Wall Street giant BlackRock’s recent move into the cryptocurrency market signals a historic milestone in the sector as the company prepares to launch its Bitcoin Exchange-Traded Fund (ETF), generating optimism among investors.
However, Arthur Hayes, co-founder of BitMex and influential figure in the cryptocurrency market, made a grim prediction: the success of this ETF would “Totally destroy Bitcoin.”
Hayes argues that BlackRock, focused on asset accumulation, could accumulate a significant amount of bitcoin, leading to a situation where transactions would become virtually non-existent.
According to the billionaire, this would hurt miners, who rely on transaction fees to continue their operations. The lack of financial incentives could cause them to shut down their machines, putting the survival of the Bitcoin network at risk.
“Imagine a future where the largest Western and Chinese asset managers own all the Bitcoins in circulation. This happens organically when people confuse a financial asset with a store of value. Due to their confusion and laziness, people are buying Bitcoin ETF derivatives instead of buying Bitcoin and holding it in their own managed wallets. Now that a handful of companies own all the Bitcoin and can’t really use the Bitcoin blockchain, the coins never move again. The end result is that miners turn off their machines because they can no longer afford the energy required to run them. Goodbye, Bitcoin!” – argued Hayes.
“Bitcoin can be completely destroyed”
Following his text, Hayes speculates about the future of cryptocurrencies in the event of a Bitcoin crisis. He suggests that Bitcoin’s “death” could give way to the rise of a new crypto-monetary network, whether it’s a rebooted version of Bitcoin or a completely different innovation.
The excitement around BlackRock’s Bitcoin ETF is palpable, especially with the US Securities and Exchange Commission (SEC) expected to greenlight the project in early 2024.
A recent leak has revealed that the SEC has set a December 29 deadline for “final updates” of Bitcoin ETF applications, hinting at a possible mass approval early in the new year.
“Blackrock is in the asset accumulation game. They collect assets, store them in a metaphorical vault, issue tradable securities, and charge management fees for their “hard” work. They don’t use the things they own on behalf of their customers, which poses a problem for Bitcoin if we take an extreme view of a possible future.” said Hayes.
As 2024 approaches, the crypto market is on the cusp of a potentially radical transformation, fueled by the arrival of major Wall Street players and evolving economic policies.
For Hayes, however, this will be the beginning of the end for the world’s largest cryptocurrency.
“If Bitcoin becomes just another state-controlled financial asset, it will die because it will not be used. Bitcoin’s death then creates space for another crypto-monetary network to grow in its place. This network could simply be a reboot of Bitcoin or something else that is an improved adaptation of the original Bitcoin. In any case, the people will once again have a monetary asset and a financial system that is not controlled by the state. Hopefully the second time around we’ll learn not to hand over our private keys to the bald guys.”
The best time to buy Bitcoin is now
Finally, Hayes emphasizes that the ideal time to invest in Bitcoin was in the past, but the next best opportunity is now. The statement highlights the investment community’s growing recognition of the potential of cryptocurrencies to combat the degradation of fiat currencies.
He has also openly criticized figures like Nouriel Roubini, known for his skeptical views on cryptocurrencies, calling him a “talentless thug clown.” Hayes points to Roubini’s article in the Financial Times on ‘flatcoins’, suggesting that these new proposals are yet another attempt to divert attention from real cryptocurrencies.
Moreover, Hayes warns against uncritically accepting the proposals of the state and its allies regarding cryptocurrencies.
He compares such proposals to “delicious sweets” that may seem attractive but are potentially deceptive and dangerous. Hayes advises caution and recalls the old teachings of parents about not accepting food from strangers, and applies it metaphorically to the world of digital finance.
“The best time to buy Bitcoin and start your journey into the world of cryptocurrencies was yesterday, the next best time is now. Clearly, the investment community recognizes the promise of cryptocurrencies to counter the degradation of fiat. The state and its minions will introduce delicious sweets into your child’s brain. But do what your parents taught you and don’t accept food from strangers.’
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
