Physically backed Bitcoin ETFs, like the Bitwise Bitcoin ETF, are safer than any other ETFs due to their unique accounting system, Core Scientific founder Darin Feinstein believes.
With the arrival of spot Bitcoin exchange-traded funds (ETF), traditional traders in the United States has obtained a unique investment tool with features that have never been seen before, according to one industry observer.
Spot, or physically-backed, Bitcoin ETFs are superior to other commodities-based ETFs like gold ETFs because a spot Bitcoin
BTC $45,374 ETF verifiably holds BTC, according to Darin Feinstein, founder of multiple blockchain firms, such as Core Scientific and Blockcap.
Unlike any other ETF, a spot Bitcoin ETF is running on an immutable ledger, which is the “best accounting system that’s ever been available to humanity,” Feinstein said in
“A Bitcoin ETF proves via the Bitcoin network that it holds the Bitcoin – that’s a much safer investment, in my opinion, than investing in any other ETF, such as a gold ETF, where you have no way to know on a real-time basis if its really holding the gold or if it’s been authenticated,” Feinstein stated.
The Bitcoin advocate referred to spot Bitcoin ETF providers like Bitwise, which publicly released the address holding the underlying BTC for its Bitwise Bitcoin ETF a few days after it launched.
The Bitcoin network also enables the tracking of all transactions and addresses in real time, which allowed the blockchain intelligence platform Arkham to independently locate the addresses of spot ETFs like the Grayscale Bitcoin Trust ETF, BlackRock’s iShares Bitcoin Trust and others.
Unlike any other commodity, the Bitcoin network offers transparency regarding the total amount of Bitcoin in circulation and the remaining amount yet to be mined, with its total supply capped at 21 million coins. This distinguishing feature is absent in commodities such as gold.
Total circulating Bitcoin since 2009. Source: Blockchain.com
According to Feinstein, there is no reliable method to verify the storage, verification, auditing and authentication processes for all existing physical gold, including details on its location and management control.
“It is said that there is $11 trillion in physical gold on Earth,” the Bitcoin advocate said, arguing that all the federal gold hasn’t been publicly audited for as much as 70 years.
“Investments that self-audit, self-authenticate, prove reserves and are publicly viewable 24 hours a day have never existed until the Bitcoin ETF,” Feinstein stated, adding:
“All ledgers have been corrupted by the humans that keep the records, either on purpose through fraud or by accident, through error. And so, for the first time in human history, Bitcoin purported to have this immutable ledger, which I thought was impossible until I studied Bitcoin. Bitcoin’s ledger is unalterable.”
Despite the Bitcoin network offering a high level of transparency, some industry observers previously expressed concerns that spot Bitcoin ETFs could potentially create “millions of unbacked Bitcoin.” On the other hand, Bloomberg ETF analyst Eric Balchunas expressed confidence that holding Bitcoin is in the “best interest” of spot ETF issuers, stating that spot Bitcoin ETFs are essentially the “same thing” as physically backed gold ETFs.
