Spot Bitcoin ETF Poses Existential Threat, Arthur Hayes Warns

Arthur Hayes, the former CEO of BitMEX, has some wise words to share in the volatile world of cryptocurrencies. According to him, if spot Bitcoin exchange-traded funds (ETFs) become extremely popular, they may even destroy the crypto itself.

A prominent figure in the cryptocurrency space, Hayes expressed his worries in a blog post on December 23. He highlights the inherent worth of Bitcoin, which stems from its ever-changing character. But according to Hayes, the real danger is coming from spot ETFs that are meant to take in assets and store them in a vault.

If these ETF issuers hoard all of the Bitcoin that is available, pushing investors away from traditional “HODLing” and onto BTC derivatives, then that is exactly how Hayes sees the end of the world. Transactional activity on the network declines in this grim future, and miners are no longer motivated to validate transactions.

“Expression” is my last article of 2024. I offer some thoughts on expressions of the #crypto investment theme that will ultimately prove to be worthless.

May the Pump be with you!https://t.co/bG4ZnSjYu5 pic.twitter.com/nbru6yZlJD

— Arthur Hayes (@CryptoHayes) December 23, 2023

As the miners’ ability to pay for energy expenses increased, Hayes warned that they would eventually have to shut down their equipment. The result is that Bitcoin disappears into cyberspace and the network crumbles.

Despite this gloomy forecast, Hayes believes there is a chance for Bitcoin to rise from the ashes. He believes that a new cryptocurrency monetary network might go beyond the initial idea of Satoshi Nakamoto and offer a decentralized financial system independent of conventional financial institutions.

BTCUSD trading at $43,262 on the 24-hour chart: TradingView.com

The possible approval of multiple spot Bitcoin ETF applications, anticipated to occur between January 5 and January 10, 2024, comes before Hayes’ contemplations. Industry titans like Fidelity, BlackRock, Grayscale, and others are waiting for the SEC’s ruling, which may either lead to top crypto’s downfall or indicate a paradigm change.

New Arthur Hayes article dropped. ETFs could kill bitcoin.
The price of bitcoin is unlikely to keep increasing enough to sustain miners alone. This has always been the case but the remedy was that transaction fees would provide miners the revenue. pic.twitter.com/rn7V5hEv2F

— HellB (@Crypto_Hellboy) December 24, 2023

In a related development, the price of Bitcoin has increased dramatically this year, hitting $45,000 per unit. However, a lurking threat emerges amid this upsurge in the shape of BlackRock’s upcoming BTC spot ETF. Arthur Hayes sounds the warning, claiming that its demise may be imminent if these ETFs become successful.

Hayes Warns Of Bitcoin’s Potential Downfall At The Hands Of BlackRock

According to Hayes, if BlackRock buys up every Bitcoin in circulation out of a desire to amass as much wealth as possible, then transactions would decline and miners won’t be able to make a living off of maintaining the network. Hayes predicts that Bitcoin would die in this catastrophic scenario, giving rise to a new cryptocurrency monetary network.

Reportedly, the SEC may approve BlackRock’s Bitcoin spot ETF, as interest in the product grows. There could be a decision in the first few days of 2024, according to recently disclosed private conversations.

The crypto world is at a crossroads, divided between the dangers predicted by individuals who have spent a considerable amount of time navigating its turbulent waters and the promise of institutional investment.

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