Arthur Hayes: If BlackRock's ETF is too large, it may strangle Bitcoin

ChainCatcher news, according to Blockworks, BitMEX founder Arthur Hayes stated that institutional interest in Bitcoin may "foreshadow a situation we might ultimately not like." He mentioned that the same institutional entities could also launch Bitcoin mining ETFs, adding that "BlackRock is the largest shareholder in some of the biggest mining operations."

Hayes explained that asset management companies like BlackRock are essentially "agents of the state," acting according to the state's directives. In the ETF system, users purchase derivatives with fiat currency. The asset management company buys some Bitcoin and then hands it over to a custodian for safekeeping. Users cannot actually use the Bitcoin; what they acquire is a financial asset rather than Bitcoin itself.

Hayes warned that if the BlackRock ETF grows too large, it could actually stifle Bitcoin, as it would just be a pile of stagnant Bitcoin. He stated that Bitcoin is the antithesis of centralized currency. However, if most of the funds end up being held by one or a few institutions, the consequences could be unimaginable.