Fidelity Bitcoin Index Fund

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w3ldon
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Fidelity Bitcoin Index Fund

Post by w3ldon »

I know cryptocurrency is not thought of highly on this forum, but I thought this might be a more boglehead way to invest in cryptocurrencies.

It is called the Wise Origin Bitcoin Index Fund I from Fidelity. Minimum investment is $100,000, which I think may be a nonstarter, for me at least (1% of portfolio is in BTC).

https://sec.report/Document/0001822414-20-000002/

Thoughts? Would you do this over just investing in Bitcoin for a high volatility, high reward asset?
Impatience
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Re: Fidelity Bitcoin Index Fund

Post by Impatience »

An index fund to invest in a single asset? Seems to defeat the purpose, especially as bitcoin can be broken down into trivially small denominations (satoshis). If I wanted to own BTC I’d buy some on a low-fee exchange then park them in Coinbase myself. No minimum, no fees aside from a tiny transaction fee and the bid/ask spread.
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w3ldon
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Re: Fidelity Bitcoin Index Fund

Post by w3ldon »

My hope was that it was actually going to be a cryptocurrency index fund (own the entire, or large part of the market), and the 'Bitcoin' in the title is kind of a misnomer. But I haven't been able to find specific details about what it would hold.
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Re: Fidelity Bitcoin Index Fund

Post by retired@50 »

w3ldon wrote: Sat Aug 29, 2020 12:21 pm But I haven't been able to find specific details about what it would hold.
Unless I misunderstand cryptocurrencies, you'd be part owner of some 0s and 1s on a hard drive somewhere (or perhaps it's spread across multiple hard drives for redundancy). I really don't see how this is anything but pure speculation.

Regards,
This is one person's opinion. Nothing more.
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Re: Fidelity Bitcoin Index Fund

Post by go140point6 »

Impatience wrote: Sat Aug 29, 2020 12:17 pm An index fund to invest in a single asset? Seems to defeat the purpose, especially as bitcoin can be broken down into trivially small denominations (satoshis). If I wanted to own BTC I’d buy some on a low-fee exchange then park them in Coinbase myself. No minimum, no fees aside from a tiny transaction fee and the bid/ask spread.
Although Coinbase is a reputable exchange, never store your crypto on a exchange. Not your keys, not your crypto... if the OP really decides to buy and hold crypto, invest in a hardware wallet (like a ledger nano) to store the "investment"...

But yes, i agree with other posters... a single asset is not really an ETF that i would consider... the crypto world, regardless of bogelhead philosophy, is not just BTC... there are many teams trying to solve problems for different issues... whether that is regulated gambling, international money transfer, you name it... but picking the "winner" is like picking the powerball numbers... gambling... do you feel lucky?
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Re: Fidelity Bitcoin Index Fund

Post by TheTimeLord »

retired@50 wrote: Sat Aug 29, 2020 2:09 pm
w3ldon wrote: Sat Aug 29, 2020 12:21 pm But I haven't been able to find specific details about what it would hold.
Unless I misunderstand cryptocurrencies, you'd be part owner of some 0s and 1s on a hard drive somewhere (or perhaps it's spread across multiple hard drives for redundancy). I really don't see how this is anything but pure speculation.

Regards,
For the sake of argument, as opposed to pieces or paper with numbers printed on it that are often stored as 1s and 0s in computer systems? When you give some a check and they deposit it in their account does it ever become physical currency during the transaction. Does one bank send the other bank a stack of bills?
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Re: Fidelity Bitcoin Index Fund

Post by whodidntante »

You can buy bitcoin futures instead. 5 BTC per contract.
https://www.cmegroup.com/trading/equity ... tions.html
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Re: Fidelity Bitcoin Index Fund

Post by 000 »

Isn't the whole point of Bitcoin that it doesn't depend on financial institutions or governments? :oops:
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Re: Fidelity Bitcoin Index Fund

Post by whodidntante »

000 wrote: Sat Aug 29, 2020 7:50 pm Isn't the whole point of Bitcoin that it doesn't depend on financial institutions or governments? :oops:
That is a point of bitcoin, but not the only point.
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Re: Fidelity Bitcoin Index Fund

Post by Mindbender »

I’ve never understood the need for crypto funds. Why not invest directly into the asset? Just buy bitcoin. That way you can actually own it.
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Re: Fidelity Bitcoin Index Fund

Post by 000 »

whodidntante wrote: Sat Aug 29, 2020 7:52 pm
000 wrote: Sat Aug 29, 2020 7:50 pm Isn't the whole point of Bitcoin that it doesn't depend on financial institutions or governments? :oops:
That is a point of bitcoin, but not the only point.
I think Bitcoin was created to allow individuals to transact without banks or governments. :idea:

I guess you may be jokingly referring to speculation as another point of bitcoin. :mrgreen:

Anyway, if someone wants to own Bitcoin, why not buy and hold it directly in one's own wallet? :?:
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Re: Fidelity Bitcoin Index Fund

Post by whodidntante »

000 wrote: Sat Aug 29, 2020 7:56 pm
whodidntante wrote: Sat Aug 29, 2020 7:52 pm
000 wrote: Sat Aug 29, 2020 7:50 pm Isn't the whole point of Bitcoin that it doesn't depend on financial institutions or governments? :oops:
That is a point of bitcoin, but not the only point.
I think Bitcoin was created to allow individuals to transact without banks or governments. :idea:

