blackcamaro
Well-known member
The answer to the first question. Yes, I believe Purpose and CI are smarter then me and will do a better job at protecting the actual Bitcoin and Ethereum then I would. They have a lot more to lose then I do.That's simpler for the end-user.
So you hope that Purpose is smarter than you and has a secure system for safely storing coins? What if Purpose loses access to a portion of their holdings? I assume if it was public knowledge, the fund takes a haircut to compensate (and Purpose gets sued and loses). On the other hand, if they lost the keys to a cold wallet containing 50% of their holdings, are they required to disclose that? They only buy one thing so presumably the last 50% will never be needed as they never rebalance nor buy alternative crypto and hope to keep growing the fund with time.
Is there a mechanism in place to require holding funds/companies to churn coins to show that they have access to their holdings? "Owning" virtual things brings up interesting issues.
The rest of the questions I don’t have the answer to. There is quite a bit of risk in my opinion holding any kind of crypto in any form. Maybe I have added more risk by holding through a ETF but it works for me. Both holdings are less then 5% of my portfolio which is otherwise a fairly safe mix of index funds, bank and utilities type stocks.
One big risk obviously is crypto trades 24/7. ETF obviously regular trading hours. If one day BTC started falling off a cliff on Friday night and continued all weekend I wouldn’t be able to sell until Monday morning. That is slightly concerning.
Honestly it was a fomo kind of thing and I bought some. Let’s see where it goes.