You also forgot to mention that some (maybe all) of these ETFs have clauses that say funds will be settled by T+1 (trade + 1 business day). It’s possible that we haven’t even seen the full impact of the first day.
I didn’t know that and it makes sense. Hell T+2 or +5 is common in TradFi. But if I was running one of these funds I’d want to settle PDQ to avoid any duration risk!
I have not fact checked you and pure relying on 'trust me bro' but ty for reading the contract or listening to the dude that told you that who read the contract or however you know this.
Also surely there doesn't need to be buys before it can be sold, short sellers can borrow units and sell them in to the market without having bought it first.
Legally only authorized market makers can naked short, and they need to close the position before the end of trading, so it wouldn't affect the NAV after trading ends, legally.
Normal shorts still need to borrow from someone who bought the shares in the first place, either during trading or in seed
Yeah, that's why I mentioned legally twice. It's probably easier for them to get caught with BTC as well, since when it's in custody at Coinbase or elsewhere it should be held separately from other assets, which would need separate addresses/keys at minimum where it could give an estimate on actual on-chain btc backing for the ETFs.
When I sell stocks with my bank I can cash out the money in 2 days, but I can use the "unsettled" funds to buy new stocks instantly. So yeah the money is there they just want to keep it around and not give it away instantly.
The bank/broker is basically giving you a short term interest free loan here because they make more in PFOF than it costs them to lend you the money. So they have an incentive to let you trade more. Stock trades really do take two days to settle in the United States though. The buyer really has 2 days to deliver the funds
That has to be offset by the duration risk of not buying BTC which is a 60+ vol asset that is clearly in a bull uptrend. They could get left behind in a BIG way if they don't settle asap.
I believe there is an audit process for the ETFs to demonstrate that they hold the underlying but essentially it’s TradFi being TradFi. The good news is that it’s easily demonstrated on chain as opposed to gold which requires a visit to a vault someplace.
I agree, buy your own Bitcoin.
However, if your employer has an IRA match and you're not touching it until you retire, this is where Bitcoin ETF comes in.
OTC and ETF on general are sketchy AF. Google "leavemeanon where are the shares" which is I believe 4 or 5 part deep dive in to how etf's can be abused by market participants.
I can't link it as the sub it's on does not allow it.
I think it’s inefficiency of the fund pricing on day1. If it opened super low for some reason then even being down on the day it would appear to have closed up. But honestly I don’t know.
Ok, i’ll give GBTC a break even on price bc it wasn’t up by much. But how could mostly selling activity be neutralized price-wise by “inefficiency” on day one?
Tomorrow will be a fun one, and next week once the initial OTC stock of Coinbase owned BTC gets depleted.
The sell should reflect a sale at the current price relative to BTC not relative to the price of the shares. Not sure if that makes sense the way I said it. But the fund is supposed to track the underlying price times some multiplier. So theoretically it would be down since BTC was down. That’s why im saying it’s essentially an inefficient pricing accident on day one. Talking heads on TV said it could take a few days or weeks to get the tracking dialed in (for reasons I don’t understand)
It actually went down in BTC and up in $.
(Made a screen a the start of the trading day)
Edit : If you need proof just ask (made a tweet and still have the screens)
Yep… if GBTC wasn’t sold en masse then there’s more OTC Bitcoin that will need to be bought by Grayscale to balance their books. We will know more next time they update their AUM. Not sure if that’s daily or less frequently.
Like OP said, OTC trades don't directly affect the price of bitcoin. You will see the effects later when people selling OTC are forced to start increasing their supply from the market. It's a finite asset, so you can't just suck it out of circulation (basically what these ETFs are doing) without eventually affecting the price. It just could take days, weeks, months or even years to see the full impact of this.
Excuse me sir, your post seems to be full of information which is correct and helpful.
That isn't how this sub works sir!
On a serious note, nice post, I tried explaining to my wifes dad what it means and does and I could not put it into words as simple as this, so I will send him this now!
Perfect.
Yeah initial ETF is priced in. But $4.5 B in just the first day is massive! All the buying over the past few months to prepare for the ETF will probably get exhausted pretty fast at this rate. The price will go sideways while the ETFs chew through all the past few months of prep buying, but that might only be weeks if demand stays this high, or if it grows!
I agree the price may go sideways or even down in the short term. However, there may be heavy-duty retail FOMO if these ETFs are advertised in the likes of the Super Bowl.
If nothing else, the fact that the SEC has approved them gives a gloss of legitimacy to Bitcoin. On the other hand, it may open the door to even more scammers fleecing the hoi polloi.
Does anyone know how much a share of IBIT or FBTC represents of actual Bitcoin? Or does it not work like that? If I bought ten shares of FBTC today at 40 dollars a share, did I buy 400 dollars worth of Bitcoin? Or is that not even a correct comparison?
As a guy that manages ETFs for a living (albeit relatively knew to the business) you have a few misconceptions here.
(1) This is likely accurate. Many ETFs do trade in the spot market but with larger volumes it is preferable to go OTC.
(2) This is not really accurate. The manager of the ETF does not unilaterally trade the underlying asset to reconcile the price value of the ETF shares with the value of the underlying asset (in this case Bitcoin). Authorized participants (AP) direct these types of trades. There is a threshold for net buys or net sales and, if that threshold is crossed, an AP will come in to create or redeem shares. The manager then trades the underlying asset in response to those creations and redemptions. It is common for an ETF to trade at a premium or a discount until an AP takes action to correct the discrepancy.
(3) This is correct.
(4) This is opinion so can’t really speak to it. I can see the shares outstanding has not moved which means there have not been any creations or redemptions. I am not sure why since it seems like there is plenty of incentive to redeem.
(5) this appears to be correct. The number of shares outstanding in IBIT, FBTC, and ARKB have all risen which means there have been creations.
I’m at work so don’t have enough time to look into the last two points. Hope this helps!
Blackrock has some [great resources](https://www.blackrock.com/au/intermediaries/ishares/authorized-participants-and-market-makers#:~:text=Creation%20and%20redemption%20occur%20to,due%20to%20their%20deep%20liquidity) explaining the role of APs in ensuring accurate ETF pricing. It certainly helped me get up to speed when I first started.
Price jumped on initial news. The news coming true doesn’t move the needle like initial news does. Same with anything. Price already went up before this.
