‘Massive Calamity’—BlackRock And The U.S. Government Could Be About To ‘Kill’ Bitcoin Amid Huge Ethereum, XRP And Crypto Price Rally

7 November 2023

in XRP

Reading Time: 5 mins read

BitcoinBTC has been turbo-charged in recent months by soaring expectations the world’s largest asset manager, BlackRockBLK, could be about to lead a Wall Street bull run (though some credit a shock Federal Reserve flip).

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The bitcoin price topped $35,000 per bitcoin last month for the first time since early 2022, pushing the ethereum price and XRPXRP price higher along with the wider crypto market as fears emerge of a potential bitcoin “rug pull.”

Now, legendary bitcoin and crypto trader Arthur Hayes has warned that bitcoin and crypto could be sleepwalking toward “massive calamity,” warning BlackRock and the U.S. government could be about to “kill” bitcoin.

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and crypto, with some suggesting asset managers like BlackRock are “agents of the state” and not good for bitcoin.

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“If the BlackRock [bitcoin spot exchange-traded fund (ETF)] gets too big, it could actually kill bitcoin because it’s just a bunch of immovable bitcoin that’s just sitting there,” Hayes, who cofounded crypto derivatives pioneer BitMex, told Blockworks.

In June, BlackRock kicked off a Wall Street race to get a long-awaited U.S. bitcoin spot ETF to market following years of Securities and Exchange Commission (SEC) rejections.

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Expectations that a bitcoin spot ETF in the U.S. could be imminent soared over the summer, further boosted by crypto asset manager Grayscale winning a significant legal victory in its bid to convert its flagship bitcoin trust into a fully-fledged bitcoin spot ETF.

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Grayscale, owned by the sprawling Digital Currency Group empire, is the largest known owner of bitcoin, with almost 650,000 bitcoin—four times that of Micahel Saylor’s MicroStrategyMSTR, the software company that has been buying huge amounts of bitcoin since 2020.

The SEC has said it’s still considering whether to wave through a flurry of bitcoin spot ETF applications, though the market is betting one could become available to traders and Wall Street within the next few months.

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expectations that BlackRock and Wall Street could be about to pile into the crypto market, boosting ethereum, XRP and other major cryptocurrencies.

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“Let’s say [BlackRock chief executive] Larry Fink and his [traditional finance] ilk come in and hoover up a large percentage of the freely traded bitcoin in circulation,” Hayes said, arguing bitcoin spot ETFs that require institutions to buy up huge volumes of bitcoin could give them control of bitcoin’s consensus mechanics.

“BlackRock is the largest shareholder of some of the largest [bitcoin] mining operations,” Hayes said, warning the same Wall Street giants that want to create bitcoin spot ETFs could launch bitcoin mining ETFs as well.

“Are we, you know, gaining a sugar high today only to engender a massive calamity in the future? I don’t know.”

Wall Street asset managers like BlackRock are “agents of the state,” according to Hayes who thinks “they act on what the state tells them to do”—feeding fears the U.S. is waging a secret war on bitcoin and crypto that’s become known as Operation Choke Point 2.0.

This year, the traditional financial service sector has pulled back from the crypto industry and market, with a flurry of bank failures earlier this year linked by some to their crypto services who fear the banking crisis was partly directed by the U.S. government and regulators.

The original 2013 Operation Choke Point was a U.S. Department of Justice initiative to discourage banks from working with firearm dealers, payday lenders, and other companies believed to be at a high risk for fraud and money laundering.

In September, Binance CEO Changpeng “CZ” Zhao issued a “frank” Operation Chokepoint 2.0 warning.

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I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of Verdict.co.uk I reported on how technology is changing business, political trends, and the latest culture and lifestyle. I have covered the rise of bitcoin and cryptocurrency since 2012 and have charted its emergence as a niche technology into the greatest threat to the established financial system the world has ever seen and the most important new technology since the internet itself. I have worked and written for CityAM, the Financial Times, and the New Statesman, amongst others. Follow me on Twitter @billybambrough or email me on billyATbillybambrough.com.
Disclosure: I occasionally hold some small amount of bitcoin and other cryptocurrencies.