I guess you may be jokingly referring to speculation as another point of bitcoin. :shock:

Anyway, if someone wants to own Bitcoin, why not buy and hold it directly in one's own wallet? :?:
Like gold and commodities, some people buy BTC as a store of value or as an alternative to fiat currency. Each camp seems to have their arguments for why their investment is best. Yes, you could buy and hold bitcoin directly, but then you need to take care of storage and theft concerns. It is also more capital efficient to use futures.
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Re: Fidelity Bitcoin Index Fund

Post by Oregano »

whodidntante wrote: Sat Aug 29, 2020 7:52 pm
000 wrote: Sat Aug 29, 2020 7:50 pm Isn't the whole point of Bitcoin that it doesn't depend on financial institutions or governments? :oops:
That is a point of bitcoin, but not the only point.
No, that really was the point. The casino aspect showed up later.
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Re: Fidelity Bitcoin Index Fund

Post by 000 »

whodidntante wrote: Sat Aug 29, 2020 8:02 pm Like gold and commodities, some people buy BTC as a store of value or as an alternative to fiat currency. Each camp seems to have their arguments for why their investment is best. Yes, you could buy and hold bitcoin directly, but then you need to take care of storage and theft concerns. It is also more capital efficient to use futures.
What storage/theft concerns?
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Re: Fidelity Bitcoin Index Fund

Post by whodidntante »

000 wrote: Sat Aug 29, 2020 8:06 pm
whodidntante wrote: Sat Aug 29, 2020 8:02 pm Like gold and commodities, some people buy BTC as a store of value or as an alternative to fiat currency. Each camp seems to have their arguments for why their investment is best. Yes, you could buy and hold bitcoin directly, but then you need to take care of storage and theft concerns. It is also more capital efficient to use futures.
What storage/theft concerns?
Some teenager mines Bitcoin back when it was easy, assumes they are worthless and forgets about them, and sells or trashes the computer.

There are reports of BTC being irretrievably lost, stolen, or irrecoverably encrypted after the keys were lost. You have to ensure that you, and only you, retain possession.

What's that you say, just use a wallet? Here's a recent example of what can go wrong. The only guy who knew the password to a 190 million dollar bitcoin wallet took a business trip to India and died.
https://www.quadrigacxtrustee.com/
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Re: Fidelity Bitcoin Index Fund

Post by 000 »

whodidntante wrote: Sat Aug 29, 2020 8:26 pm Some teenager mines Bitcoin back when it was easy, assumes they are worthless and forgets about them, and sells or trashes the computer.

There are reports of BTC being irretrievably lost, stolen, or irrecoverably encrypted after the keys were lost. You have to ensure that you, and only you, retain possession.
Frankly, I'm not sure that someone who trusts a Fidelity spinoff's IT more than their own is a good candidate for owning BTC.

If anything, the creation of this fund should be a cautionary signal to Bitcoin bulls, like "When the shoe shiners start giving stock tips...".
whodidntante wrote: Sat Aug 29, 2020 8:26 pm What's that you say, just use a wallet? Here's a recent example of what can go wrong. The only guy who knew the password to a 190 million dollar bitcoin wallet took a business trip to India and died.
https://www.quadrigacxtrustee.com/
That seems like all the more reason to hold my own BTC keys on my own hardware.

How is Wise Origin escrowing the keys?
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Re: Fidelity Bitcoin Index Fund

Post by nisiprius »

Where's the prospectus? Or the draft prospectus? Or the ticker symbol?

Has the SEC, in fact, approved this?

Like everyone else reading this thread so far, I can't tell if the fund exists, exactly what kinds of assets it holds, what index it tracks, or how there can be such a thing as an index of a single asset.

And I agree that it is weird--it both really is Fidelity and really isn't Fidelity, at the same time. They apparently don't want their Fidelity® branding in the name of the fund.

Bloomberg uses the headline Fidelity launches inaugural bitcoin fund for wealthy investors, but the story contains the very odd comment that "A spokeswoman for Fidelity declined to comment on the filing." The story is clear that
it will begin to offer the Wise Origin Bitcoin Index Fund I through a new business unit called Fidelity Digital Funds. Peter Jubber, head of Fidelity Consulting, will run the new business unit... Fidelity Digital Assets will custody the fund.... The minimum investment is $100,000.
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Re: Fidelity Bitcoin Index Fund

Post by arcticpineapplecorp. »

this link is to sec.report, not sec.gov.

there's nothing at sec.gov under filings, edgar, etc that takes you to sec.report.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
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Re: Fidelity Bitcoin Index Fund

Post by tiburblium »

whodidntante wrote: Sat Aug 29, 2020 7:46 pm You can buy bitcoin futures instead. 5 BTC per contract.
https://www.cmegroup.com/trading/equity ... tions.html
+1
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Re: Fidelity Bitcoin Index Fund

Post by willthrill81 »

If you want to own Bitcoin, then buy it. You don't need an index fund for it.
retired@50 wrote: Sat Aug 29, 2020 2:09 pm
w3ldon wrote: Sat Aug 29, 2020 12:21 pm But I haven't been able to find specific details about what it would hold.
Unless I misunderstand cryptocurrencies, you'd be part owner of some 0s and 1s on a hard drive somewhere (or perhaps it's spread across multiple hard drives for redundancy).
Isn't that how the record of all of my investments is kept these days? :?
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Re: Fidelity Bitcoin Index Fund

Post by investing engineer »

w3ldon wrote: Sat Aug 29, 2020 12:07 pm I know cryptocurrency is not thought of highly on this forum, but I thought this might be a more boglehead way to invest in cryptocurrencies.

