PEOPLEBITCOIN

Not optimistic about Bitcoin ETF, BitMEX founder: BlackRock is like a national agent, fearing it will accelerate destruction

share
Not optimistic about Bitcoin ETF, BitMEX founder: BlackRock is like a national agent, fearing it will accelerate destruction

BitMEX founder Arthur Hayes recently sat down for an interview with Blockworks, where he expressed his skepticism towards the current enthusiasm within the crypto community for a Bitcoin spot ETF.

Arthur Hayes: BlackRock Acts as a National Agent

Arthur made several assumptions regarding the launch of a spot ETF by institutions:

  1. The government would want the public to keep fiat currency within the banking system

  2. Institutions like BlackRock act as national agents and act according to national directives

  3. Institutions like BlackRock naturally comply with the state and will lock up fiat through ETFs

He stated:

The situation could be unfavorable if Larry Fink, CEO of BlackRock, and his traditional financial partners get involved, absorbing a large amount of Bitcoin spot.

ETFs Could Significantly Reduce Bitcoin On-Chain Activity

If institutions do indeed hold a large amount of Bitcoin due to demand for Bitcoin spot ETFs, Arthur believes this could ruin Bitcoin:

Holding a spot ETF does not involve using Bitcoin; the reality is that you buy this derivative product with fiat currency, asset management institutions buy some Bitcoin for you and store it with custodian institutions. If the scale is too large, it will become a pile of immovable Bitcoin held by institutions.

This Also Poses a Crisis for Bitcoin's Consensus Mechanism

Arthur also warned that related institutional entities could control the Bitcoin network's consensus mechanism by holding a large amount of mining company stocks.

Of course, institutional promotion of ETFs will certainly have a positive impact on BTC prices, but Arthur still doubts:

Will this improve Bitcoin's actual ability to send funds globally? What will happen if the majority of Bitcoin ultimately ends up in the hands of a few institutions? What will be the consequences of our desire for instant gratification today, possibly leading to a major crisis in the future? I don't know.