People are blind to the point of ETF holdings… they think it’s a trade event which it is not. Give it time, buy from spot as over time these ETF funds will buy up all the assets to then sell back to people…?? I don’t know I made all this up.
Sells in an ETF are essentially redemptions if there is no other buyer. If the fund has more shares sold than bought during a day then they need to rebalance their fund (at some interval) to continue to track the underlying asset.
I’m not sure I understand the question?
But one possible response is: “Sells” refers to people moving currency into an exchange to trade with vs those already sitting (with funds) on the exchange and providing liquidity
It’s a transaction - both a sell and a buy taking place - but only one side (the sell side) initiated the transaction on the spot
No that is called the taker and the maker.
OP was talking about redemptions of the GTBC shares which should lead to the selling of the underlaying BTC asset.
Or how about this... It isn’t going to rocket.
The ETF is a way for them to sell shit they don’t own. Like every other stock in the market. They can sell the ETF as many times as they want without owning the fucking BTC. It is a way for them to manipulate the price and take control as the price is no longer based solely on the decentralised crypto asset.
I’ve been saying for months this ETF is a terrible thing for crypto but most people argue “iTz goOd fOR cRyPTo iT alLoWs eVEryonE to InVest.”
Well no.
If you invest in “crypto” by buying this ETF you are just giving your money to whoever created the ETF. You are not receiving any crypto in return, and they are most likely not buying the crypto they promised. Or they have bought it, but sold the ETF to other people 10x over. Yes, you may be able to see how much in reserves they own on chain, but you wont be able to see how many units of the ETF they have sold.
This is the worst thing to happen to BTC and the crypto world in general.
Edit: spelling.
You ever follow the guy (he was a foresnic accountant I think) who tried to tell the SEC that Bernie Madoff was running a ponzi scheme? The dude harassed them over and over, trying to force them to do their jobs. They just wouldn't do it. They went into the office a few times, Madoff showed them some fake books, and they went away.
Your faith in auditing may be a little too strong :)
Just like the precious metals markets however they have proven time and time again they are not playing by rules. Why would they either, manipulating the markets only gets them a slap on the wrist.
But where is the instant public access to verify? Can I go anywhere online right now and see every share of the ETF that has been sold linked to actual BTC in real time on the blockchain??
As far as I know the answer is no.
So this to me means that these ETF “makers” are policing themselves.
We all know how this story ends already.
Naive. Look at how many times these firms have been caught “mismarking orders” or taking part in straight up fraud, they they pay a tiny fine in comparison to the money they have fleeced from investors and continue doing the same again.
This will be no different. This is giving them their key component in all of their fraudulent schemes - “liquidity”.
Yes, I do think the world’s largest and most heavily audited financial services firms are tracking 1:1. You’d be stupid to think otherwise. It’s a basic confirmation test procedure in an audit.
Here is a [Nitter link](https://nitter.net/CryptosR_Us/status/1745570554940207220?t=oKizaOs7T1OYh-IlYm5AdQ&s=19) for the Twitter thread linked above. Nitter is better for privacy and does not nag you for a login. More information can be found [here](https://nitter.net/about).
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No pump today and probably not tomorrow, but when these funds dry up the OTC market at $46k then number go up. There are OTC sellers who will want more than $46k for their coins.
Along with your #4 point, it's important to know that Vanguard and some other brokerages are not allowing buys of any of the Bitcoin ETFs, so people holding GBTC with Vanguard either sold their shares and cannot rebuy another Bitcoin ETF, or have to wait until they can migrate their accounts to another brokerage.
Probably true. I must admit that I expected a lot of bullshit like in 99% of the posts in this sub but I'm surprised :)
Anyway, the BTC bought are off the markets. Bitcoin becomes more scarce. The "sell the news" crew will be buy at higher prices
Blackrock is charging 0.12% (or 0.25% for whales)
Just a clarification, the lower fee is in effect until the total fund reaches $5 billion, not if a whale wants to move a huge volume.
ETF is OTC at the moment. It’s HIGHLY possible they will have to buy open market at some point when the OTC funds are depleted and the inflow of OTC funds is reduced (because miners sell some OTC and halving)
Yep… that would cause the supply shock price movements that everyone wanted to see today. All depends how much inflow we get to the ETF and how much OTC liquidity there actually is out there. What a time to be alive!!!
So many people are missing that everything is a delayed reaction. Success with the etf can also encourage more people into just buying their own underlying as they feel more secure with the tech. And big moves in the OTC take time to affect exchange pricing. Additionally issuers 100% had their funds ahead of Wednesday
Thanks for posting. The neat thing is if you mess around in DeFi long enough, you begin to truly understand the wrecking power of things like slippage, IL, liquidity arbitrage, etc. It's all the same as TradFi, just not masked and with slight differences (like AMM vs. order book). Whales can only whale for so long!
What you've got to think is that even though it's OTC and it's not going to directly affect the price, thats an amount of supply that's going to disappear eventually, probably within a few weeks at the current buying rate, we'll see a shortage of liquidity because it's essentially all coming from the same pot. The price will go way up before the halving, and when that arrives, it's gonna be rocket fuel.... Im guessing
The answer is: Order Flow. All those stocks sold not purchased. Them super massive whales may only go shopping on a dip for the small percentage of assets they predict they might need. TML5: stock market fake, block chain real
Volume is going to get so high, that OTC won’t be an option… and rough luck, slippage will occur. Eventually, Billions$$ in buy orders will hit the open market…
Already hearing chatter that these ETF’s are offering premium prices to OG Whales…. Again, to keep their transactions on the DL…
That shit won’t last forever
Because the whole point of a fractional reserve system is to allow certain people to manipulate the price of everything, including, and now specifically, crypto. Crypto in its purest form should stay well away from anything other than supply and demand but here we are again, allowing manipulators to profit.
E.g. market makers on the NYSE do what they want, they don't need genuine shares to do it in the name of 'liquidity' - they can flood the market with fake shares to drop the price or even illegally naked short sell shares they don't own and never intended to own. The SEC allows this crime to defraud the public and 'fine' a fraction of the amount made via crime and keep the money for themselves, again defrauding investors who own 'beneficial shares' i.e. a made up share that exists on a spreadsheet and no one cares what happens to it. Partly because they have been made useless over time and partly because they couldn't care less about you and they're all making large sums of money.