It is called the Wise Origin Bitcoin Index Fund I from Fidelity. Minimum investment is $100,000, which I think may be a nonstarter, for me at least (1% of portfolio is in BTC).

https://sec.report/Document/0001822414-20-000002/

Thoughts? Would you do this over just investing in Bitcoin for a high volatility, high reward asset?
Here's my thought. I would ask myself this key question: Do I need bitcoin in my portfolio? For every asset class, one must be clear about what role it plays in the portfolio. I can only think of one non-speculating purpose of bitcoin: Protection against massive financial collapse, similar to the purpose of gold buried in backyard. If this is its role, then, if I were to put in any money in bitcoin, I would do so by storing them on my own hard drive, not in some bitcoin exchange, not to mention "mutual fund" that holds bitcoins.

Having said this, you might have a different vision of what role bitcoin might play.
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Re: Fidelity Bitcoin Index Fund

Post by retired@50 »

willthrill81 wrote: Sat Aug 29, 2020 9:42 pm If you want to own Bitcoin, then buy it. You don't need an index fund for it.
retired@50 wrote: Sat Aug 29, 2020 2:09 pm
w3ldon wrote: Sat Aug 29, 2020 12:21 pm But I haven't been able to find specific details about what it would hold.
Unless I misunderstand cryptocurrencies, you'd be part owner of some 0s and 1s on a hard drive somewhere (or perhaps it's spread across multiple hard drives for redundancy).
Isn't that how the record of all of my investments is kept these days? :?
Sure, but stock and bond investments actually create dividends and interest and represent a real stake in a company's earnings or debt. Crypto is pure speculation in the sense that all you can do is simply hope that someone is willing to pay you more for it than you paid originally.

Regards,
This is one person's opinion. Nothing more.
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Re: Fidelity Bitcoin Index Fund

Post by retired@50 »

TheTimeLord wrote: Sat Aug 29, 2020 7:33 pm
retired@50 wrote: Sat Aug 29, 2020 2:09 pm
w3ldon wrote: Sat Aug 29, 2020 12:21 pm But I haven't been able to find specific details about what it would hold.
Unless I misunderstand cryptocurrencies, you'd be part owner of some 0s and 1s on a hard drive somewhere (or perhaps it's spread across multiple hard drives for redundancy). I really don't see how this is anything but pure speculation.

Regards,
For the sake of argument, as opposed to pieces or paper with numbers printed on it that are often stored as 1s and 0s in computer systems? When you give some a check and they deposit it in their account does it ever become physical currency during the transaction. Does one bank send the other bank a stack of bills?
See my response to willthrill81.

Regards,
This is one person's opinion. Nothing more.
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Re: Fidelity Bitcoin Index Fund

Post by w3ldon »

investing engineer wrote: Sat Aug 29, 2020 11:31 pm
Here's my thought. I would ask myself this key question: Do I need bitcoin in my portfolio? For every asset class, one must be clear about what role it plays in the portfolio. I can only think of one non-speculating purpose of bitcoin: Protection against massive financial collapse, similar to the purpose of gold buried in backyard. If this is its role, then, if I were to put in any money in bitcoin, I would do so by storing them on my own hard drive, not in some bitcoin exchange, not to mention "mutual fund" that holds bitcoins.

Having said this, you might have a different vision of what role bitcoin might play.
Thanks all for the responses. My thought is this: investing 1% of my portfolio in this asset (which I think is substantially different from different asset classes) with the potential high returns is worth the risk. I can tolerate a 1% total loss with the potential upside. Over some time periods, a 1% position in bitcoin has done as well as the S&P 500.

https://bitcoinist.com/sp-500-bitcoin-portfolio-gold/

My thought with the fund is, in theory, it would be nice to have an index fund that included the entire market capitalization of cryptocurrency assets, so that you would not be betting on a single asset. I think that would be the most boglehead way to add this high volatility, high return asset class to a portfolio. Right now, having 1% of my portfolio in BTC is not risky for the overall portfolio, but I would feel better putting that in an index that is distributed over the entire market capitalization. I have 0 confidence in my ability to pick which other coins warrant a portion of this allocation.
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Re: Fidelity Bitcoin Index Fund

Post by nisiprius »

The more I think about it, the more likely I think it is that this fund (if it exists) does not own bitcoin at all. It is probably some kind of futures-and-derivatives trip, and the word "index" somehow expresses the idea that the portfolio of futures and derivatives will be managed with the goal of getting it to track the price of bitcoin--with the customary footnote saying that the managers give no assurance that the goal will be realized.

Quite possibly it will take creative active management of the actual assets to realize this passive goal.

