Thoughts on this article?

[floridaman86]

Hayes argued that if BlackRock, which is in "the asset accumulation game," vacuums up all the bitcoin, there will be no more bitcoin transactions and those who secure the bitcoin network in return for fees and newly minted bitcoin, known as miners, "would be unable to afford the energy it costs to secure the network. As a result, they would shut off their machines. Without the miners, the network dies, and bitcoin vanishes."

https://www.forbes.com/sites/digital-assets/2023/12/26/blackrock-will-completely-destroy-bitcoin-shock-price-warning-as-huge-spot-etf-update-suddenly-revealed/

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[philipma1957]

For some the article is behind a pay wall so I pasted it below


https://www.forbes.com/sites/digital-assets/2023/12/26/blackrock-will-completely-destroy-bitcoin-shock-price-warning-as-huge-spot-etf-update-suddenly-revealed/?sh=66a7acc2c2c7

"12/26 update below. This post was originally published on December 24

BitcoinBTC 0.0% has rocketed higher this year, with the bitcoin price surging this month to highs not seen since early 2022—with a China earthquake suddenly appearing on the horizon.

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The bitcoin price touched $45,000 per bitcoin before dropping back slightly, climbing steadily since October as the market braces for a "Biden bailout" in 2024.

Now, after Wall Street giant BlackRock primed the market for a major upheaval, one legendary trader has predicted the world's largest asset manager's looming bitcoin spot exchange-traded fund (ETF) could be about to "completely destroy bitcoin."

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"If ETFs managed by [traditional finance] asset managers are too successful, they will completely destroy bitcoin," bitcoin and crypto trader Arthur Hayes, who cofounded crypto derivatives pioneer BitMex, wrote in a blog post.

Hayes argued that if BlackRock, which is in "the asset accumulation game," vacuums up all the bitcoin, there will be no more bitcoin transactions and those who secure the bitcoin network in return for fees and newly minted bitcoin, known as miners, "would be unable to afford the energy it costs to secure the network. As a result, they would shut off their machines. Without the miners, the network dies, and bitcoin vanishes."

12/26 update: Institutional investors will take a more active interest in the crypto markets next year if a spot bitcoin ETF is approved, the Federal Reserve cuts interest rates and lawmakers finally create some regulatory clarity, according to analysts surveyed by The Block.

"Since late October, there's been a noticeable uptick in institutional activity, largely driven by the anticipation surrounding the potential ETF news expected in January and strategic positioning by clients for this event," Deribit chief commercial officer Luuk Strijers told The Block.

Hayes, who has also predicted China is about to "flood the world with yuan credit," said the death of bitcoin would "create space for another crypto monetary network to grow in its place. This network could just be a reboot of bitcoin or something different that is an improved adaptation of the original bitcoin. Either way, the people will once again have a non-state-controlled monetary asset and financial system."

Hype around BlackRock's bitcoin spot ETF application, widely expected to be given the green light by the U.S. Securities and Exchange Commission (SEC) early in the new year, has fed expectations that a surge of Wall Street cash could be about to rush into bitcoin.

This week, a leak of the confidential discussions between the SEC and executives of the 13 asset managers in the race to get a bitcoin spot ETF to market revealed the SEC has set a December 29 deadline for "final updates" to their applications, it was reported by Reuters.

Two executives told Reuters that the SEC indicated it could approve a "wave" of bitcoin spot ETF applications in the first few business days of 2024 as BlackRock's latest filing shows it's ramping up preparations for approval.

"BlackRock expecting to seed [its bitcoin spot ETF] with $10 million on January 3," Bloomberg Intelligence analyst Eric Balchunas posted to X. "Notable the date and that it is a pretty big bump up from the $100,000 [BlackRock] seeded in October."

Bitcoin and crypto market analysts are predicting a bitcoin price boom if the SEC follows through with the expected approval of the slate of bitcoin spot ETF applications.

"We are expecting the SEC to approve bitcoin spot ETFs in January," Markus Thielen, head of research and strategy at Matrixport, wrote in emailed commentary.

"This should lift bitcoin prices above $50,000 by the end of January 2024. The SEC has responded swiftly and frequently, and after productive meetings between the SEC and ETF issuers, there appears to have been enough progress. BlackRock has met five times and Grayscale four times with the SEC during the last few weeks."




Note I bolded:

"If ETFs managed by [traditional finance] asset managers are too successful, they will completely destroy bitcoin,"



I suppose that it could be a problem, but  "if" is the largest inclusive word in the English language.

