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I believe the fee = the ETF holds bitcoin securely for you instead of you having to deal with wallets.
by tock 3y ago
I believe the fee = the ETF holds bitcoin securely for you instead of you having to deal with wallets.
- 2OEH8eoCRo0 3y agoYes, how does the ETF hold and secure the coins is what I'm asking.
- thinkharderdev 3y agoI have no idea, but I assume that if they get hacked they are liable for that. If the ETF is run by Bob's Bitcoin ETF incorporated in the Virgin Islands then that's not worth anything because there are no other assets to cover losses. But if it's BlackRock (or some other large US money manager) then they have plenty of other assets to pay out.
- scrlk 3y agoBlackrock will be using Coinbase as their custodian: https://www.coinbase.com/prime/custody https://www.coinbase.com/prime/custody It's the institutional version of their Vault feature: https://www.coinbase.com/vault https://www.coinbase.com/vault > 98% of digital currency is stored totally offline, in geographically distributed safe deposit boxes and physical vaults.
- chollida1 3y agoThey use a custodian like Coinbase or Gemini. The ETF then takes out an insurance policy incase the custodian loses they BTC they hold on the ETF's behalf.
- tock 3y agoMost likely some sort of cold wallet. With some in hot wallets for liquidity. There are many crypto custodians who do this. Now they do have to design redundancies for the keys. eg. they should not lose access to the assets because say they made it too safe and cant find the keys anymore :p It's funny because it happened with Prime Trust a crypto custodian. But I'm sure a company like BlackRock can and will do better.