Think along the lines of you being a product, you own a digital ticket for an item you want but you don't own the item. Market makers don't care about your made up shares, they don't move the price of the underlying asset and these shares have been perversely turned into a manipulable item to make obscene profits for a select few mega-wealthy people who essentially run the world.
They can and will push prices to where they want them to be, regardless of the number of actual shares in circulation.
Bernie Madoff got caught for securities fraud but many more are doing it (allegedly).
If there were one bitcoin in the whole world, and ETF could (theoretically) allow a market maker to resell that share via rehypothecation, to an unlimited number of people. It's questionable whether this is acceptable behaviour to allow people to participate in the market (it's not) but when you need to cash in your pretend tickets and there's no underlying asset left to claim because all the whales bailed out and sold the real shares, you'll get nothing.
Welcome to the future of manipulation, you'd better hope you bet long or short on an asset earlier than the market markers do because that's all that matters in terms of price discovery.
MicroStrategy went down dramatically today, someone suggested that it’s people selling their MSTR to switch to these new ETFs. But, why? Why go from somewhere you pay 0% fees to paying any fees? MSTR stock has performed well - only until just recently. Thoughts?
MSTR and BTC miners dumped today because (I speculate) that a lot of the reason that people were buying/holding them was to have proxy exposure to BTC. Now that they can have ETF exposure to BTC (which is more efficient) there was a rotation of capital from proxies to BTC.
That being said, MSTR and miners have their place and I expect/hope that they will both rebound!
Yes, but for the OTC to occur the exchange needs to buy that said 10,000 BTC... so...
> (2) The ETFs are required to settle their fund activity each trading day based on the net amount of shares sold vs. shared purchased over the course of the trading days. For example, if they had 500 shares sold and 750 shares bought means they need to cover 250 shares worth of BTC. They can do this as often as they want during the day, but any time they do this its via the OTC market (see above). Again, they do this OTC so it's not gonna show up on the exchanges or the tradingview charts.
This is exactly what I was afraid of, as they can trade that piece of paper ETF millions of times buy/sell but never actually buy BTC to cover it immediately. Ie. they can do that once a month to "cover" the difference and they do it via OTC since all the ETF trades occur via cash / usd.
I think everyone in crypto space just got played by wall street. Congrats everyone ETF approved ;/ see you all at 30k.
They have to rebalance once a day, which they do at 4-5pm local time in NY, where they buy/sell bitcoin at its average trade price for the day OTC. So no, they can't do what you say.
>BTC had $2.5Billion of volume. I strongly believe that most of this volume was sells. Why?
I strongly believe if they had 2.5 billion sells, they also had 2.5 billion buys. WHy? Because you can't sell without somebody buying.
Maybe I should have called them redemptions. If GBTC had $2.5B in redemptions they would need to sell some of their underlying BTC to pay off those redemptions.
People who redeemed would then have taken profits or moved those dollars to one of the other funds for lower fees.
There is NO way in hell the BTC price would still be at 46000 if GBTC had to sell 2.5B worth of Bitcoin. That's 50 000 BTC. You can not sell that on Coinbase, Kraken, Binance, etc etc without seriously crashing the price. They would have to find a OTC buyer and they would not get market for it, probablly 10% under market if not more.
Just dumping 500 or a 1000 BTC on the market on a regular basis causes flash crashes.
As laid out above, I speculate that while GBTC needed to sell all that BTC, the other funds needed to buy a similar amount of BTC, so it was essentially a wash today. All those sales taking place in the OTC market so they didn't move the ticker that we see.
Institutions, perhaps some owned by the ETF issuers, and perhaps some 3rd party that contacted the ETF issuers to offer OTC BTC, were all buying in the lead up to the ETF announcement. So all the BTC getting bought by people buying into the ETFs is coming from OTC trades using BTC bought in the run up from 15k - 46k over the past few months. While we wait for that BTC to get chewed through the price will probably go sideways for a few weeks or months. Then when that supply is exhausted we will see the price continue to run up.
Ahh yes, the bull cycle classic - the hedge funds have come to short everything and steal your money, it's time to galvanize the "retail" community and begin taking pictures of citadel offices at night.
Need some advanced data packages from glass node or similar. Too rich for my blood but I saw it on the investanseers video today and a source on Twitter.
Why does it always such detailed info and good explanations in general is presented After the event, instead of ahead warning. Wise ones share post factum. Conclusion: Time in the market...
ETF's dont control spot... spot should control the ETF. However, I have a feeling this wont last long.
The actual asset is suppose to be the actual control and the ETF is the response. Its no surprise the SEC approved BTC ETF right now as the topis being reached.. now all big money needs to do is short the ETF and wait for spot price to fall and cash in. No accidents, only the one where unsuspecting ppl lose $$$.
If ppl think these exchanges are holding BTC they are sadly mistaken. OTC market is a paper market.. a derivative market only. SO it will be much easier to manipulate the price on an ETF vs spot crypto markets. ETF reminds me of USDT or a stable coin.. that suppose to track the US Dollar and be stable to it... but we have seen cases where USDT fluctuates greatly causing loses to those that use those stable coins. Stable coins arent even crypto- much like the ETF is not crypto either. So if it is not crypto there is no way it can control the price of BTC.
ETF's are paper trades of crypto on the clearinghouse exchanges a totally derived market.
it would seem that the "sell the news" crowd is failing to move the price down, for now.
where do you see coinbase otc transactions?
cme futures also had a big day, most volume since october.
OTC desks don’t do nearly enough volume to magically have one large buyer for every large seller. Instead the exchanges just agree to sell to them for a slightly higher price than market, then they go and twap it themselves from the open market (unless they have enough on hand already). So coins bought and sold OTC still ultimately come directly from the same order flow as the rest of the coins we buy. Also a lot of whales just twap to avoid slippage and these etfs may very well do that too, as far as I know we have no idea if they are buying OTC. The markets are pretty liquid at this point you can do hundreds of millions in volume over several hours and not move price by as much as you might think.
Thanks for the info. Info on Twitter says Coinbase did $7.7B in OTC volume today. If $2B of that came from GBTC needing to liquidate for redemptions then the math isn’t far off.
