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So WTF is ETF? And Why RUG PULL?
The traditional exchange traded fund is a basket of securities that trade on an exchange just like a stock does. You know, you take a little Tesla, a little Apple, a little of this, a little of that and all that together can be traded as an ordinary stock, on an exchange.
This has some advantages. For example, you bought Facebook shares, and then it happens that Facebook disappears from the face of the earth for hours and the share price falls. Suddenly, your life becomes hell. Not only do you have to talk to your family on the phone, or worse, face to face, but you have lost money.
To avoid this kind of risk, you need to buy an ETF that has other companies in the basket, in addition to Facebook, whose price may increase and thus neutralize that loss.
The downside of an ETF is that it does not solve the problem with the family.
Bitcoin ETFs work exactly the same as other ETFs, but Bitcoin is the underlying asset.
To sumarize,
- A fund provider owns a lot of different stocks, bonds, commodities or currencies - the underlying assets.
- Then it designs a fund to track their performance and then sells shares in that fund to investors.
- Shareholders own a portion of an ETF, but they don’t own the underlying assets in the fund.
- Shareholders can trade ETFs in the same way as they trade stocks.
So far, it has not been possible to buy a Bitcoin ETF in the United States, and that will most likely change next week.
Well, why, despite such good news for the entire cryptocurrency market, you can hear people announcing Bitcoin rug pull?
Because it already happened in 2017.
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https://www.youtube.com/watch?v=r_OS1wW0QFg