The Most Useful Things New Bitcoin ETF Buyers Should Know

There's been a flood of inflows from people buying Bitcoin (BTC) using ETF funds. Along with this inflow has come a bull market as prices surge upwards and the supply of Bitcoin for purchase becomes less and less available. A class of investors has come along for this latest bull market—including people who may not have had exposure to Bitcoin before. This article is a round-up of the most helpful information Bitcoin ETF buyers should know, as (some of them) are getting into the Bitcoin game.

1- In Bitcoin, custody matters

A lesson that many Bitcoin holders have learned over the years is that the tiny word "custody" can mean a world of difference. When buying Bitcoin on an exchange or an ETF, you rely on a third party to hold the Bitcoin on your behalf. On the one hand, this can help keep thorny issues like losing your private keys at bay. If you have custody of your own Bitcoin, it becomes your responsibility. However, custody is at the heart of Bitcoin, and precisely, the ability to move your funds to anybody you want without a third-party custodian approving or censoring. Holding Bitcoin through an ETF can be a lesser responsibility than carrying it yourself - yet you can only achieve the full promise of Bitcoin's censorship-free utility and financial freedom by holding Bitcoin off an ETF. These days, solutions like Unchained and Casa can help you custody your own Bitcoin and provide you the security and flexibility you need without implementing everything on your own.

2- Bitcoin price predictions are all over the map

You'll see social media accounts and influencers talk about where the Bitcoin price will settle, with loads of technical analysis. An intelligent student of Bitcoin history can probably pattern-match event-driven price action. For example, there have been multiple Bitcoin halvings, and the dynamics and impacts of the halving on Bitcoin miners and the price of Bitcoin are somewhat clear. Likewise, Bitcoin has gone through state adoption (El Salvador) and rounds of bans from other countries (most notably China).

Yet, with extreme volatility, even predicting short-term effects can be a fool's errand. A cottage industry tries to "time" Bitcoin, with some influencers going out of their way to say that Bitcoin will be at a round number at a certain amount of time. Even seasoned experts, while having the logic right, can have the price and timing wildly off. As people who have followed Bitcoin often might observe, the best investment thesis is one of holding and learning. It is a challenging game to time Bitcoin markets - over the long term, on a logarithmic scale, though, Bitcoin has continued to trend upwards year-by-year if you separate the substance from the noise.

3- There's more to Bitcoin than just Bitcoin

Bitcoin has many believers and investors who think of it as digital gold - a censorship-free way of storing value that helps hedge against inflation. While that is one function of Bitcoin, if you stop there (for example, just by purchasing Bitcoin ETF shares), you can lose sight of a much larger ecosystem. For instance, the Lightning Network allows you to make instant payments in Bitcoin, allowing Bitcoin to become a viable medium of exchange and a way to interact with a growing amount of merchants.

Bitcoin also has its own media culture and social media networks that are adjacent built on Nostr. Bitcoin is more than just a store of value - and exploring it further beyond just the ETF and understanding more of how the technology works, why people are using it, and what companies build on Bitcoin will help educate you about the future of technology and economics much more than just holding Bitcoin ETFs passively. Of course, any Bitcoin is better than no Bitcoin exposure, but it goes beyond its price if you look deeper. Resources like Learn Me a Bitcoin, can help you take those first steps and dive deeper into interesting technical elements.

4- Bitcoin, not altcoins

Some investors have voiced confusion about the vast number of altcoins, chief among them Bitcoin's "rival" Ethereum ETH. What would stop some obscure meme-coin from displacing Bitcoin?

First, Bitcoin is the only cryptocurrency with an ETF option approved in US public markets because it has grown to a sophisticated enough degree that the infrastructure to support complex institutional investing, even country-level investing, exists. Second, Bitcoin has a unique origin story. With most altcoins, you can find early investors and a premine - when some living elite members got in early to secure a token now widely traded, which was true of Solana SOL and Ethereum. We know the founders of Ethereum and Solana - we don't know Satoshi - and since they have disappeared without a hitch, this can ensure that there won't be undue political pressure or elite pressure on Bitcoin. Bitcoin is now run independently enough by enough stakeholders to run on its own - it has yet to have uptime issues like Solana, and it has consistently maintained its record of verification and ability to empower transactions worldwide. From a proof and adoption standpoint, Bitcoin stands alone.

Buying into a Bitcoin ETF can be an exciting part of your Bitcoin journey. It may even be your first step, but it's essential to recognize that it shouldn't be your last if you want to learn and benefit thoroughly.