Prominent Crypto Expert Says Bitcoin ETF Will Happen, But Hurts Market’s Future
Bitcoin Expert: Bitcoin ETF May Not Be a Good Thing
The future of Bitcoin is, to many within the constantly growing community, reliant on the eventual creation and governmental endorsement of a Bitcoin ETF. An ETF is an Exchange-Traded Fund, and it may just be the key to an influx of institutional money within the growing market for trading Bitcoin. But so far, the outlook has been grim to say the least. Several ETF applications this year alone have been presented to the SEC, the agency tasked with regulating the trade of securities.
But so far, there has been no acceptance of any kind of Bitcoin ETF, despite attempts by numerous major financial companies within the traditional financial sector. The reasoning for the rejections has been spotty at best, with very few of the main executives within the SEC willing to testify in favor of an ETF for the most popular cryptocurrency currently on the market. Despite the gloom, many within the cryptocurrency community still look forward to the day that the markets embrace a Bitcoin ETF.
According to author and renowned cryptocurrency expert Andreas Antonopoulos, however, the creation of a legal Bitcoin Exchange-Traded Fund would be very bad for the cryptocurrency community. While he recognizes that the markets might rally slightly following the introduction of a Bitcoin ETF, the long-term implications of the system will be bad for Bitcoin, as well as for the millions that hold stock in the currency.
Bitcoin ETF Explained
Antonopoulos was clear in his explanation of a Bitcoin ETF, saying that it functioned as a way for the cryptocurrency investors to gain access to the market without having to hold the cryptocurrency itself. This is very good for the average investor for several reasons. For one, there are several notable security risks associated with owning cryptocurrencies. Additionally, the process of securing and owning cryptocurrency itself is difficult—and increasingly technical in nature.
An ETF holds Bitcoin and allows investors to pour their money into the market, speculating on either the positive or negative price trends which might characterize its future.
The main crux of the argument made by Antonopoulos has always been that while a Bitcoin ETF would likely contribute to gains in the short term, it would be very bad for the long-term health of the market. Specifically, he cites the opportunity for manipulation in the thus-far decentralized cryptocurrency trade markets as one reason that ETF creation might be a very bad thing.
He refers to some aspects of ETF creation as the catalyst for “pseudo-centralization.” This happens when the community surrounding Bitcoin remains devoted to decentralization, but the actions taken by regulators bring cryptocurrency to the main market in a way that is conducive to de facto centralization. The power would be largely concentrated in the hands of people who hold keys to main Bitcoin accounts.
The main implication of this process would be that the cryptocurrency community would lose a big part of its democratization of decision-making, which is a central aspect of the philosophy behind the currency.