Put the Bitcoins Back in the Box

See below for excerpts from a recent Money Stuff feature by Matt Levine.
Please note:  RDC is not the author of this article and is not responsible for the content and accuracy of the information contained therein. 

If your interest in crypto is “number go up,” this is good. If your interest in crypto is “this is the financial system of the future and will increasingly be adopted by big institutions and ordinary people,” this is a mixed bag: On the one hand, there is a lot of optimism about ETF approval driving retail and institutional adoption; on the other hand, “everyone owns Bitcoin through a BlackRock ETF in their Fidelity brokerage account” is not quite proof that crypto is the financial system of the future. If your interest in crypto is “crypto keeps coming up with fun new ways to do finance,” though, this is pretty boring. Crypto’s fun new way to do finance is to put Bitcoin in a box and sell you shares of the box; the goal is to transmute Bitcoin — this decentralized disintermediated trustless novel form of money that was meant to replace the banks and brokerages — into regular stocks.

Anyway while you wait for the ETF, here’s Bloomberg’s Muyao Shen:

As speculation about the upcoming approval or denial of spot-Bitcoin ETFs reaches a fever pitch, a group of former Citigroup Inc. executives is starting to offer securities backed by the oldest cryptocurrency that they say don’t need the blessing of US regulators.

The new offering, called Bitcoin depositary receipts, will be similar to American depositary receipts that represent foreign stocks. The startup, called Receipts Depositary Corporation, or RDC, said it plans to issue the first Bitcoin depositary receipts to qualified global institutional investors in transactions exempt from registration under the Securities Act of 1933.

And that strikes me as genuinely useful. Some investors want to be crypto investors, but a lot of institutional investors very much do not — they do not want to spend time or money on understanding blockchains or keeping track of private keys or complying with SEC requirements about crypto custody — but still want to own Bitcoin. Owning regular shares of stock that happen to be Bitcoins is, for them, very useful; it domesticates Bitcoin into the regular financial system. It’s just that that’s boring. In 2021, as FTX was heading toward a $32 billion valuation, its ambition was to tokenize all the stocks, become the next Goldman Sachs, rebuild all of the traditional financial system on crypto rails. In 2024, the ambition for crypto is to make Bitcoin a stock, to finally get crypto onto traditional rails.

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