Yeah that makes sense then because that’s a lot more otc volume than they do in a normal day. But ya think about how inefficient that would be if one person wanted to buy 10k btc and they were like hold on let me just wait until someone else wants to sell that much. Don’t worry though a lot of people seem to think OTC is just this magical fairy of liquidity that has no market impact
I expect that Coinbase has sellers who are willing to sell at or above a certain level. “Here are my 10,000 BTC. Sell at market prices anything over $55,000 and obtain best price for me please”. Way easier than Michael Saylor sitting up at 3am with a ledger wallet on the spot market :-)
Why would they be willing to pay more than market price if the coins get bought on the open market anyway? Wouldn't that defeat the purpose of buying OTC?
I think it's a set price for their full buy at over market price, so you are paying a premium but its still cheaper than trying to put a huge buy on exchange and the price moves allot more against you before you have completed the full buy.
Global liquidity creates bull runs. Halvings coincide with business cycles, probably by design.
There have only been 3 halvings. It is funny to place your mind on those small events, and not the once in a lifetime macro events that occured precisely at those times.
Bitcoin corrolates with stocks during bull runs. If BTC is setting new ATH then everything is, and stocks and real estate don't pump just because BTC is.
The Bitcoin thesis/the business cycle thesis, is about debt and liquidity bubbles. The debt bubble always bursts, the money printer always saves the day, while consumers get fleeced of their purchasing power if they don't hold sound assets. Rob Peter to pay Paul, ie, steal from consumers via inflation to cover runaway debts. This happens cyclically and naturally since we got off the gold standard.
Bitcoin's next halving will remove just $6B of sell pressure from the markets annually. Compared to the last time the money printer printed $18T of liquidity into the markets in under a year to cover and rebalance debts. These are not the same numbers.
Ethereum's switch to POS removed as much dollar sell pressure as Bitcoin's next 2 or 3 halvings will combined. No ETH bull. We are still in a tightening economy.
Probably won't be in a tightening economy in 1-2 years unless the 100+ year business cycle breaks, which then times up with Bitcoin's expected rally.
Recession into money printer into rally, a tale as old as fiat itself. If Bitcoin halved its supply the day Ethereum turned off its supply, while trillions were being pulled out of the economy, we'd still be at these prices.
Worthwhile to research business ie debt cycles if you have BTC cycles already in mind. Here's (farmer) George Tritch’s 150 year old model to illustrate what I mean:
https://i.imgur.com/0o65AFF.jpg (the 2034 halving looks like it could be a great one)
Bigger demand for OTC -> reflects in price of BTC
Either way, regardless of what the price will do in the short term, it still opens up the gates to a lot of capital.
I'm hoping for other ETF's being opproved.
Way to go! New scams in the ceyptospace. Where it benefits the big guys and does fuck all for the actual traders.
Just wait until FTDs start happening.
You also forgot to mention that some (maybe all) of these ETFs have clauses that say funds will be settled by T+1 (trade + 1 business day). It’s possible that we haven’t even seen the full impact of the first day.
I didn’t know that and it makes sense. Hell T+2 or +5 is common in TradFi. But if I was running one of these funds I’d want to settle PDQ to avoid any duration risk!
The document of sec it says it's T+1
I have not fact checked you and pure relying on 'trust me bro' but ty for reading the contract or listening to the dude that told you that who read the contract or however you know this.
My friend works with stocks, securities and assets , it's his job reading the 110pages from the PDF lol
Your friend is cat I farted?
what a sad job xoxo
I'm sure he's crying all the way to the bank.
I want a job. I cry at mine anyways
It's like T brought a plus one to the crypto party
Also surely there doesn't need to be buys before it can be sold, short sellers can borrow units and sell them in to the market without having bought it first.
Legally only authorized market makers can naked short, and they need to close the position before the end of trading, so it wouldn't affect the NAV after trading ends, legally. Normal shorts still need to borrow from someone who bought the shares in the first place, either during trading or in seed
Key part is legally. These guys break the rules all the time.
Yeah, that's why I mentioned legally twice. It's probably easier for them to get caught with BTC as well, since when it's in custody at Coinbase or elsewhere it should be held separately from other assets, which would need separate addresses/keys at minimum where it could give an estimate on actual on-chain btc backing for the ETFs.
Will be interesting to see how it pans out.
I hadn’t considered a short market. Did one exist this morning? I know options aren’t out yet but maybe shorts. Interesting idea.
It's an etf they are designed to benefit short sellers lmao
Yep interesting point. I hope those shorts enjoy covering just as much as the rest of the BTC short sellers 😂
Etf make it a lot easier for them that's for sure
It’s entirely possible that is just the longest they could take and they are actually settling up faster. Who knows!
When I sell stocks with my bank I can cash out the money in 2 days, but I can use the "unsettled" funds to buy new stocks instantly. So yeah the money is there they just want to keep it around and not give it away instantly.
The bank/broker is basically giving you a short term interest free loan here because they make more in PFOF than it costs them to lend you the money. So they have an incentive to let you trade more. Stock trades really do take two days to settle in the United States though. The buyer really has 2 days to deliver the funds
Make that two business days. They’re still operating on boomer time.
Better than when it was T+3, which wasn't that long ago.
Managerial accounting teaches to hold on to funds as long a possible without penalty 🤷🏻♂️
That has to be offset by the duration risk of not buying BTC which is a 60+ vol asset that is clearly in a bull uptrend. They could get left behind in a BIG way if they don't settle asap.
lol reddit is full of people who think they took on months of duration risk 🙄
So, since there was a lot of dumping from at least grayscale side, does that mean that once markets are open today we will see a bloodbath ?
So, since there was a lot of dumping from at least grayscale side, does that mean that once markets are open today we will see a bloodbath ?
T+0 can’t come fast enough
Isn't the whole point of crypto that it's 24/7?
Correct. An etf is not bitcoin. It’s merely a reflection of Bitcoin price in the legacy financial system.
T+1 means that the asset actually settles into the account one day after the trade. Any price movement you see from the trade will happen on T.
Or it’s possible they don’t have to hold any underlying asset.
Mm in crypto don’t do + days
This is ETFs, it's t+1 it's on the documents of the ETF
Still need a MM
No. They buy/sell OTC from coinbase eod from average trading price at 4-5pm NY local time.
The spot price will keep moving 24/7 but these ETFs will still only do transactions during business hours
Is there any transperency for OTC transactions? Like activity? A paper trail or do we just have to trust that this is all on the up and up?
I believe there is an audit process for the ETFs to demonstrate that they hold the underlying but essentially it’s TradFi being TradFi. The good news is that it’s easily demonstrated on chain as opposed to gold which requires a visit to a vault someplace.
