- BlackRock’s possible Bitcoin spot ETF raises concerns in the crypto community.
- The investment giant wants more control over the forks, which is not surprising.
- Bitcoin is hardly a threat to the global markets but rather a profitable milking cow.
YEREVAN (CoinChapter.com) – The month of June brought the Bitcoin community a
seemingly bullish factor to go along with the 23% price increase – heightened institutional interest. As reported earlier, on June 15, BlackRock, the largest asset manager globally with $9.1 trillion under its wing, filed for a Bitcoin spot ETF, and, rumor has it, Fidelity Investments (over $4 trillion in AUM) will file again also.
Notably, in 2021 BlackRock called Bitcoin an “untested asset” with a “very small market.” However, the flagship crypto has since become a tidbit considering its expanding adoption and undervalued price. It doesn’t take a genius to deduce that Bitcoin is experiencing its foray into “big money” like never before.
But big money often comes with big changes, and the community has been divided on the issue of whether fiat interest is beneficial or not. So, here is a small recap of what the concerns are and if there’s merit to the agitation.
Should the crypto community raise a fuss about BlackRock?
If the small retail investors are the shrimp in the financial ocean, BlackRock is the fleet of supertankers. Larry Fink, its chief executive, is widely considered one of the central players in the global financial markets.
He also has solid connections to the World Economic Forum (WEF). According to a memo from Geneva, Switzerland, Fink joined the WEF Board of Trustees in 2019, and his company is a “policy contributor.” Another “shocker.”
Needless to say, a spot Bitcoin ETF from BlackRock would further increase Bitcoin’s exposure to investor categories that are not keen on crypto. But as far as BlackRock clients are concerned, if Larry offers you an ETF, you take it. Meanwhile, the filing itself raised concerns in the crypto community. The application with the US Securities and exchange commission states the following:
In the event of a hard fork of the Bitcoin network, the Sponsor [Blackrock] will […] use its sole discretion to determine, in good faith, which peer-to-peer network […] is generally accepted as the Bitcoin network and should therefore be considered the appropriate network for the Trust’s purposes.
read the document.
In plain English, it means that in case of the ETF approval, not only will BlackRock have control over a large batch of BTC, but it will also have the right to choose “the side of the fork” in case one occurs. Frankly, it would be naive to expect anything less from the global financial giant.
How will BlackRock circumvent the environmental issue?
Greenpeace, governmental officials, and countless companies have hounded Bitcoin for years because BTC mining leaves a massive carbon footprint. Chris Larsen, the founder of crypto startup Ripple Labs, even lobbied for switching Bitcoin to proof-of-stake consensus in 2022, allegedly to reduce the damage to the environment.
Meanwhile, Larry Fink poses BlackRock as an “environmentally friendly” company. In the latest annual letter to investors, the CEO posed that climate risk is an investment risk. His letter detailed, at length, the very real impact that climate change is already having on markets.
Anyone can see the impact of climate change in the natural disasters in California or Florida, in Pakistan, across Europe and Australia, and in many other places around the world. […] Finance is not immune to these changes. We’re already seeing rising insurance costs in response to shifting weather patterns.
No surprises there. However, this year, the letter contained a small loophole for Bitcoin support. Fink noted that asset managers must NOT be the “environmental police” and instead called for “governments to make policy and enact legislation, not companies.”
Making the issue the government’s problem, rather than his own, is seen as a bit of a step back from Fink’s 2020 position in which he said that BlackRock’s active portfolios would limit exposure to fossil fuels (specifically coal), amongst other commitments.
What about Bitcoin’s decentralization?
The Bitcoin community takes decentralization very seriously. It’s one of the features that sets the flagship crypto aside from most altcoins. As a part of the “blockchain trilemma,” decentralization comes with a set of challenges. However, whales also present a hefty obstruction to the idea of “community money.”
Large entities, individuals, and corporations stash away large pieces of the pie precisely to gain more control of the market. Thus, BlackRock’s actions should not surprise the community. For example, MicroStrategy, a business intelligence firm, is famously one of the largest Bitcoin holders on the market with 140,000 BTC, approximately 0.7% of the total amount of Bitcoins that will ever be created.
The fact that MicroStrategy’s chief Michael Saylor has a mind-numbingly firm belief in BTC’s 100x future shouldn’t be a feature. He’s a whale, and whales hurt decentralization regardless of their intentions. Thus, if you let a super wolf, like BlackRock, into the henhouse, don’t expect them to play nice.
Conspiracy theories, such as “BlackRock aims to destroy Bitcoin,” are not well founded. The most logical conclusion is BlackRock WANTS TO MAKE MORE MONEY. And it will continue to make more money wherever it smells revenue.
And Bitcoin will continue to provide that revenue for the clients as long as it is relevant and sought-after. Plus, BTC currently trades at nearly 60% below its $69,000 peak, making it a potential milking cow in the uncertainty of the fiat markets.
Are fiat giants happy about Bitcoin on the scene? Not really. Are they teary-eyed about the community and values behind blockchain technology? Certainly not. And the majority of BTC holders aren’t either, by the way. Would the SEC rather have government-controlled CBDCs? Heck yes.
But it is what it is. If the Bitcoin community wants the world to treat Bitcoin as money, it should be ready for exactly that. In the “champion’s league” of finance, money is there to make more money, and Bitcoin is hardly a threat to that. BlackRock is not out to get Bitcoin. It is out to make more cash and uses Bitcoin as one of the many tools to achieve that goal.
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