Godfrey Benjamin
BitMEX co-founder Arthur Hayes reveals why the BlackRock ETF could hurt Bitcoin
Cover image via youtube.be
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As the approval of a preliminary Bitcoin exchange-traded fund (ETF) appears to be getting closer, BitMEX founder Arthur Hayes has expressed concern about the role of the BlackRock ETF, claiming that it could end Bitcoin’s existence if it gets too big.
The rare recording of Arthur Hayes
In Hayes’ eyes, Bitcoin (BTC) represents the opposite of government money, designed to enable individuals to send funds worldwide. However, he questions the consequences if the majority of Bitcoins end up in the custody of a few institutions.
According to Hayes, asset managers like BlackRock are effectively “agents of the state” who act in accordance with government guidelines.
He suggests that these companies may prefer to hold Bitcoin in ETFs as this suits the interests of the state, particularly in terms of taxation through inflation and servicing rising debt. However, in such a case, Bitcoin essentially becomes a financial asset rather than the decentralized currency it should be.
He explained: “You had some fiat, you bought this derivative, and the asset manager bought some Bitcoin and deposited it in a custodian and it sits there.”
He argues that this could cause Bitcoin to stagnate and fall into disuse, posing a potential risk to its true nature.
Hayes warns of increased mining control
Another aspect of Hayes’ warning concerns the potential control that large companies like BlackRock could exert over the Bitcoin network through mining.
Hayes noted that institutional firms like BlackRock could potentially launch Bitcoin mining ETFs, with BlackRock already holding significant stakes in some of the largest mining operations. In his opinion, this could lead to a centralization of control within the Bitcoin network.
Bitcoin mining involves solving complex mathematical puzzles to validate and record transactions on the blockchain. With enough mining power, Hayes warns, a company could potentially influence the consensus and decision-making processes of the Bitcoin network.
About the author
Godfrey Benjamin
Godfrey Benjamin is an experienced crypto journalist whose main goal is to educate everyone around him about the prospects of Web 3.0. His love for cryptocurrencies was born when, as a former banker, he discovered the obvious advantages of decentralized money over traditional payments. Due to his extensive experience in various aspects of Web3, Godfrey’s articles have been published on Blockchain.news, Cryptonews and Coingape, among others.
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