Since AFAIK the SEC has not yet approved any cryptocurrency-holding ETFs, I would be surprised if they would approve the same thing in the form of a mutual fund--unless they are about to open the floodgates and invite all the bitcoin ETFs they previously rejected to come try again.

There once was a "NASDAQ-100 index fund" whose portfolio was something like 99.8% QQQ and 0.2% money market funds. Could this Fidelity fund has a portfolio of 99.8% GBTC and 0.2% money market funds? Just kidding.
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Re: Fidelity Bitcoin Index Fund

Post by willthrill81 »

retired@50 wrote: Sat Aug 29, 2020 11:46 pm
willthrill81 wrote: Sat Aug 29, 2020 9:42 pm If you want to own Bitcoin, then buy it. You don't need an index fund for it.
retired@50 wrote: Sat Aug 29, 2020 2:09 pm
w3ldon wrote: Sat Aug 29, 2020 12:21 pm But I haven't been able to find specific details about what it would hold.
Unless I misunderstand cryptocurrencies, you'd be part owner of some 0s and 1s on a hard drive somewhere (or perhaps it's spread across multiple hard drives for redundancy).
Isn't that how the record of all of my investments is kept these days? :?
Sure, but stock and bond investments actually create dividends and interest and represent a real stake in a company's earnings or debt. Crypto is pure speculation in the sense that all you can do is simply hope that someone is willing to pay you more for it than you paid originally.

Regards,
That's true but has nothing to do with merely owning a bunch of ones and zeroes.
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Re: Fidelity Bitcoin Index Fund

Post by LBTRS »

retired@50 wrote: Sat Aug 29, 2020 11:46 pm Sure, but stock and bond investments actually create dividends and interest and represent a real stake in a company's earnings or debt. Crypto is pure speculation in the sense that all you can do is simply hope that someone is willing to pay you more for it than you paid originally.

Regards,
I'm not advocating for or against crypto currencies just pointing out that your understanding isn't quite right. There are many ways to earn "interest" off of your crypto assets along with any speculation on the coin price.

I own crypto assets and while there is fluctuation in the coin price (speculation/volatility) I'm earning 18% per year in "interest" just for holding and staking that crypto currency. You can readily earn 6.5% on any Bitcoin holdings you have.

I own some crypto assets but would never recommend anyone purchase crypto with money they should be saving for retirement or their emergency fund. I hold crypto in my hobby investment account along with some other non-traditional investments. Again, my post was just to clarify the point to the person I quoted and not advocating for or against crypto currencies.
Last edited by LBTRS on Sun Aug 30, 2020 3:04 pm, edited 1 time in total.
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Re: Fidelity Bitcoin Index Fund

Post by retired@50 »

LBTRS wrote: Sun Aug 30, 2020 2:35 pm
retired@50 wrote: Sat Aug 29, 2020 11:46 pm Sure, but stock and bond investments actually create dividends and interest and represent a real stake in a company's earnings or debt. Crypto is pure speculation in the sense that all you can do is simply hope that someone is willing to pay you more for it than you paid originally.

Regards,
I'm not advocating for or against crypto currencies just pointing out that your understanding isn't quite right. There are many ways to earn "interest" off of your crypto assets along with any speculation on the coin price.

I own crypto assets and while there is fluctuation in the coin price (speculation) I'm earning 18% per year in "interest" just for holding and staking that crypto currency. You can readily earn 6.5% on any Bitcoin holdings you have.

I own some crypto assets but would never recommend anyone purchase crypto with money they should be saving for retirement or their emergency fund. I hold crypto in my hobby investment account along with some other non-traditional investments. Again, my post was just to clarify the point to the person I quoted and not advocating for or against crypto currencies.
So, if I'm understanding your post, you're earning additional bitcoin, deposited to your bitcoin account. So, after some amount of time, you could own 10 bitcoin instead of 5 bitcoin?

Regards,
This is one person's opinion. Nothing more.
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Re: Fidelity Bitcoin Index Fund

Post by LBTRS »

retired@50 wrote: Sun Aug 30, 2020 3:02 pm
LBTRS wrote: Sun Aug 30, 2020 2:35 pm
retired@50 wrote: Sat Aug 29, 2020 11:46 pm Sure, but stock and bond investments actually create dividends and interest and represent a real stake in a company's earnings or debt. Crypto is pure speculation in the sense that all you can do is simply hope that someone is willing to pay you more for it than you paid originally.

Regards,
I'm not advocating for or against crypto currencies just pointing out that your understanding isn't quite right. There are many ways to earn "interest" off of your crypto assets along with any speculation on the coin price.

I own crypto assets and while there is fluctuation in the coin price (speculation) I'm earning 18% per year in "interest" just for holding and staking that crypto currency. You can readily earn 6.5% on any Bitcoin holdings you have.

I own some crypto assets but would never recommend anyone purchase crypto with money they should be saving for retirement or their emergency fund. I hold crypto in my hobby investment account along with some other non-traditional investments. Again, my post was just to clarify the point to the person I quoted and not advocating for or against crypto currencies.
So, if I'm understanding your post, you're earning additional bitcoin, deposited to your bitcoin account. So, after some amount of time, you could own 10 bitcoin instead of 5 bitcoin?

