In a recent statement, Bitcoin’s potential downfall has been a cause for concern, as highlighted by Arthur Hayes, the former CEO and co-founder of BitMEX.Hayes particularly focused on the possible launch of Spot BTC ETFs, emphasizing that traditional financial (TradFi) asset managers could pose a significant threat to the pioneer cryptocurrency.
In his year-end article, Hayes asserted that if ETFs managed by traditional asset managers were wildly successful, they could “completely destroy Bitcoin.” He argued that Bitcoin’s uniqueness, distinguishing it from other monetary instruments, meant it was not designed to be controlled by these asset managers.
Hayes speculated that if the world’s largest asset managers accumulated all circulating BTC, it could destroy the cryptocurrency.
Bitcoin’s Vitality Relies On Activity And Trading, Warns Arthur Hayes
Highlighting Bitcoin’s nature as an asset that thrives on movement and usage, Hayes contended that the cryptocurrency would “die” if it became stagnant. He emphasized the importance of active trading for Bitcoin’s survival. He noted that miners would lose transaction fees if the tokens were merely stored without being traded, potentially causing the BTC network to collapse.
Hayes’ remarks coincide with the impending decision on Spot BTC ETF applications. The former BitMEX CEO has previously expressed reservations about these funds and their issuers, suggesting that traditional financial institutions seek to become “crypto gatekeepers” rather than genuinely embracing Bitcoin’s ethos of decentralization.
While Hayes remains critical of institutional interest in BTC, some experts, like Bloomberg Analyst Eric Balchunas, see potential benefits in approving Spot BTC ETFs. Balchunas emphasizes the convenience these ETFs offer investors, and others are optimistic about the increased capital inflow that could follow their approval.
As the debate over the impact of institutional involvement in BTC continues, contrasting views emerge on whether it will hinder or contribute to the cryptocurrency’s mainstream adoption.