Spot Bitcoin ETFs Could ‘Destroy’ Bitcoin: Arthur Hayes
If spot bitcoin (BTC) exchange-traded funds (ETFs) become too successful, bitcoin could “completely destroy them,” warned the former CEO of BitMEX.
Hayes – — who co-founded the founding exchange BitMEX in 2014 — explained in a Dec. 23 blog post that bitcoin's value “moves.”
“Explanation” is my last article of 2024. I'll offer some thoughts on #cryptoinvestment theme statements that will ultimately be worthless.
May the pump be with you! pic.twitter.com/nbru6yZlJD
— Arthur Hayes (@CryptoHayes) December 23, 2023
However, Spot Bitcoin ETFs are made to “dispose of the assets” and “store them in symbolic storage”.
If Bitcoin ETF issuers end up holding all the Bitcoin and investors start buying Bitcoin derivatives instead of HODLing themselves – the number of transactions on the network will dry up and miners will lose any incentive to keep validating transactions.
“The end result is that miners shut down their machines because they can't afford the energy needed to run them,” Hayes said.
“Essentially, if the ETFs managed by TradFi Asset Managers are very successful, they will destroy Bitcoin entirely.”
A new article by Arthur Hayes has been dropped. ETFs can kill bitcoin. It is very likely that the price of Bitcoin will increase to keep only miners. This has always been the case, but the solution was for transaction fees to provide miners with income. pic.twitter.com/rn7V5hEv2F
— Hellboy (@Crypto_Hellboy) December 24, 2023
Interestingly, Hayes thinks that if such a scenario were to happen, a new cryptocurrency network would replace Bitcoin and even expand on Satoshi Nakamoto's first vision of peer-to-peer electronic money.
“It's beautiful when you think about it. If Bitcoin was just another government-controlled financial asset, it would die of disuse.
“The people will once again have money and a financial system that is not controlled by the government. Hopefully, the second time around, we'll learn not to give away our private keys [Wall Street firms]He said.
RELATED: Spot Bitcoin ETF License to Push BTC to $1M in ‘Days to Weeks', Says Samson Mou
Hayes Bitcoin Music Bloomberg analysts expect to take place between January 5 and January 10, 2024, two weeks before all pending Bitcoin ETF applications are approved.
BlackRock, Grayscale, BitWise, WisdomTree, Invesco and Galaxy, Fidelity, ArchInvest, Valkyrie, Franklin, Hashdex, GlobalX ETF and Pando Asset are all awaiting SEC rulings on Bitcoin ETF applications everywhere.
Magazine: Legislators' fear and skepticism fuel proposed crypto regulations in the US.