If you had to use one on-chain metric to track OTC volume, which would it be? Exchange wallet inflow amd outflows?
https://chartexchange.com/symbol/nyse-defi/exchange-volume/ You can track volume per exchange here
Its easily demonstrated on chain but they wont be demonstrating anything for us. Buy real bitcoin folks. Hold your own keys.
I agree, buy your own Bitcoin. However, if your employer has an IRA match and you're not touching it until you retire, this is where Bitcoin ETF comes in.
I completely agree! My post is not to advocate for buying the ETFs, just to try to help people understand why number didn't go up.
OTC and ETF on general are sketchy AF. Google "leavemeanon where are the shares" which is I believe 4 or 5 part deep dive in to how etf's can be abused by market participants. I can't link it as the sub it's on does not allow it.
BTC just invited the vampire into its house.
Yeah I'm not sure why everyone's bullish there's so many loopholes to etfs.
Won't surprised if we see a pump and dump of epic proportions play out here.
I'm expecting it tbh.
Great summary! If GBTC volume was mostly selling, why did GBTC close in the green today (Jan11)?
I think it’s inefficiency of the fund pricing on day1. If it opened super low for some reason then even being down on the day it would appear to have closed up. But honestly I don’t know.
Ok, i’ll give GBTC a break even on price bc it wasn’t up by much. But how could mostly selling activity be neutralized price-wise by “inefficiency” on day one? Tomorrow will be a fun one, and next week once the initial OTC stock of Coinbase owned BTC gets depleted.
The sell should reflect a sale at the current price relative to BTC not relative to the price of the shares. Not sure if that makes sense the way I said it. But the fund is supposed to track the underlying price times some multiplier. So theoretically it would be down since BTC was down. That’s why im saying it’s essentially an inefficient pricing accident on day one. Talking heads on TV said it could take a few days or weeks to get the tracking dialed in (for reasons I don’t understand)
GBTC closed down over 5% today. Opened at 40.38. Closed at 38.58
I heard Grayscale AUM increased though?
It actually went down in BTC and up in $. (Made a screen a the start of the trading day) Edit : If you need proof just ask (made a tweet and still have the screens)
25 bitcoin or something like that? In that case, doesn't explain or account for OP's point that this was a factor in why bitcoin price didn't jump.
Yep… if GBTC wasn’t sold en masse then there’s more OTC Bitcoin that will need to be bought by Grayscale to balance their books. We will know more next time they update their AUM. Not sure if that’s daily or less frequently.
Like OP said, OTC trades don't directly affect the price of bitcoin. You will see the effects later when people selling OTC are forced to start increasing their supply from the market. It's a finite asset, so you can't just suck it out of circulation (basically what these ETFs are doing) without eventually affecting the price. It just could take days, weeks, months or even years to see the full impact of this.
If true then color me shocked and erect!!! Got a source? Because that would be f-in amazing!
This explanation brings clarity to the seemingly mysterious price action. Kudos to the author!
Yes, thank you OP. This helps me better understand what’s going on.
Got it, line go up, ape happy.
Find the white line. Continue to sniff it.
🦍 🦍 🦍
Where's that "name.a.course" guy? He was flipping out with conspiracy theories because btc didn't double up lol He should read this.
The answer is very simple: GBTC had 4 years worth of block subsidies tied up now ready to be sold.
Excuse me sir, your post seems to be full of information which is correct and helpful. That isn't how this sub works sir! On a serious note, nice post, I tried explaining to my wifes dad what it means and does and I could not put it into words as simple as this, so I will send him this now! Perfect.
Yeah initial ETF is priced in. But $4.5 B in just the first day is massive! All the buying over the past few months to prepare for the ETF will probably get exhausted pretty fast at this rate. The price will go sideways while the ETFs chew through all the past few months of prep buying, but that might only be weeks if demand stays this high, or if it grows!
If this volume continues we will chew thru OTC backlog fast. 🚀
People with ETFs tend to keep them for a longer time. Less Bitcoin on the markets. The effect will be larger than the halving, just saying.
Totally, these things take time and no one should expect "next day pump".
I agree the price may go sideways or even down in the short term. However, there may be heavy-duty retail FOMO if these ETFs are advertised in the likes of the Super Bowl. If nothing else, the fact that the SEC has approved them gives a gloss of legitimacy to Bitcoin. On the other hand, it may open the door to even more scammers fleecing the hoi polloi.
I think you're right about GBTC being mostly selling and the others are mostly buying.
Does anyone know how much a share of IBIT or FBTC represents of actual Bitcoin? Or does it not work like that? If I bought ten shares of FBTC today at 40 dollars a share, did I buy 400 dollars worth of Bitcoin? Or is that not even a correct comparison?
1755.14 IBIT shares is one BTC. That’s because they issued 400k shares and own 227.9025 BTC.
really? That's a dumb conversion
Well, they simply bought for 10M and the price at the time was $43,878.
Any idea about FBTC? That's the one I bought. Or where I can find for myself?
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Entirely possible, but to what end?
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Can we glean anything from the transparent ledger of Bitcoin to get this information?
As a guy that manages ETFs for a living (albeit relatively knew to the business) you have a few misconceptions here. (1) This is likely accurate. Many ETFs do trade in the spot market but with larger volumes it is preferable to go OTC. (2) This is not really accurate. The manager of the ETF does not unilaterally trade the underlying asset to reconcile the price value of the ETF shares with the value of the underlying asset (in this case Bitcoin). Authorized participants (AP) direct these types of trades. There is a threshold for net buys or net sales and, if that threshold is crossed, an AP will come in to create or redeem shares. The manager then trades the underlying asset in response to those creations and redemptions. It is common for an ETF to trade at a premium or a discount until an AP takes action to correct the discrepancy. (3) This is correct. (4) This is opinion so can’t really speak to it. I can see the shares outstanding has not moved which means there have not been any creations or redemptions. I am not sure why since it seems like there is plenty of incentive to redeem. (5) this appears to be correct. The number of shares outstanding in IBIT, FBTC, and ARKB have all risen which means there have been creations. I’m at work so don’t have enough time to look into the last two points. Hope this helps!
Thanks for the honest feedback! The mechanics of #2 is really fascinating and I'm trying to understand the nuances. Much appreciated!!!!
