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Although many traders are eagerly awaiting the emergence of Bitcoin ETFs, some advocates of cryptocurrencies are, at best, indifferent to the prospect of such an instrument. The representative of the first group of unconditional enthusiasts of Bitcoin-ETF is, for example, the entrepreneur Jonathan Hamel, who talks about how the approval of Bitcoin-ETF will lead to an "epic" influx of institutional capital into the 39; ecosystem – that is, the flow of "billions" of dollars in the form of new investments.
But if you talk to some of the early users of cryptocurrency and the "veterans" of blockchain technology, you can hear the notes of indifference and even skepticism.
Thus, the founder of the American company Bitcoin Advisory, Pierre Rochard, notes:
"In fact, the ETF model is not that different from a partial bank reservation."
Last week, the US Securities and Exchange Commission postponed the decision on the VanEck and SolidX application until February 27, 2019. This means that we are waiting for another two months, during which users will bite their nails. Of course, this category of unfortunates includes only those who believe that Bitcoin-ETF will become an incentive for Bitcoin and a salvation for the entire cryptocurrency market.
However, the cryptocurrency analyst Nick Bhaktia writes commenting on the work of Bitcoin Investment Trust by Grayscale launched in 2015:
"I do not think that more ETFs can improve Bitcoin liquidity more than the GBTC does."
Although Bhakhtia noted that it still appreciates those approved by the ETF regulator, because their emergence can strengthen the confidence of the masses in this new class of attacks, some veterans of the encryption come to say: the ETF can damage the whole ecosystem. From their point of view, the concept of ETF contradicts the model of a peer-to-peer financial system of assets that are stored by the users themselves.
In particular, the developer of Lightning Labs, Alex Bosworth, comments: "We are talking about a sort of central authority, while Bitcoin's competitive offer lies precisely in its decentralization, global character".
According to Bosworth, the most serious risk associated with a Bitcoin ETF is that their appearance can push institutions to work together to influence the ecosystem. Referring to the unrealized New York deal of 2017 – when leading crypting companies planned to support unpopular updates of the Bitcoin network, despite public outrage, – Bosworth explained:
"We have seen how companies that supply foreign currency deposits are positioned as if they belonged to them and acted on behalf of their clients, even without consulting the last … We do not want centralized structures to change the parameters of the Bitcoin ".
For the same reason, Christopher Allen, former Blockstream chief engineer and cryptocurrant veteran, does not trust the institutes that work to create the regulated Bitcoin-ETF:
"The real reason they need it is simple: Bitcoin-ETF will give them the opportunity to play financial games, increasing the size of the interest rate, compared to what they can afford if there is not such a tool I think the consequences of its occurrence will be numerous: how do we transmit to the people what fiduciary responsibility and custody are? "
Bhaktia agreed that the industry is moving to prioritize its "custodian custody and trust management model", but does not believe that such institutional products will significantly influence "traditional cryptopiques":
"People who are currently storing their bitcoins will not be in a hurry to accept the ETF because they have a different interest."
Other "bitcoin veterans" are retail investors who place high hopes on ETFs, believing that this tool will be able to save falling prices of cryptocurrencies. However, the question is how realistic these hopes are.
According to Rochard, if Bitcoin-ETF will be approved in the near future, it is expected to also get a lower market share than the gold ETFs (estimate that this last instrument represents only 2% of the reserve global gold).
Other experts believe that any price growth stimulator will only have a short-term effect. In November, Ari Paul, head of BlockTower Capital's investment department, offered to remember how the addition of Bitcoin futures stimulated speculation, but a few months later the price came back.
Paul noted: "If ETFs are launched, we should not expect a large influx of large institutional funds, yes, soon after the announcement will start a price rally, but we are not talking about the fact that we suddenly receive $ 50 million from institutional investors: only speculators will raise the price. "
Furthermore, it is important to remember that every euphoria (or, on the contrary, concern) about the Bitcoin-ETF is still of an "academic" nature; in other words, the possible consequences are speculative. On December 5th, SEC Commissioner Hester Peirce suggested that users "do not pull their lips", since the regulator could approve Bitcoin-ETF in a few years.
Even if this happened, Bitcoin supporters are wondering how this structure, within which the fund owns the asset and distributes ownership in the form of actions, will address the problem of a specific cryptocurrency structure. For example, what happens if there is a new fork in the network, similar to the one that caused bitcoin money last year?
Rochard asks:
"They will do it [ETF depository structures] give money to people or become a mutual fund? "I do not think there are precedents here [in the capital markets], since Bitcoin has no legal identity and companies have one ".
Allen emphasizes that issuers of the ETF will have to explain how they plan to maintain and keep track of the bitcoins so that the products that represent this underlying asset are not lent yet and again in a process known as recovery.
According to Caitlin Long, co-founder of the Wyoming Blockchain Coalition, the recovery is in contradiction with the same ethos of Bitcoin, since its stock is limited (21 million units). Therefore, there is no way to help lenders get out if borrowers owe more bitcoins than ETF issuers. However, Gabor Gurbacs, head of VanEck's digital asset management strategy department, said his company's offering will include a cold storage option, regular reports to dispel any doubt about a potential recovery , in addition to a guide in case of bitcoin fork.
What is your personal opinion about Bitcoin ETF?
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