Regards,
Exactly, and I'm able covert the bitcoin that I earn into US dollars (or any other fiat currency or crypto currency) as soon as it is earned (paid every 7 days) or as you said, I can let it accumulate as bitcoin if I want.
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Re: Fidelity Bitcoin Index Fund

Post by brad.clarkston »

w3ldon wrote: Sun Aug 30, 2020 8:45 am Thanks all for the responses. My thought is this: investing 1% of my portfolio in this asset (which I think is substantially different from different asset classes) with the potential high returns is worth the risk. I can tolerate a 1% total loss with the potential upside. Over some time periods, a 1% position in bitcoin has done as well as the S&P 500.
Anything less than 10% of port is a rounding error, 1% is less than that. What your really saying is you can not tolerate any loss on the money invested.

I do not invest less than 10% of port and would not own a crptyo fund. I have owned bitcoin back in the early days from mining but cashed out of it awhile ago and will not look back as it's way past saturation.
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Re: Fidelity Bitcoin Index Fund

Post by ballons »

retired@50 wrote: Sat Aug 29, 2020 11:46 pm
willthrill81 wrote: Sat Aug 29, 2020 9:42 pm If you want to own Bitcoin, then buy it. You don't need an index fund for it.
retired@50 wrote: Sat Aug 29, 2020 2:09 pm
w3ldon wrote: Sat Aug 29, 2020 12:21 pm But I haven't been able to find specific details about what it would hold.
Unless I misunderstand cryptocurrencies, you'd be part owner of some 0s and 1s on a hard drive somewhere (or perhaps it's spread across multiple hard drives for redundancy).
Isn't that how the record of all of my investments is kept these days? :?
Sure, but stock and bond investments actually create dividends and interest and represent a real stake in a company's earnings or debt. Crypto is pure speculation in the sense that all you can do is simply hope that someone is willing to pay you more for it than you paid originally.

Regards,
Bitcoin miner stock would be great to invest in; however it appears the largest miners are nation states and specifically China. Strike number 85 against bitcoin.
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Re: Fidelity Bitcoin Index Fund

Post by nisiprius »

Is this, in fact, a mutual fund at all? The relevant form linked by the original poster has a strange-looking checkbox. In answer to the question, "Is the issuer registered as an investment company under the Investment Company Act of 1940," I can't tell for sure if this means "yes" or "no," but I'm thinking "no."

Image



Seeing if I could understand the colorful name "Wise Origin," a search didn't turn up much except a "Wise Origin College" in the UK, which is not an institution of higher learning but, apparently, an institution that places individuals into apprenticeships, mostly customer service position apprenticeships. Not much about them online. Presumably a pure coincidence in the name.
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Re: Fidelity Bitcoin Index Fund

Post by ballons »

LBTRS wrote: Sun Aug 30, 2020 3:08 pm
retired@50 wrote: Sun Aug 30, 2020 3:02 pm
LBTRS wrote: Sun Aug 30, 2020 2:35 pm
retired@50 wrote: Sat Aug 29, 2020 11:46 pm Sure, but stock and bond investments actually create dividends and interest and represent a real stake in a company's earnings or debt. Crypto is pure speculation in the sense that all you can do is simply hope that someone is willing to pay you more for it than you paid originally.

Regards,
I'm not advocating for or against crypto currencies just pointing out that your understanding isn't quite right. There are many ways to earn "interest" off of your crypto assets along with any speculation on the coin price.

I own crypto assets and while there is fluctuation in the coin price (speculation) I'm earning 18% per year in "interest" just for holding and staking that crypto currency. You can readily earn 6.5% on any Bitcoin holdings you have.

I own some crypto assets but would never recommend anyone purchase crypto with money they should be saving for retirement or their emergency fund. I hold crypto in my hobby investment account along with some other non-traditional investments. Again, my post was just to clarify the point to the person I quoted and not advocating for or against crypto currencies.
So, if I'm understanding your post, you're earning additional bitcoin, deposited to your bitcoin account. So, after some amount of time, you could own 10 bitcoin instead of 5 bitcoin?

Regards,
Exactly, and I'm able covert the bitcoin that I earn into US dollars (or any other fiat currency or crypto currency) as soon as it is earned (paid every 7 days) or as you said, I can let it accumulate as bitcoin if I want.
Very easy to find this so-called "fintech" company.

You take dollars and convert them to bitcoin. You take bitcoin and give this to a company and get tokens. They lend out tokens to other people. Others have to feed in 5.9% of fiat money to repay these tokens.

This company will also allow people to completely skip bitcoin completely taking fiat cash directly and still pay 10% somehow.