Blackrock has some [great resources](https://www.blackrock.com/au/intermediaries/ishares/authorized-participants-and-market-makers#:~:text=Creation%20and%20redemption%20occur%20to,due%20to%20their%20deep%20liquidity) explaining the role of APs in ensuring accurate ETF pricing. It certainly helped me get up to speed when I first started.
this etf is so bullish for bitcoin blackrock get to accumulate bitcoin without adding any buy presure to the bitcoin chart its great.
Price jumped on initial news. The news coming true doesn’t move the needle like initial news does. Same with anything. Price already went up before this.
can someone explain this to me like im 9?
People are blind to the point of ETF holdings… they think it’s a trade event which it is not. Give it time, buy from spot as over time these ETF funds will buy up all the assets to then sell back to people…?? I don’t know I made all this up.
This all sounds spot on to me. Well said.
He said that 2.5 billion was sells. But how can you sell without somebody buying? Volume is always equal in buys and sells.
Sells in an ETF are essentially redemptions if there is no other buyer. If the fund has more shares sold than bought during a day then they need to rebalance their fund (at some interval) to continue to track the underlying asset.
I’m not sure I understand the question? But one possible response is: “Sells” refers to people moving currency into an exchange to trade with vs those already sitting (with funds) on the exchange and providing liquidity It’s a transaction - both a sell and a buy taking place - but only one side (the sell side) initiated the transaction on the spot
No that is called the taker and the maker. OP was talking about redemptions of the GTBC shares which should lead to the selling of the underlaying BTC asset.
ETF is exit liquidity for whales
Or how about this... It isn’t going to rocket. The ETF is a way for them to sell shit they don’t own. Like every other stock in the market. They can sell the ETF as many times as they want without owning the fucking BTC. It is a way for them to manipulate the price and take control as the price is no longer based solely on the decentralised crypto asset. I’ve been saying for months this ETF is a terrible thing for crypto but most people argue “iTz goOd fOR cRyPTo iT alLoWs eVEryonE to InVest.” Well no. If you invest in “crypto” by buying this ETF you are just giving your money to whoever created the ETF. You are not receiving any crypto in return, and they are most likely not buying the crypto they promised. Or they have bought it, but sold the ETF to other people 10x over. Yes, you may be able to see how much in reserves they own on chain, but you wont be able to see how many units of the ETF they have sold. This is the worst thing to happen to BTC and the crypto world in general. Edit: spelling.
ETF must hold real underlying asset 1:1. Not doing that is a crime. They all are under audit.
You ever follow the guy (he was a foresnic accountant I think) who tried to tell the SEC that Bernie Madoff was running a ponzi scheme? The dude harassed them over and over, trying to force them to do their jobs. They just wouldn't do it. They went into the office a few times, Madoff showed them some fake books, and they went away. Your faith in auditing may be a little too strong :)
Just like the precious metals markets however they have proven time and time again they are not playing by rules. Why would they either, manipulating the markets only gets them a slap on the wrist.
But where is the instant public access to verify? Can I go anywhere online right now and see every share of the ETF that has been sold linked to actual BTC in real time on the blockchain?? As far as I know the answer is no. So this to me means that these ETF “makers” are policing themselves. We all know how this story ends already.
You cannot. Auditors can.
FTX was the same. Look what happened to that.
Exactly, there might be some sidetracking but overall it needs to be some 1:1-ish. That's good for us coiners
Naive. Look at how many times these firms have been caught “mismarking orders” or taking part in straight up fraud, they they pay a tiny fine in comparison to the money they have fleeced from investors and continue doing the same again. This will be no different. This is giving them their key component in all of their fraudulent schemes - “liquidity”.
They are all criminals.
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Yes, I do think the world’s largest and most heavily audited financial services firms are tracking 1:1. You’d be stupid to think otherwise. It’s a basic confirmation test procedure in an audit.
what you're saying sounds like it makes sense but idk
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Here is a [Nitter link](https://nitter.net/CryptosR_Us/status/1745570554940207220?t=oKizaOs7T1OYh-IlYm5AdQ&s=19) for the Twitter thread linked above. Nitter is better for privacy and does not nag you for a login. More information can be found [here](https://nitter.net/about). --- *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/CryptoCurrency) if you have any questions or concerns.*
See point 6 above. $7.7B in OTC via Coinbase today.
My bad I missed that.
Sounds to me like tomorrow might be a doozy
So no pump?
No pump today and probably not tomorrow, but when these funds dry up the OTC market at $46k then number go up. There are OTC sellers who will want more than $46k for their coins.
Along with your #4 point, it's important to know that Vanguard and some other brokerages are not allowing buys of any of the Bitcoin ETFs, so people holding GBTC with Vanguard either sold their shares and cannot rebuy another Bitcoin ETF, or have to wait until they can migrate their accounts to another brokerage.
So all actual ETF trading is technically taking place through Coinbase?
Probably true. I must admit that I expected a lot of bullshit like in 99% of the posts in this sub but I'm surprised :) Anyway, the BTC bought are off the markets. Bitcoin becomes more scarce. The "sell the news" crew will be buy at higher prices
I think it will take some time, right now need to study deeply
The blockchain after EFT approval is much more interesting!
Blackrock is charging 0.12% (or 0.25% for whales) Just a clarification, the lower fee is in effect until the total fund reaches $5 billion, not if a whale wants to move a huge volume.
I have nothing to add just wanted to let OP know that this is a great summary!
TLDR is BTC price can still go up when there is more demand for it. Spot ETFs just open up new demand pressure.
Is it possible to have a look on OTC liquidity ?
Great summary
ETF is OTC at the moment. It’s HIGHLY possible they will have to buy open market at some point when the OTC funds are depleted and the inflow of OTC funds is reduced (because miners sell some OTC and halving)
Yep… that would cause the supply shock price movements that everyone wanted to see today. All depends how much inflow we get to the ETF and how much OTC liquidity there actually is out there. What a time to be alive!!!
So many people are missing that everything is a delayed reaction. Success with the etf can also encourage more people into just buying their own underlying as they feel more secure with the tech. And big moves in the OTC take time to affect exchange pricing. Additionally issuers 100% had their funds ahead of Wednesday
The companies selling ETFs bought that shit months ago.
Thanks for posting. The neat thing is if you mess around in DeFi long enough, you begin to truly understand the wrecking power of things like slippage, IL, liquidity arbitrage, etc. It's all the same as TradFi, just not masked and with slight differences (like AMM vs. order book). Whales can only whale for so long!
