What Are Bitcoin ETF Buyers Investing In?

Mohamed El-Erian’s recent appearance on CNBC sparked a fresh wave of debate in the crypto community. 

The investor hailed the launch of 11 spot Bitcoin ETFs as a significant milestone for the cryptocurrency’s investment credentials. El-Erian also suggested that this development does little to cement Bitcoin’s status as a real currency.

This nuanced take caught the attention of Bitcoin skeptic Peter Schiff, who quickly turned to X to amplify this debate. “If Bitcoin isn’t a digital currency, then what exactly are ETF buyers investing in?” Schiff pondered. 

Speculative casinos

Schiff’s pointed question to investors into these new ETFs probes deeper into the heart of what Bitcoin really represents if it falls short of being a true digital currency.

In his latest comments, Schiff has been vocal in labeling the U.S.-listed spot Bitcoin ETFs as speculative tools rather than legitimate investment vehicles. 

Schiff, a long-time skeptic of Bitcoin, views the cryptocurrency as a failed digital currency, with its primary achievement lying in its speculative nature. 

According to Schiff, the approval and launch of these ETFs would serve as a gateway for a new wave of speculators, akin to casinos. 

His stance not only questions the intrinsic value of Bitcoin but also casts doubt on the regulatory framework overseen by institutions like the SEC, which he believes misguidedly endorses Bitcoin through the approval of these ETFs.

Bitcoin’s Nirvana moment? 

The approval of Bitcoin spot ETFs has generated considerable hype, reflected in the total trading volume surpassing $1 billion. 

Bloomberg’s Eric Balchunas commented on the potential cultural impact of a Bitcoin ETF potentially surpassing an ESG (Environmental, Social and Governance) climate ETF in popularity. 

He likened such an event to a significant moment in music history – when Nirvana’s “Nevermind” album famously dethroned Michael Jackson’s “Dangerous” in 1991.