The Dark Side of the Bitcoin ETFs

TL;DR

• The firms running the BTC ETFs have enough money to buy up a significant portion of the circulating Bitcoin supply, stoking centralization fears.

Full Story

Most people are stoked on the Bitcoin ETFs, cause they're pushing the price of the crypto market up.

(ICYMI: we just saw another all time high in BTC price over the weekend).

But others are ringing the alarm bell…

Here’s the basic gist of their argument:

By making it easy/legal for big players in the traditional financial (TradFi) world to invest in Bitcoin via Exchange Traded Funds (ETFs) — we’re inviting centralization risk into Bitcoin and any other crypto that has an ETF built around it.

The idea being:

Sure, Bitcoin is a $1.3T asset — but the management firms that are running these ETFs have tens of trillions of dollars to play with.

And the fear is, over time, with a small percentage of their total funds, these firms could own a significant portion of the Bitcoin supply — enough to easily manipulate the price, and concentrate a silly amount of wealth in one place.

Here’s our take (which we kinda stole from Satoshi):

Satoshi once celebrated lost Bitcoin, in that…

The more is lost → there less there is → the more scarce 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 does come with its upsides…

These asset managers tend to have a ‘buy and hold’ strategy, which means more Bitcoin is being taken off the market, for longer.

(Making it scarcer/more valuable).