TL; DR
Full story
Most people are excited about Bitcoin ETFs because they are pushing up the price of the crypto market.
(ICYMI: we just saw it another all-time high in BTC price over weekend).
But others are sounding the alarm…
Here’s the gist of their argument:
By making it easy/legal for major players in the traditional finance (TradFi) world to invest in Bitcoin through Exchange Traded Funds (ETFs) – we invite centralization risk into Bitcoin and any other cryptocurrency that an ETF is built around.
The idea is:
Sure, Bitcoin is a $1.3 trillion asset, but the management companies that run these ETFs are tens of trillions of dollars to play with.
And the fear is that with a small percentage of their total resources, these companies could own a significant portion of the Bitcoin supply over time – enough to easy manipulate the price and concentrate a crazy amount of wealth in one place.
Here’s our opinion (which we stole a bit from Satoshi):
Satoshi once celebrated the lost Bitcoin, in that sense…
The more is lost → there is less → the scarcer BTC becomes → the more valuable the BTC we all have in our personal wallets becomes.
While the concerns surrounding TradFi players hoarding BTC are absolutely valid, it also has its benefits…
These asset managers typically have a ‘buy and hold’ strategy, which means that more and more Bitcoin is withdrawn from the market.
(Making it scarcer/more valuable).