Early Bitcoin supporters remain skeptical of the wave of organizations, as the way of use, derivative products, and centralized custody models could erode the ethos of self-custody and the role of Bitcoin as a safe haven, according to Preston Pysh.
Pysh predicts organizations will use Bitcoin very differently than individuals. Nonetheless, a survey from Coinbase and EY-Parthenon indicates that a large majority of organizations still plan to increase their cryptocurrency allocation by 2025, intensifying the debate.
MAIN CONTENT
The Bitcoin culture emphasizes skepticism, self-custody, and opposition to the old financial model, contrasting with the usage by organizations.
The wave of derivative products, ETFs, and centralized custody raises concerns about the role of safe havens and systemic risk.
83% of institutional investors plan to increase cryptocurrency allocation in 2025 (Coinbase & EY-Parthenon), signaling deeper integration with traditional finance.
Who is Preston Pysh and what does he say about the wave of organizations?
He is the co-founder of Ego Death Capital, emphasizing Bitcoin's culture of skepticism and warning that institutions will use Bitcoin differently than individuals, creating value shocks.
Sharing in the Coin Stories podcast, Pysh argues that the mindset of 'question everything' has brought Bitcoin to its current state, so a defensive reflex against institutional participation is understandable. The core issue is the purpose of use: storing against inflation and asset autonomy, or optimizing profit, cash flow, and compliance.
Institutional platforms often prioritize derivative products, centralized custody, and regulatory compliance, while the Bitcoin community emphasizes self-custody and anti-censorship. This difference is the source of debate.
"A part of the culture that has brought Bitcoin to today is looking at where things are going and saying: no, no, no, everything is going in a bad direction."
– Preston Pysh, Co-founder of Ego Death Capital, Coin Stories podcast, Friday, source: YouTube/Natalie Brunell
Why are those who pushed Bitcoin past 1 trillion USD concerned about its direction?
They had self-custody and held through the 70%-80% drop, helping Bitcoin's market cap exceed 1 trillion USD, so concerns about shifting to a traditional financial model distorting the original objectives.
Pysh expresses a prevailing mindset: as organizations increase derivatives and product structures, some wonder if we'll see a repeat of past 'tricks.' The main concern is counterparty risk, refinancing, and forced selling pressure that could distort price behavior, eroding 'safe havens.'
Bitcoin first surpassed 1 trillion USD in February 2021, marking a significant psychological milestone (source: CoinDesk, 2021). Along with this, risk governance standards and transparency of institutional products became crucial for maintaining community trust.
How will organizations use Bitcoin 'very differently' than individuals?
Pysh states that organizations will optimize liquidity, compliance, and capital efficiency, while individuals prioritize asset sovereignty and anti-censorship. The gap in objectives leads to different experiences.
Organizations tend to use ETFs, futures contracts, swaps, centralized custody, accounting integration, and auditing. Individuals lean towards DCA, self-custody cold wallets, and long-term holding. Both approaches are valid but create different expectations about volatility, fees, and systemic risk.
Regarding governance, organizations must abide by regulatory constraints and trust, while individuals have autonomy. This leads to the debate: prioritize mass accessibility or maintain a decentralized ethos.
"The term we often joke about is that we are 'psychological Bitcoiners.'"
– Preston Pysh, Co-founder of Ego Death Capital, Coin Stories podcast, Friday, source: YouTube/Natalie Brunell
How can derivative products and ETFs impact Bitcoin's role as a safe haven?
Derivatives and ETFs help broaden access, but can also increase leverage, counterparty risk, and distance from self-custody, leading some to question the 'safe haven' status.
On January 10, 2024, the SEC approved 11 spot Bitcoin ETFs in the United States, marking a milestone in institutionalization (source: U.S. Securities and Exchange Commission, 2024). ETFs lower access barriers, but indirect ownership may obscure the message 'not your keys, not your Coin.'
