As the crypto industry awaits approval for spot Bitcoin ETFs in the U.S., BitMEX founder Arthur Hayes warns that their success may jeopardize Bitcoin’s existence. Despite concerns, BlackRock and other firms move forward with revised filings, indicating a potential January launch. This development sparks debates on the impact of ETFs on Bitcoin’s future and market dynamics.
Arthur Hayes, founder of BitMEX, issues a stark warning about the potential consequences of successful spot Bitcoin ETFs. In his view, if these ETFs, managed by traditional asset managers, gain significant traction, they could spell the end for Bitcoin. Hayes argues that as traditional finance (TradFi) firms accumulate more Bitcoin through ETFs, direct transactions in the cryptocurrency might decline.
In this envisioned future, people may opt for Bitcoin ETF derivatives over holding the actual cryptocurrency in self-custodied wallets. This shift in preference could lead to a scenario where a handful of large asset managers in the Western and Chinese markets control the majority of circulating Bitcoin. As a result, Bitcoin miners may face a situation where shutting down operations becomes inevitable due to the lack of demand, ultimately threatening Bitcoin’s survival.
Despite these warnings, firms like BlackRock, Hashdex, and Pando proceed with revised filings for spot Bitcoin ETFs. BlackRock, in particular, proposes a substantial $10 million seed funding, hinting at potential preparedness for a forthcoming launch. Bloomberg analyst James Seyffart notes the alignment of BlackRock’s timeline with earlier predictions of a January launch, underlining the firm’s eagerness pending regulatory approval.
Bitcoin’s price, however, remains resilient amid these developments, briefly touching $44,000 before correcting to $43,642 at the time of writing. Analysts observe key resistance levels and discuss potential scenarios, adding an additional layer of complexity to the evolving narrative around Bitcoin ETFs.