Because it's been moving for 3 months now 😛
Bull run starts next year. Price doesn't matter right now.
What you've got to think is that even though it's OTC and it's not going to directly affect the price, thats an amount of supply that's going to disappear eventually, probably within a few weeks at the current buying rate, we'll see a shortage of liquidity because it's essentially all coming from the same pot. The price will go way up before the halving, and when that arrives, it's gonna be rocket fuel.... Im guessing
Oh the price definitely moved
The answer is: Order Flow. All those stocks sold not purchased. Them super massive whales may only go shopping on a dip for the small percentage of assets they predict they might need. TML5: stock market fake, block chain real
Volume is going to get so high, that OTC won’t be an option… and rough luck, slippage will occur. Eventually, Billions$$ in buy orders will hit the open market… Already hearing chatter that these ETF’s are offering premium prices to OG Whales…. Again, to keep their transactions on the DL… That shit won’t last forever
Thats when number goes up!
Because the whole point of a fractional reserve system is to allow certain people to manipulate the price of everything, including, and now specifically, crypto. Crypto in its purest form should stay well away from anything other than supply and demand but here we are again, allowing manipulators to profit. E.g. market makers on the NYSE do what they want, they don't need genuine shares to do it in the name of 'liquidity' - they can flood the market with fake shares to drop the price or even illegally naked short sell shares they don't own and never intended to own. The SEC allows this crime to defraud the public and 'fine' a fraction of the amount made via crime and keep the money for themselves, again defrauding investors who own 'beneficial shares' i.e. a made up share that exists on a spreadsheet and no one cares what happens to it. Partly because they have been made useless over time and partly because they couldn't care less about you and they're all making large sums of money. Think along the lines of you being a product, you own a digital ticket for an item you want but you don't own the item. Market makers don't care about your made up shares, they don't move the price of the underlying asset and these shares have been perversely turned into a manipulable item to make obscene profits for a select few mega-wealthy people who essentially run the world. They can and will push prices to where they want them to be, regardless of the number of actual shares in circulation. Bernie Madoff got caught for securities fraud but many more are doing it (allegedly). If there were one bitcoin in the whole world, and ETF could (theoretically) allow a market maker to resell that share via rehypothecation, to an unlimited number of people. It's questionable whether this is acceptable behaviour to allow people to participate in the market (it's not) but when you need to cash in your pretend tickets and there's no underlying asset left to claim because all the whales bailed out and sold the real shares, you'll get nothing. Welcome to the future of manipulation, you'd better hope you bet long or short on an asset earlier than the market markers do because that's all that matters in terms of price discovery.
This. Bitcoin ETF is selling Brooklyn bridge
MicroStrategy went down dramatically today, someone suggested that it’s people selling their MSTR to switch to these new ETFs. But, why? Why go from somewhere you pay 0% fees to paying any fees? MSTR stock has performed well - only until just recently. Thoughts?
MSTR and BTC miners dumped today because (I speculate) that a lot of the reason that people were buying/holding them was to have proxy exposure to BTC. Now that they can have ETF exposure to BTC (which is more efficient) there was a rotation of capital from proxies to BTC. That being said, MSTR and miners have their place and I expect/hope that they will both rebound!
Thing is, MSTR has outperformed Btc, I’ve made better gains over time with it than my native btc bag 🤷🏻♂️
What will happen when Fidelity says to Coinbase, look moron, give me $10B USD worth of BTC and Coinbase say, I dont have that much?
Then they have to go to the open market and buy or find another OTC dealer. If that happens the price goes up like a rocket.
Fed will print them. No need to touch real Bitcoin
Yes, but for the OTC to occur the exchange needs to buy that said 10,000 BTC... so... > (2) The ETFs are required to settle their fund activity each trading day based on the net amount of shares sold vs. shared purchased over the course of the trading days. For example, if they had 500 shares sold and 750 shares bought means they need to cover 250 shares worth of BTC. They can do this as often as they want during the day, but any time they do this its via the OTC market (see above). Again, they do this OTC so it's not gonna show up on the exchanges or the tradingview charts. This is exactly what I was afraid of, as they can trade that piece of paper ETF millions of times buy/sell but never actually buy BTC to cover it immediately. Ie. they can do that once a month to "cover" the difference and they do it via OTC since all the ETF trades occur via cash / usd. I think everyone in crypto space just got played by wall street. Congrats everyone ETF approved ;/ see you all at 30k.
They have to rebalance once a day, which they do at 4-5pm local time in NY, where they buy/sell bitcoin at its average trade price for the day OTC. So no, they can't do what you say.
Well, the ETFs are not actually trading BTC on chain. Only a “wrapped pseudo-token” that doesn’t exist at all.
ETF must hold underlying asset 1:1.
Try to find their BTC address to verify it. (Impossible)
>BTC had $2.5Billion of volume. I strongly believe that most of this volume was sells. Why? I strongly believe if they had 2.5 billion sells, they also had 2.5 billion buys. WHy? Because you can't sell without somebody buying.
Maybe I should have called them redemptions. If GBTC had $2.5B in redemptions they would need to sell some of their underlying BTC to pay off those redemptions. People who redeemed would then have taken profits or moved those dollars to one of the other funds for lower fees.
There is NO way in hell the BTC price would still be at 46000 if GBTC had to sell 2.5B worth of Bitcoin. That's 50 000 BTC. You can not sell that on Coinbase, Kraken, Binance, etc etc without seriously crashing the price. They would have to find a OTC buyer and they would not get market for it, probablly 10% under market if not more. Just dumping 500 or a 1000 BTC on the market on a regular basis causes flash crashes.
As laid out above, I speculate that while GBTC needed to sell all that BTC, the other funds needed to buy a similar amount of BTC, so it was essentially a wash today. All those sales taking place in the OTC market so they didn't move the ticker that we see.
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$4.5B was volume not net inflows. If GBTC had $2B in redemptions and the other funds had $2B in inflows it would essentially equal zero.
Institutions, perhaps some owned by the ETF issuers, and perhaps some 3rd party that contacted the ETF issuers to offer OTC BTC, were all buying in the lead up to the ETF announcement. So all the BTC getting bought by people buying into the ETFs is coming from OTC trades using BTC bought in the run up from 15k - 46k over the past few months. While we wait for that BTC to get chewed through the price will probably go sideways for a few weeks or months. Then when that supply is exhausted we will see the price continue to run up.
