Bitcoin News Today: Kiyosaki Slams ETFs as Insecure Paper Alternatives to Bitcoin, Gold, Silver

Investor and author Robert Kiyosaki has criticized exchange-traded funds (ETFs) as "paper versions" of Bitcoin, gold, and silver, arguing that such financial instruments fail to provide the same security and tangible value as physical assets. In a recent commentary, Kiyosaki warned that ETFs—while convenient for everyday investors—offer no substitute for direct ownership of commodities or cryptocurrencies. He likened holding ETFs to owning a "picture of a gun" for self-defense: useful in stable times but ineffective during a crisis when physical assets are needed [1].

Kiyosaki, best known for his "Rich Dad Poor Dad" book series, has long advocated for ditching fiat currency in favor of "bearer assets" like Bitcoin and precious metals to hedge against inflation and the declining value of the U.S. dollar. He emphasized that ETFs, which represent claims on underlying assets rather than direct ownership, carry risks if the issuing institution cannot maintain sufficient reserves. A loss of confidence in an ETF or its custodian, he argued, could trigger liquidity crises, potentially leading to the collapse of the fund or its assets [1].

The debate highlights growing tensions between proponents of decentralized finance and traditional investment models. ETFs have gained significant traction, particularly with the introduction of U.S. spot Bitcoin ETFs this year, which now trade billions of dollars in shares weekly. Critics like Kiyosaki, however, argue that investors are "buying a claim, not the asset itself," which leaves them vulnerable in scenarios where physical possession becomes critical [1].

Bloomberg analyst Eric Balchunas has pushed back against these concerns, stating that ETFs are legally structured to ensure shares are tied to actual assets. He noted, "All the shares of the ETF are connected to actual Bitcoin; it’s a one-for-one ratio, there is no paper," emphasizing the 30-year track record of ETFs operating without systemic failures [1]. Balchunas acknowledged the crypto community's skepticism of traditional finance but pointed out that regulated ETFs offer advantages such as institutional-grade security, which can protect wealthy investors from theft risks associated with self-custody. He also highlighted the logistical and financial burdens of storing physical gold and silver, which many retail investors cannot manage effectively [1].

The exchange underscores a broader ideological divide: Kiyosaki’s camp prioritizes direct ownership and decentralization, while supporters of ETFs highlight their accessibility, regulatory safeguards, and practicality for mass adoption. As spot Bitcoin ETFs continue to attract billions in inflows, the debate over their role in modern portfolios is likely to intensify.

Source: [1] [title] [https://cryptoslate.com/robert-kiyosaki-slams-etfs-for-being-paper-versions-of-bitcoin-gold-and-silver/]