short-term, but my long-term BTC is in cold storage, waiting for the right time.

6

@Ezri
In some countries, taxes on crypto trades are really high, but ETFs might be taxed differently, so for some folks, it could make sense to buy ETFs even if it’s not ideal.

7

Eventually, spending BTC might not be a taxable event, but that probably won’t happen until BTC is worth millions. By then, stuff like sales tax will replace capital gains taxes on spending. Those who held onto their BTC won’t have to worry about taxes on their gains. But ETF holders will get hit with capital gains tax. The main benefit of ETFs now is maxing out IRA and 401k contributions, which let you avoid or delay taxes. If you’re using a regular account, though, ETFs are the most expensive way to buy BTC because of the taxes when you sell.

8

@Khloe
Thanks for your insight! I have about $5100 in my 401k from my previous job, but I’m not working right now. I’m thinking that maybe buying physical BTC from an exchange and just dealing with the taxes would be the best route for me.