According to Arthur Hayes, Spot Bitcoin ETFs Might “Completely Destroy” Bitcoin

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Last Updated on December 26, 2023 by Bitfinsider

The former CEO of BitMEX cautions that spot Bitcoin exchange-traded funds (ETFs) have the potential to “completely destroy” Bitcoin if they become too popular.

In a blog post dated December 23, Hayes—who alongside others co-founded the cryptocurrency exchange BitMEX in 2014—explained why Bitcoin is valuable: “It moves.” Spot Bitcoin ETFs, meanwhile, are designed to “vacuum up assets” and “store them in a metaphorical vault,” according to him.

The network will see a decline in transactions and miners will no longer have an incentive to continue verifying transactions if Bitcoin ETF issuers wind up holding all of the cryptocurrency and investors purchase Bitcoin futures instead of hoarding themselves.

According to Hayes, he says: “The end result is miners turn off their machines as they can no longer pay for the energy required to run them,” and that “Without the miners, the network dies, and Bitcoin vanishes.”

Interestingly, Hayes predicted that in the event that such a scenario materialized, Bitcoin would be replaced by a new cryptocurrency monetary network that would even go beyond Satoshi Nakamoto’s initial concept of peer-to-peer electronic money.

“The people will once again have a non-state-controlled monetary asset and financial system. Hopefully, the second time around, we will learn not to hand our private keys to Wall Street firms,” he added.

Just two weeks remain until all pending spot Bitcoin ETF applications are expected to be approved, which Bloomberg analysts predict will happen between January 5 and January 10, 2024. This is when Hayes’ thoughts on Bitcoin will take place.

The SEC is now reviewing applications for spot Bitcoin ETFs from BlackRock, Grayscale, Bitwise, WisdomTree, Invesco, Galaxy, Fidelity, ARK Invest, Valkyrie, Franklin, Hashdex, Global X ETFs, and Pando Asset.

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