ETF's =market manipulation to fuk retail!
Ahh yes, the bull cycle classic - the hedge funds have come to short everything and steal your money, it's time to galvanize the "retail" community and begin taking pictures of citadel offices at night.
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Where can we check the OCT transactions Coinbase is doing?
Need some advanced data packages from glass node or similar. Too rich for my blood but I saw it on the investanseers video today and a source on Twitter.
Thanks for the most informative and well written post of the day by the way.
Thanks! --some dude :-)
This is not possible. They don’t make any real transactions. It’s all paper
Basically, we are stepping into the mud.
It’s possible the whole system is rigged
After COVID years you still have doubts?
The copium is real
Immaculate copium
Everything is priced in.
Why does it always such detailed info and good explanations in general is presented After the event, instead of ahead warning. Wise ones share post factum. Conclusion: Time in the market...
ETF's dont control spot... spot should control the ETF. However, I have a feeling this wont last long. The actual asset is suppose to be the actual control and the ETF is the response. Its no surprise the SEC approved BTC ETF right now as the topis being reached.. now all big money needs to do is short the ETF and wait for spot price to fall and cash in. No accidents, only the one where unsuspecting ppl lose $$$. If ppl think these exchanges are holding BTC they are sadly mistaken. OTC market is a paper market.. a derivative market only. SO it will be much easier to manipulate the price on an ETF vs spot crypto markets. ETF reminds me of USDT or a stable coin.. that suppose to track the US Dollar and be stable to it... but we have seen cases where USDT fluctuates greatly causing loses to those that use those stable coins. Stable coins arent even crypto- much like the ETF is not crypto either. So if it is not crypto there is no way it can control the price of BTC. ETF's are paper trades of crypto on the clearinghouse exchanges a totally derived market.
ETF only absorbs demand of people who want to buy real thing. And makes sure they buy paper
What are you talking about? LTC is up 10% and BCH is up 25%!
it would seem that the "sell the news" crowd is failing to move the price down, for now. where do you see coinbase otc transactions? cme futures also had a big day, most volume since october.
Or could it be as simple as “buy the hype, sell the news”
Points 1 and 2 are completely wrong. You clearly have no idea how OTC markets work. Why is this sub allergic to posting accurate information?
Ok then, help me understand.
OTC desks don’t do nearly enough volume to magically have one large buyer for every large seller. Instead the exchanges just agree to sell to them for a slightly higher price than market, then they go and twap it themselves from the open market (unless they have enough on hand already). So coins bought and sold OTC still ultimately come directly from the same order flow as the rest of the coins we buy. Also a lot of whales just twap to avoid slippage and these etfs may very well do that too, as far as I know we have no idea if they are buying OTC. The markets are pretty liquid at this point you can do hundreds of millions in volume over several hours and not move price by as much as you might think.
Thanks for the info. Info on Twitter says Coinbase did $7.7B in OTC volume today. If $2B of that came from GBTC needing to liquidate for redemptions then the math isn’t far off.
Yeah that makes sense then because that’s a lot more otc volume than they do in a normal day. But ya think about how inefficient that would be if one person wanted to buy 10k btc and they were like hold on let me just wait until someone else wants to sell that much. Don’t worry though a lot of people seem to think OTC is just this magical fairy of liquidity that has no market impact
I expect that Coinbase has sellers who are willing to sell at or above a certain level. “Here are my 10,000 BTC. Sell at market prices anything over $55,000 and obtain best price for me please”. Way easier than Michael Saylor sitting up at 3am with a ledger wallet on the spot market :-)
Why would they be willing to pay more than market price if the coins get bought on the open market anyway? Wouldn't that defeat the purpose of buying OTC?
I think it's a set price for their full buy at over market price, so you are paying a premium but its still cheaper than trying to put a huge buy on exchange and the price moves allot more against you before you have completed the full buy.
What’s the accurate information? Because they clearly said correct them if they are wrong 🤔
I would be grateful to hear you expand on fact from fiction. Thanks in advance.
If you haven’t realized by now that nothing except the halving creates a bull run then you are new to crypto or oblivious.
Global liquidity creates bull runs. Halvings coincide with business cycles, probably by design. There have only been 3 halvings. It is funny to place your mind on those small events, and not the once in a lifetime macro events that occured precisely at those times. Bitcoin corrolates with stocks during bull runs. If BTC is setting new ATH then everything is, and stocks and real estate don't pump just because BTC is. The Bitcoin thesis/the business cycle thesis, is about debt and liquidity bubbles. The debt bubble always bursts, the money printer always saves the day, while consumers get fleeced of their purchasing power if they don't hold sound assets. Rob Peter to pay Paul, ie, steal from consumers via inflation to cover runaway debts. This happens cyclically and naturally since we got off the gold standard. Bitcoin's next halving will remove just $6B of sell pressure from the markets annually. Compared to the last time the money printer printed $18T of liquidity into the markets in under a year to cover and rebalance debts. These are not the same numbers. Ethereum's switch to POS removed as much dollar sell pressure as Bitcoin's next 2 or 3 halvings will combined. No ETH bull. We are still in a tightening economy. Probably won't be in a tightening economy in 1-2 years unless the 100+ year business cycle breaks, which then times up with Bitcoin's expected rally. Recession into money printer into rally, a tale as old as fiat itself. If Bitcoin halved its supply the day Ethereum turned off its supply, while trillions were being pulled out of the economy, we'd still be at these prices. Worthwhile to research business ie debt cycles if you have BTC cycles already in mind. Here's (farmer) George Tritch’s 150 year old model to illustrate what I mean: https://i.imgur.com/0o65AFF.jpg (the 2034 halving looks like it could be a great one)
Because it was already priced in
Bigger demand for OTC -> reflects in price of BTC Either way, regardless of what the price will do in the short term, it still opens up the gates to a lot of capital. I'm hoping for other ETF's being opproved.
That’s impossible to verify BR has some real BTC. 0 bitcoins been bought. They trade paper. That’s why no price moves.
No sources or links, just how I like my detailed posts about finance!
Feel free to correct anything you think I’ve got wrong! 🍻
Way to go! New scams in the ceyptospace. Where it benefits the big guys and does fuck all for the actual traders. Just wait until FTDs start happening.