Some see the obvious red flags. Some see :greedy
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Re: Fidelity Bitcoin Index Fund

Post by Doodadooh »

Unless you're tech savvy and security conscious, I would not recommend buying BTC directly.
You might want to consider buying into a tracking index like GBTC or ETCG (Ethereum) Granted there is a high premium on these trackers and low volume but if we're talking about a long term investment with play money then you might sleep easier here.
Northern Flicker
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Re: Fidelity Bitcoin Index Fund

Post by Northern Flicker »

investing engineer wrote: Here's my thought. I would ask myself this key question: Do I need bitcoin in my portfolio? For every asset class, one must be clear about what role it plays in the portfolio. I can only think of one non-speculating purpose of bitcoin: Protection against massive financial collapse, similar to the purpose of gold buried in backyard. If this is its role, then, if I were to put in any money in bitcoin, I would do so by storing them on my own hard drive, not in some bitcoin exchange, not to mention "mutual fund" that holds bitcoins.
If there is a massive financial collapse, I would not want to be depending on any asset whose only value is if you can find someone willing to buy it from you.
Risk is not a guarantor of return.
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TheTimeLord
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Re: Fidelity Bitcoin Index Fund

Post by TheTimeLord »

Northern Flicker wrote: Thu Sep 10, 2020 11:34 pm
investing engineer wrote: Here's my thought. I would ask myself this key question: Do I need bitcoin in my portfolio? For every asset class, one must be clear about what role it plays in the portfolio. I can only think of one non-speculating purpose of bitcoin: Protection against massive financial collapse, similar to the purpose of gold buried in backyard. If this is its role, then, if I were to put in any money in bitcoin, I would do so by storing them on my own hard drive, not in some bitcoin exchange, not to mention "mutual fund" that holds bitcoins.
If there is a massive financial collapse, I would not want to be depending on any asset whose only value is if you can find someone willing to buy it from you.
Isn't any asset only worth what someone is willing to give you in exchange for it?
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Re: Fidelity Bitcoin Index Fund

Post by am »

Northern Flicker wrote: Thu Sep 10, 2020 11:34 pm
investing engineer wrote: Here's my thought. I would ask myself this key question: Do I need bitcoin in my portfolio? For every asset class, one must be clear about what role it plays in the portfolio. I can only think of one non-speculating purpose of bitcoin: Protection against massive financial collapse, similar to the purpose of gold buried in backyard. If this is its role, then, if I were to put in any money in bitcoin, I would do so by storing them on my own hard drive, not in some bitcoin exchange, not to mention "mutual fund" that holds bitcoins.
If there is a massive financial collapse, I would not want to be depending on any asset whose only value is if you can find someone willing to buy it from you.
Are you talking about stocks, bitcoin or both? Stocks are only worth what someone is willing to pay. If US has a massive financial collapse, at least my bitcoin may still have value when I flee to Costa Rica.
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Re: Fidelity Bitcoin Index Fund

Post by retired@50 »

am wrote: Fri Sep 11, 2020 8:27 am
Northern Flicker wrote: Thu Sep 10, 2020 11:34 pm
investing engineer wrote: Here's my thought. I would ask myself this key question: Do I need bitcoin in my portfolio? For every asset class, one must be clear about what role it plays in the portfolio. I can only think of one non-speculating purpose of bitcoin: Protection against massive financial collapse, similar to the purpose of gold buried in backyard. If this is its role, then, if I were to put in any money in bitcoin, I would do so by storing them on my own hard drive, not in some bitcoin exchange, not to mention "mutual fund" that holds bitcoins.
If there is a massive financial collapse, I would not want to be depending on any asset whose only value is if you can find someone willing to buy it from you.
Are you talking about stocks, bitcoin or both? Stocks are only worth what someone is willing to pay. If US has a massive financial collapse, at least my bitcoin may still have value when I flee to Costa Rica.
Since when do you need to sell stocks to receive money from them?

What about the quarterly dividend payments I've been receiving all these years? From what I understand, I only receive those payments because I'm a shareholder. If I sell to someone else, regardless of what price I receive from the buyer, the dividend payments will stop flowing to me, and start flowing to the new shareholder. I'm having a hard time imagining that every company on earth will stop paying dividends all at once.

What's the dividend payout on the Fidelity Bitcoin Index Fund?

Regards,
This is one person's opinion. Nothing more.
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arcticpineapplecorp.
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Re: Fidelity Bitcoin Index Fund

Post by arcticpineapplecorp. »

am wrote: Fri Sep 11, 2020 8:27 am
Northern Flicker wrote: Thu Sep 10, 2020 11:34 pm
investing engineer wrote: Here's my thought. I would ask myself this key question: Do I need bitcoin in my portfolio? For every asset class, one must be clear about what role it plays in the portfolio. I can only think of one non-speculating purpose of bitcoin: Protection against massive financial collapse, similar to the purpose of gold buried in backyard. If this is its role, then, if I were to put in any money in bitcoin, I would do so by storing them on my own hard drive, not in some bitcoin exchange, not to mention "mutual fund" that holds bitcoins.
If there is a massive financial collapse, I would not want to be depending on any asset whose only value is if you can find someone willing to buy it from you.
Are you talking about stocks, bitcoin or both? Stocks are only worth what someone is willing to pay. If US has a massive financial collapse, at least my bitcoin may still have value when I flee to Costa Rica.
stocks also have an intrinsic value. Companies own things that can be sold if/when need be, like factories, supplies, intellectual property, etc. Bitcoin does not have any inherent value except what some think it's worth at any given moment. But companies will continue to provide products to people who need and/or want them.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
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Re: Fidelity Bitcoin Index Fund

Post by aristotelian »

I grabbed a bonus at Sofi Invest, $25 for $10 of BTC. The transaction was very simple. I am not sure who has my "key" or how it works but I don't see any reason to buy through an index fund if it can be purchased directly.
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Re: Fidelity Bitcoin Index Fund

