According to Blockworks, Arthur Hayes, founder of Maelstrom Fund and a prominent figure in the crypto world, has expressed concerns about the potential approval of a spot bitcoin ETF. He believes that increased institutional interest in bitcoin could lead to negative consequences for the cryptocurrency and its users. In a hypothetical scenario, Hayes suggests that traditional finance institutions, such as BlackRock, could accumulate a significant portion of the freely traded bitcoin in circulation and launch bitcoin mining ETFs. He points out that BlackRock is already the largest shareholder of some of the largest mining operations.
Hayes argues that asset managers like BlackRock are essentially 'agents of the state' and act on the state's instructions. If the state requires its citizens to remain in the fiat banking system for taxation purposes, it would make sense for institutional entities to hold money in an ETF vehicle. In such a system, the actual use of bitcoin would be limited, as it would become a financial asset rather than a usable currency.
Furthermore, Hayes warns that if a BlackRock ETF becomes too large, it could potentially 'kill' bitcoin by rendering it immovable and stagnant. He also highlights the risk of these institutions gaining control over the network's consensus mechanics by holding a large percentage of miners. This could hinder necessary upgrades to ensure bitcoin remains a secure and private monetary asset, as traditional finance institutions may not support such changes.
Hayes acknowledges that broader adoption of bitcoin would likely increase its price in fiat terms, but questions whether this would be beneficial for the cryptocurrency's overall usefulness. He urges people to consider the long-term implications of a single institution holding a large amount of crypto and the potential negative impact on bitcoin's future.
