Why Bitcoin Dominates ETF Talks
The focus on ETFs in the crypto world is currently centered around Bitcoin. But why is there little discussion about Ethereum or other cryptocurrencies? This article aims to shed light on why big players prefer Bitcoin ETFs over other crypto options.
Bitcoin’s Superiority Over Altcoins
Bitcoin is considered the most stable and secure cryptocurrency due to its fixed supply and resistance to change. Altcoins like Litecoin can coexist with Bitcoin, but others like BCH or BSV fall short in comparison. Ethereum, despite its popularity, lacks the same level of stability and decentralization.
The Centralization of Proof of Stake (PoS) Protocols
While PoS networks like Ethereum claim to be decentralized, they often have a high concentration of validators. Ethereum, for example, has a significant concentration of validators through liquid staking programs. This concentration gives these protocols control over potential changes in Ethereum’s system.
Comparing Bitcoin with Other Crypto Ventures
Cryptocurrencies like Cardano, Cosmos, and Polkadot are not yet large or liquid enough for institutional investors seeking ETFs. Their daily trading volumes are significantly lower than those of Bitcoin. Additionally, their governance and design principles may not align with the preferences of major institutions.
The Significance of Custody
Institutional players are eager to become authorized participants (AP) for ETFs because it offers benefits like maintaining custody of securities and earning passive income. Coinbase, Fidelity, Goldman Sachs, and Blackrock are all vying to become APs for Bitcoin ETFs.
Hot Take: Bitcoin’s Value Proposition for Institutions
Bitcoin’s scarcity and potential for value appreciation make it an attractive asset for institutional investors. As fiat currencies continue to face inflation and devaluation, institutions like Goldman Sachs and Blackrock want to
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