Arthur Hayes: Large BlackRock ETF Could Stifle Bitcoin

Arthur Hayes suggests that the growing institutional interest in Bitcoin may indicate a situation that we may not like in the end. He mentions that the same institutional entities could launch Bitcoin mining ETFs and adds that “BlackRock is the largest shareholder in some of the biggest mining businesses.”

Hayes explains that asset management companies like BlackRock effectively act as “agents of the state,” following the state's directives. In the ETF system, users purchase derivatives with fiat currency. Asset management companies buy some Bitcoin and then hand it over to a custodian for safekeeping. Users cannot actually use Bitcoin; what they acquire are financial assets, not Bitcoin itself.

Hayes warns that if BlackRock's ETF becomes too large, it might effectively strangle Bitcoin because it's just a pile of immobile Bitcoin. He suggests that Bitcoin is the opposite of centralized currencies. But if most of the funds end up bein