BitMEX Co-Founder Warns of Potential Risks of Bitcoin ETF Approval
Arthur Hayes, co-founder of BitMEX, is raising concerns about the approval of a spot Bitcoin exchange-traded fund (ETF) and its potential impact on the cryptocurrency. He specifically highlights the risk of traditional finance asset managers like BlackRock dominating the market and holding “all the Bitcoin in circulation.” This scenario could lead to the decline of Bitcoin as investors may opt for Bitcoin ETF derivatives instead of buying and holding the actual cryptocurrency. Hayes warns that this could result in a future where Bitcoin is stored in vaults, miners lose income, and the network dies.
Bitcoin’s Dominance as a Hedge Against Fiat Debasement
Hayes also notes that Bitcoin has experienced significant growth since 2020, outperforming most traditional assets. He sees this growth as a sign of BTC’s dominance as a hedge against fiat debasement. However, he advises investors to avoid permission-based DeFi projects, tokenized real-world assets, and governance tokens tied to debt yields.
Hayes Shifts Investments from Solana to Ether
Prior to his blog post, Hayes revealed on social media that he had moved his investments from Solana (SOL) to Ether (ETH). Despite previously criticizing Solana, Hayes now believes Ether will surpass its previous peak and reach $5,000. It’s worth noting that Solana has outpaced Ether’s performance during the current crypto market resurgence.
Hot Take: The Future Impact of a Bitcoin ETF
Arthur Hayes raises valid concerns about the potential consequences of a spot Bitcoin ETF dominated by traditional asset managers like BlackRock. If these firms hold all the circulating Bitcoin and investors turn to ETF derivatives instead of owning the actual cryptocurrency, it could lead to a future where Bitcoin is merely stored in vaults, miners lose income, and the network dies. While Bitcoin has shown impressive growth and serves as a hedge against fiat debasement, investors should be cautious of permission-based DeFi projects and tokenized real-world assets. Hayes’ decision to shift investments from Solana to Ether indicates his belief in Ether’s future performance.
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