The Dark Side of Crypto ETFs

How ETFs Might Undermine Satoshi’s Vision

The approval of Bitcoin, Ethereum, and Solana ETFs has generated excitement among investors. However, there are growing concerns that these financial products might not be as beneficial for the cryptocurrency ecosystem as they appear.

Some believe they could be Trojan horses designed to control what was meant to be uncontrollable.

Major Institutions’ Sudden Interest in Crypto

Historically, major institutions like BlackRock have been critical of Bitcoin. For instance, BlackRock’s CEO, Larry Fink, once remarked, “Bitcoin just shows you how much demand for money laundering there is in the world. That’s all it is.” Yet, BlackRock has now launched a spot Bitcoin ETF. This sudden change in stance raises questions about their true motives.

BlackRock’s Global Tokenization Plans

BlackRock’s interest extends beyond Bitcoin. They have ambitious plans for global tokenization, aiming to tokenize assets like real estate, energy, and agriculture. While this might seem like a positive development, it could undermine the foundational principles of cryptocurrencies.

ETFs and Bitcoin’s Original Purpose

Bitcoin was originally designed by Satoshi Nakamoto as a peer-to-peer payment system, not just a speculative asset or store of value.

However, ETFs turn Bitcoin into a speculative product, shifting its original utility.

Although solutions like the Lightning Network can enhance Bitcoin’s role as a payment system, a lack of liquidity could hinder its adoption.

The Impact of ETF Growth on Bitcoin

Currently, most Bitcoin is held by individuals, but this could change as ETFs grow. ETFs now represent 4% of the total BTC. While this may seem low, it’s significant given the short accumulation period. As ETF holdings increase, they could make Bitcoin more manipulable.

The Risk of Liquidation and Price Manipulation

Bitcoin ETFs have clauses allowing them to be liquidated at any time. This means that under certain conditions, like regulatory changes, all Bitcoin in the ETF could be sold, causing a massive liquidation and price drop.

Moreover, BlackRock chose J.P. Morgan as a counterpart for its Bitcoin ETF. J.P. Morgan has a history of financial scandals, including manipulating gold prices.

In December 2023, J.P. Morgan CEO Jamie Dimon said he would “close down” Bitcoin and crypto if he were the government. Twenty days later, BlackRock named J.P. Morgan as a counterpart for its Bitcoin ETF, highlighting potential conflicts of interest.

Broader Implications: Digital Development and Control

BlackRock shares a vision with the United Nations, including goals like digital development with integrated wallets, health cards, digital currencies, smart cities, and blockchain technologies.

While these goals seem positive, they align with increasing control and surveillance, contrasting with the decentralization and freedom cryptocurrencies were meant to promote.

Maintaining Independence in the Crypto Space

For many, the goal of cryptocurrencies is to achieve freedom and independence in payment systems and technology. However, institutions like BlackRock and governments have different goals.

They do not prioritize individual freedom or independence. Therefore, it’s crucial to remain cautious of new financial products and to hold onto your Bitcoins to maintain control over your assets.