Traditional Finance Threatens Bitcoin
In a recent blog post, Arthur Hayes expresses concern about traditional finance firms potentially destroying Bitcoin. He warns that if spot Bitcoin ETFs managed by these firms are too successful, they could completely undermine the cryptocurrency.
“If you dug a hole and deposited gold and reams of paper and came back in 100 years, the gold and paper would still exist. Bitcoin is completely different. Bitcoin is the first monetary asset in human history that exists only if it moves.”
Hayes specifically highlights BlackRock, the world’s largest traditional finance asset manager, as being involved in asset accumulation. He believes they will store Bitcoin and issue tradeable securities tied to it, leading people to prefer buying Bitcoin ETF derivatives instead of holding actual Bitcoin in self-custodial wallets.
This could result in a future where the Bitcoin blockchain becomes obsolete, causing miners to shut down their machines. Without miners, the network would collapse and Bitcoin would vanish.
Bitcoin’s Future in 2024
Hayes predicts that 2024 will be a significant year for Bitcoin due to the potential approval of spot Bitcoin ETFs by the U.S. SEC, upcoming elections, and a surge in global money printing.
According to Hayes’ chart, Bitcoin has outperformed gold, the S&P 500, and the Nasdaq 100 since 2020, with a 228% increase.
However, in the past 24 hours, the price of BTC has fallen over 1%, currently trading at $43,613. The trading volume has also decreased by 11%, indicating a decline in trader interest.
Analyst Ali Martinez points out that despite the recent uptick in BTC price, there is a more cautious approach in the crypto market, as indicated by a decrease in the Estimated Leverage Ratio.
Hot Take: The Threat to Bitcoin
Arthur Hayes’ warning about traditional finance firms potentially destroying Bitcoin through successful spot Bitcoin ETFs raises concerns about the future of the cryptocurrency. If asset managers like BlackRock store Bitcoin and issue tradeable securities tied to it, the need for the Bitcoin blockchain and miners could diminish, leading to its demise. However, with potential approval of spot Bitcoin ETFs and other factors in 2024, Bitcoin’s future remains uncertain but intriguing.
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