Post by jason2459 »

am wrote: Fri Sep 11, 2020 8:27 am
Northern Flicker wrote: Thu Sep 10, 2020 11:34 pm
investing engineer wrote: Here's my thought. I would ask myself this key question: Do I need bitcoin in my portfolio? For every asset class, one must be clear about what role it plays in the portfolio. I can only think of one non-speculating purpose of bitcoin: Protection against massive financial collapse, similar to the purpose of gold buried in backyard. If this is its role, then, if I were to put in any money in bitcoin, I would do so by storing them on my own hard drive, not in some bitcoin exchange, not to mention "mutual fund" that holds bitcoins.
If there is a massive financial collapse, I would not want to be depending on any asset whose only value is if you can find someone willing to buy it from you.
Are you talking about stocks, bitcoin or both? Stocks are only worth what someone is willing to pay. If US has a massive financial collapse, at least my bitcoin may still have value when I flee to Costa Rica.

Stocks have basic fundamentals like earnings and sales growth that determine the long term values which drives the short term speculation. If that value shifts the speculative pricing quickly shifts as well.

Commodities are worth only based on speculative pricing. You hope someone is willing to pay more for something then what you paid for it but they sometimes have some fundamentals based on current collectable desires and supply/demand.

Currency not based on a commodity like a precious metal is based on even less criteria. It's only priced based on what someone is willing to pay for it or what someone (like a government) says it's worth.
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Re: Fidelity Bitcoin Index Fund

Post by 000 »

arcticpineapplecorp. wrote: Fri Sep 11, 2020 10:59 am
am wrote: Fri Sep 11, 2020 8:27 am
Northern Flicker wrote: Thu Sep 10, 2020 11:34 pm
investing engineer wrote: Here's my thought. I would ask myself this key question: Do I need bitcoin in my portfolio? For every asset class, one must be clear about what role it plays in the portfolio. I can only think of one non-speculating purpose of bitcoin: Protection against massive financial collapse, similar to the purpose of gold buried in backyard. If this is its role, then, if I were to put in any money in bitcoin, I would do so by storing them on my own hard drive, not in some bitcoin exchange, not to mention "mutual fund" that holds bitcoins.
If there is a massive financial collapse, I would not want to be depending on any asset whose only value is if you can find someone willing to buy it from you.
Are you talking about stocks, bitcoin or both? Stocks are only worth what someone is willing to pay. If US has a massive financial collapse, at least my bitcoin may still have value when I flee to Costa Rica.
stocks also have an intrinsic value. Companies own things that can be sold if/when need be, like factories, supplies, intellectual property, etc. Bitcoin does not have any inherent value except what some think it's worth at any given moment. But companies will continue to provide products to people who need and/or want them.
Unless you can personally operate the business to produce things that you yourself value (e.g. owner-operated farm), none of that matters. It is only worth what someone else is willing to pay.

How much of MSFT, AAPL, GOOG, or FB's value is in factories or supplies? How much is their intellectual property worth if people start disliking their software?
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arcticpineapplecorp.
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Re: Fidelity Bitcoin Index Fund

Post by arcticpineapplecorp. »

000 wrote: Fri Sep 11, 2020 3:41 pm
arcticpineapplecorp. wrote: Fri Sep 11, 2020 10:59 am
am wrote: Fri Sep 11, 2020 8:27 am
Northern Flicker wrote: Thu Sep 10, 2020 11:34 pm
investing engineer wrote: Here's my thought. I would ask myself this key question: Do I need bitcoin in my portfolio? For every asset class, one must be clear about what role it plays in the portfolio. I can only think of one non-speculating purpose of bitcoin: Protection against massive financial collapse, similar to the purpose of gold buried in backyard. If this is its role, then, if I were to put in any money in bitcoin, I would do so by storing them on my own hard drive, not in some bitcoin exchange, not to mention "mutual fund" that holds bitcoins.
If there is a massive financial collapse, I would not want to be depending on any asset whose only value is if you can find someone willing to buy it from you.
Are you talking about stocks, bitcoin or both? Stocks are only worth what someone is willing to pay. If US has a massive financial collapse, at least my bitcoin may still have value when I flee to Costa Rica.
stocks also have an intrinsic value. Companies own things that can be sold if/when need be, like factories, supplies, intellectual property, etc. Bitcoin does not have any inherent value except what some think it's worth at any given moment. But companies will continue to provide products to people who need and/or want them.
Unless you can personally operate the business to produce things that you yourself value (e.g. owner-operated farm), none of that matters. It is only worth what someone else is willing to pay.

How much of MSFT, AAPL, GOOG, or FB's value is in factories or supplies? How much is their intellectual property worth if people start disliking their software?
I predicted you would pick those companies. so none of the other companies like nike, mcdonalds, proctor and gamble, home depot, comcast, costco, walmart, pepsi, coke, and all other companies in the stock market (pharmaceuticals, industrial, telecommunications, utilities and so on) don't really matter or have no intrinsic value...but bitcoin does???
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
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Re: Fidelity Bitcoin Index Fund

Post by 000 »

arcticpineapplecorp. wrote: Fri Sep 11, 2020 3:58 pm I predicted you would pick those companies. so none of the other companies like nike, mcdonalds, proctor and gamble, home depot, comcast, costco, walmart, pepsi, coke, and all other companies in the stock market (pharmaceuticals, industrial, telecommunications, utilities and so on) don't really matter or have no intrinsic value...but bitcoin does???
Seeing as those are some of the top companies in the US index, it seems reasonable to ask about them in the context of your claims.

