Investing in bitcoins by buying bitcoins means choosing an exchange, funding an account, holding the bitcoins, worrying about the security of the bitcoins being held by whatever exchange you've chosen or the security of whatever computer you're holding them on...

Investing in a bitcoin ETF means clicking a buy button in your online brokerage account. You invest with minimal effort and minimal risk aside from your investment losing value. Someone else -- a regulatory system and set of agents acting on your behalf -- takes on all the responsibility for enacting and securing your investment.

As someone outside, I have the impression that buying bitcoins is a bit of a pain, plus once I have them I have to keep track of them.

Buying into the market through my already existing brokerage account is much more user friendly especially for non tech people. Bitcoin value is highly speculative at this point, and that means a lot of people will be wanting to get a piece of the action without really understanding how it works. Asking why they don't just buy some directly is kind of like asking why you'd buy a gold ETF instead of buying gold.

Because that would allow larger, regulated funds (like pensions and university endowments) to invest in them, as they're generally restricted to securities listed on credible exchanges.

Good news for bitcoin owners, as that means more potential buyers and thus a higher price.

I am a bit worried though, about workers who may lose out because a manager got too caught up in the hype.

Small retail investors that see Bitcoin in WSJ, FT, etc. sit around and say "Hey! I want some of that," and their neighborhood financial planners don't know enough about it (and are not incentivized) to get them to directly buy Bitcoins. An ETF would give exposure to Bitcoin to these Baby Boomer retirement types, of which there are many.

Buying shares on a publicly traded and regulated market (like NYSE), through your usual stock broker, would be a lot safer and more convenient for many investors than the current options available for investing into bitcoin. You don't have to worry about the unreliable exchanges, and semi-shady payment processors like Dwolla.

Same argument can be made for the gold and silver ETF's but they are wildly popular.

The same reasons there are other ETFs for commodities like gold, etc.

It makes betting against these items easier.

Converting USD to BTC is still not trivial.

plus it turns an underground darknet into something taxable!

thus fully transforming an anti-establishment force into a plaything for speculation and extraction for the 1%.