Most of the crypto community seems to believe that institutional traders adopting Bitcoin can be a huge thing for the market. Surely, prices will go up, but is that the right way for the network to grow? During a recent interview with RealVision, the Chief Strategy Officer of CoinShares, Meltem Demirors, has affirmed that this might not be the win-win situation that most people believe.
According to her, big financial players are set to transform how Bitcoin is seen around the world. Bakkt, the futures exchange of the giant Intercontinental Exchange (ICE), is set to change how the market operates and the same can be said about other successful companies such as Grayscale, for instance, which is having a pretty good year.
This will impact the market. Demirors, however, was somewhat skeptical about the centralization that this could cause. If half of the supply was stored somewhere and people now had receipts to prove that they owned BTC, how different would it be from fiat currency? How decentralized? Would Bitcoin still be the same? This is how she put it:
“If we take 50% of the world’s Bitcoin and we put it in custody with a custodian that’s regulated… and we take these Bitcoins, and we put them in a vault somewhere… and then we issue Bitcoin depository receipts — pieces of paper that allow us to trade the underlying Bitcoins sitting in a vault somewhere — but we never actually exchange Bitcoin on the Bitcoin network, is that still Bitcoin?”
These are important questions that need to be addressed. Bakkt did not have a great launch and it started slowly, but it would be naive to believe that this kind of platform does not slowly change how the market operates.
With so many asset managers in the game (including CoinShares), won’t Bitcoin stray away from what it was created to be? At the moment, we can only speculate, but we’ll probably have the answer to the question in a few years from now.