Derivatives provide liquidity and hedging but can also amplify volatility during liquidation events. Balancing mass accessibility and minimizing systemic risk is the challenge for issuers and regulators.
Why does the culture of skepticism remain the 'firewall' of the Bitcoin community?
Skepticism is a defensive mechanism for the community against moral hazards and power centralization. Pysh calls it a necessary characteristic as the scale increases.
As Bitcoin integrates more deeply with traditional finance, the community's continuous questioning of custody models, reserve transparency, and leverage risks will encourage better standards. The history of cryptocurrency has many lessons on weak counterparties.
Skepticism does not equate to denying organizations but demands that they adhere to transparency standards, risk governance, and respect users' freedom of choice for self-custody.
In which surveys will institutional cash flow increase in 2025?
According to the March 18 report from Coinbase and EY-Parthenon, 83% of surveyed institutional investors plan to increase their cryptocurrency allocation by 2025.
This figure suggests long-term demand remains positive, despite short-term volatility. As accounting, tax, and custody standards improve, barriers to entry for organizations significantly decrease.
The increase in allocation will lead to demand for diverse products: ETFs, qualified custody, risk reporting, and hedging tools. If these standards are transparent, they can reinforce overall market confidence.
What is the community debating regarding the 'dominance' of organizations?
Debate centers around whether those Bitcoin aims to hedge against are gradually taking control of it. This represents a conflict of objectives between financial utility and the original ethos.
Analyst Scott Melker suggests that Bitcoin is 'great' but has been to some extent 'taken over' by those it was meant to hedge against. This view reflects concerns about organizations imposing old rules on new assets.
Conversely, Ryan McMillin (Merkle Tree Capital) notes that old Bitcoin selling to new institutions is a sign of 'integration with the financial system,' a necessary maturation step for broader acceptance.
What are the core differences: individuals vs. organizations in how they use Bitcoin?
The differences lie in the purpose of use, product structure, risk governance, and investment horizon. This determines the experience and expectations with Bitcoin.
Criteria Individual Organization Main Goals Asset sovereignty, anti-censorship, long-term accumulation Capital efficiency, compliance, portfolio diversification Tools Self-custody, DCA, cold wallets ETFs, derivatives, qualified custody Risk Governance Focus on individual risk, avoid counterparties Internal processes, custody partners, audits Horizon Long-term, accepting volatility Flexible, tied to KPIs, regulations
What should businesses and individuals pay attention to in the context of deeper integration?
Businesses should prioritize custody transparency, derivatives risk governance, and standard reporting; individuals should clearly understand ownership rights when using ETFs versus self-custody.
Choice depends on objectives: convenience, compliance, or absolute sovereignty. A multi-layered protection, multiple providers, and independent reserve verification help reduce systemic risk.
Balancing scalability and the ethos of freedom is key for Bitcoin to be widely accepted while not losing its original identity.
FAQ
Why do early supporters still remain skeptical of institutions?
They fear that the ethos of self-custody and safe havens will be diluted by derivatives, ETFs, and centralized custody. This viewpoint is emphasized by Pysh in the Coin Stories podcast.
Do spot ETFs undermine Bitcoin's role as a safe haven?
ETFs broaden access but represent indirect ownership, increasing counterparty risk. The role of safe haven depends on reserve transparency, risk governance, and user self-custody rights.
How does the organization use Bitcoin differently than individuals?
Organizations prioritize compliance, liquidity, derivatives, and centralized custody; individuals prioritize asset sovereignty, self-custody, and long-term holding.
Where does the figure of 83% increase in allocation come from?
The March 18 report from Coinbase and EY-Parthenon surveyed institutional investors, with 83% indicating they would increase cryptocurrency allocation in 2025.
Is Bitcoin being 'taken over' by organizations?
The debate remains open: some worry about 'takeover,' while others see it as an inevitable integration with traditional finance, as noted by Ryan McMillin with Cointelegraph.
Source: https://tintucbitcoin.com/preston-pysh-bitcoiners-hoai-nghi-dinh-che/
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