Bitcoin’s ‘Panic Room Problem’ | Web3 Daily

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There’s a brand new downside being confronted by Bitcoin, and it’s a symptom of the ETFs.

(It’s the identical purpose why we’d by no means buy-in to them ourselves).

Don’t get us improper, we’re glad the Bitcoin ETFs exist!

However as a result of we’re particular person traders, we’re free to purchase and custody our personal Bitcoin, with out working into any regulatory/operational purple tape.

(Which is basically the issue the ETFs are fixing for big-dog traders).

And by holding custody over our personal Bitcoin, it means we are able to keep away from the “panic room downside.”

For those who’ve by no means heard of it, that’s as a result of we simply made it up.

However it’s meant to replicate a brand new sample we’re seeing within the crypto markets, pushed by the BTC ETFs.

It really works like this:

As a result of ETF shares are traded on US inventory exchanges — it means merchants can’t money out over the weekend. In the meantime, the Bitcoin market runs 24/7.

So if market instability strikes exterior of inventory buying and selling hours (e.g. the weekend), you simply have to sit down there and watch costs tumble till Monday.

(Form of like being locked up in a panic room, when you watch your own home get ransacked).

And this new paradigm can have a knock-on impact all through the week:

Merchants get spooked by value volatility over the weekend → they unload very first thing Monday → this causes extra additional value despair via the week.

Excellent news is:

The identical goes for the inverse — when costs go up over the weekend, it will probably spur upward value motion all through the week.

Both approach: we like our optionality — so self custody it’s.