TL; DR
Full story
There’s a new problem facing Bitcoin, and it’s a symptom of the ETFs.
(It’s the same reason we would never do anything about it ourselves).
Don’t get us wrong: we’re happy that Bitcoin ETFs exist!
But because we are individual investors, we are free to buy and hold our own Bitcoin without getting caught up in regulatory/operational hassles.
(Which is essentially the problem the ETFs solve for big investors).
And by retaining custody of our own Bitcoin, it means we can avoid the ‘panic room problem’.
If you haven’t heard of it, that’s because we just made it up.
But it’s meant to reflect a new pattern we’re seeing in the crypto markets, driven by the BTC ETFs.
It goes like this:
Because ETF shares trade on US exchanges, this means traders won’t be able to cash out this weekend. Meanwhile, the Bitcoin market runs 24/7.
So if market instability strikes outside of stock trading hours (e.g. on weekends), all you have to do is watch as prices fall into Monday.
(A bit like being locked in a panic room, watching your house being ransacked).
And this new paradigm could have a domino effect all week long:
Traders are shocked by the price volatility this weekend → they immediately sell their price on Monday → this causes even more price drops during the week.
Good news is:
The same goes for the reverse: when prices rise over the weekend, it can fuel upward price movement throughout the week.
Either way, we like our optionality – so self-guardianship it is.