Your answer is non-responsive because it does not address their valuations.

Nevertheless, I will indulge you a bit: Nike owns no (or few?) factories and the vast majority of its value is in its brand name. Mostly ditto for McDonalds. And Pepsi. And Coke.

And all of the stocks you listed are only worth what someone else is willing to pay. The market doesn't have to value stocks fairly.

I also never said bitcoin had any value, intrinsic or otherwise.
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Re: Fidelity Bitcoin Index Fund

Post by Northern Flicker »

TheTimeLord wrote: Thu Sep 10, 2020 11:44 pm
Northern Flicker wrote: Thu Sep 10, 2020 11:34 pm
investing engineer wrote: Here's my thought. I would ask myself this key question: Do I need bitcoin in my portfolio? For every asset class, one must be clear about what role it plays in the portfolio. I can only think of one non-speculating purpose of bitcoin: Protection against massive financial collapse, similar to the purpose of gold buried in backyard. If this is its role, then, if I were to put in any money in bitcoin, I would do so by storing them on my own hard drive, not in some bitcoin exchange, not to mention "mutual fund" that holds bitcoins.
If there is a massive financial collapse, I would not want to be depending on any asset whose only value is if you can find someone willing to buy it from you.
Isn't any asset only worth what someone is willing to give you in exchange for it?
No. Some assets like residential real estate provide you with a place to live independently of what its market value may be. Stocks and bonds are claims on assets (if any) of the issuer.
Risk is not a guarantor of return.
lifeisinmirrors
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Re: Fidelity Bitcoin Index Fund

Post by lifeisinmirrors »

I think Bitcoins are lost or stolen so frequently that they're not really suitable as a long-term investment. This has happened to plenty of people or companies that are a lot more sophisticated than I am in this area.
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Re: Fidelity Bitcoin Index Fund

Post by oldcomputerguy »

The discussion has drifted from the original topic (discussion of the Fidelity fund) to a general argument over cryptocurrencies. Please bring the discussion back to the original topic. Thanks.
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TheTimeLord
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Re: Fidelity Bitcoin Index Fund

Post by TheTimeLord »

Northern Flicker wrote: Sat Sep 12, 2020 1:33 am
TheTimeLord wrote: Thu Sep 10, 2020 11:44 pm
Northern Flicker wrote: Thu Sep 10, 2020 11:34 pm
investing engineer wrote: Here's my thought. I would ask myself this key question: Do I need bitcoin in my portfolio? For every asset class, one must be clear about what role it plays in the portfolio. I can only think of one non-speculating purpose of bitcoin: Protection against massive financial collapse, similar to the purpose of gold buried in backyard. If this is its role, then, if I were to put in any money in bitcoin, I would do so by storing them on my own hard drive, not in some bitcoin exchange, not to mention "mutual fund" that holds bitcoins.
If there is a massive financial collapse, I would not want to be depending on any asset whose only value is if you can find someone willing to buy it from you.
Isn't any asset only worth what someone is willing to give you in exchange for it?
No. Some assets like residential real estate provide you with a place to live independently of what its market value may be. Stocks and bonds are claims on assets (if any) of the issuer.
Would it make you feel better if we change the word from asset to investment.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]
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F150HD
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Re: Fidelity Bitcoin Index Fund

Post by F150HD »

w3ldon wrote: Sat Aug 29, 2020 12:07 pm I know cryptocurrency is not thought of highly on this forum, but I thought this might be a more boglehead way to invest in cryptocurrencies.

It is called the Wise Origin Bitcoin Index Fund I from Fidelity. Minimum investment is $100,000, which I think may be a nonstarter, for me at least (1% of portfolio is in BTC).

https://sec.report/Document/0001822414-20-000002/

Thoughts? Would you do this over just investing in Bitcoin for a high volatility, high reward asset?
LOL

"Fidelity Bitcoin Index Fund"

Thought this was a joke. A fund like this could break this board. :happy
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Re: Fidelity Bitcoin Index Fund

Post by HomerJ »

F150HD wrote: Sat Sep 12, 2020 10:05 am
w3ldon wrote: Sat Aug 29, 2020 12:07 pm I know cryptocurrency is not thought of highly on this forum, but I thought this might be a more boglehead way to invest in cryptocurrencies.

It is called the Wise Origin Bitcoin Index Fund I from Fidelity. Minimum investment is $100,000, which I think may be a nonstarter, for me at least (1% of portfolio is in BTC).

https://sec.report/Document/0001822414-20-000002/

Thoughts? Would you do this over just investing in Bitcoin for a high volatility, high reward asset?
LOL

"Fidelity Bitcoin Index Fund"

Thought this was a joke. A fund like this could break this board. :happy
Yeah that doesn't make much sense. "Cryptocurrency Fund" maybe. But "BitCoin Fund"? That's like starting a mutual fund called "Amazon Index Fund" that is 100% Amazon stock.

It's ONE investment.

Plus, where is the word "Index" coming from? What Index?
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
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