So 'if' blackrock sold an unreal amount of these what would happen. Well if they have to back the ETF with a BTC the price could go over $1,000,000 a coin.

I think eventually hodlers would sell off at a high enough price.  Could BlackRock effectively own to much BTC they could, but what is to stop BTC from issuing changes in the

protocol to protect against it. Nothing as BTC is not beholden to BlackRock.

[panganib999]

If blackrock goes so far as to acquire all bitcoins on the market right now including those that are still unmined, the whole industry will collapse but not for the reasons they state. If anything I think the whole industry will do just fine soon as every bitcoin is mined and is acquired by the people, but having one entity, and a capitalistic enterprise for that matter take over the whole bitcoin network will leave bad taste in the mouths of the people, which would mean that we'd either leave the bitcoin industry, or we'd leave crypto for good cause if they could acquire the top dog there's no reason for them to not take over the rest. And while you guys may argue that ETFs are given publicly anyway, so it's not like they are acquiring bitcoin for themselves, it still is going to be the only thing that would pop into the people's minds when they hear about bitcoin ETF, and impressions last in this industry for a long long while.

Miners are gonna do just fine, that's for sure. I don't think the industry would do great if it gets ridden with companies from the outside market taking a stake out of what bitcoin could offer. Judging how we hate centralization in the first place, having someone take over the business is going to be the doom of this industry, but not in the "congestion blah blah" matter.

[OgNasty]

I think this is more of a short term problem than a long term problem. The block reward and rising prices should keep things afloat for a few more cycles. I would agree though that without more on chain usage or much higher fees, at some point a feedback loop of crashing hashrate due to unprofitable conditions is a possibility.

[BenCodie]

There's many ways that this article could be construed.

It could be construed as pre-approval fud, to add some fear to the market and around the ETF decision which has been overly positive to date. It could also be construed as a new reveal of truth, right before an inevitable decision, and may bring people back to the reality of what institutions are really in the game for.

Either way, it will be interesting to see what happens post ETF and what effect these institutions will have on the Bitcoin network. It doesn't seem entirely logical to assume that BlackRock will be capable of vacuuming enough of the Bitcoin supply to make the entire network inactive, that would assume that everyone sells their BTC to them. There are too many of us that wouldn't do this.

What interests me most, is the hint of an adaptation of Bitcoin that will take its place. I know there are some alternatives out there that are also decentralized and have a higher chance of real world adoption, though they haven't yet stood the time test that Bitcoin has.

Intrigued to see the events that soon unfold...

[franky1]

blackrock seeding $10m is them self custody and creating shares to the equivelent of just 230btc
this is 0.0011675% of circulation

yes blackrock will invite agents to buy baskets of coins which will then be locked up and pegged to shares to then offer more shares

but if each basket is ~230btc it will need 100 of baskets to be $1b of shares (23,000btc)
but if each basket is ~230btc it will need 10000 of baskets to be $100b of shares (2.3mill btc)

but they wont accelerate to $100b share management in 1 month. it would take time
the btc price would rise. lets say from $43k to $215k

meaning to manage $100b would only need 460k of coin
ud then think to manage $1tril of share needs 4.6m coins.. you would be wrong again
lets say time moves on and price becomes $1m/btc
to manage $1 trillion of shares would only need 1m btc btc locked up

[PX-Z]

As if everyone would sell that they could aquire all of them or even the most of them.
Even Coinbase doesn't have much or Binance. None of the current exchange have 10% of total supply of bitcoin except for microstrategy who aims only for accumulating or none of these will sell all of their Bitcoin holdings to such institutions to avoid market manipulation. If BlackRock focus on having all of the mined coins it will takes so many years and will result on rocketing of the price.

[franky1]

As if everyone would sell that they could aquire all of them or most of them. Even coinbase doesn't have much or binance. None of the current exchange have 10% of total supply of bitcoin except for microstrategy who aims only for accumulating. If BlackRock focus on having all of the mined coins it will takes so many years and will result on rocketing of the price.

microstrategy does not have 10%
microstrategy only has 130k btc = 0.659%

grayscale has 630k btc =3.19% (locked up in coinbase)

[lionheart78]

Hayes argued that if BlackRock, which is in "the asset accumulation game," vacuums up all the bitcoin, there will be no more bitcoin transactions and those who secure the bitcoin network in return for fees and newly minted bitcoin, known as miners, "would be unable to afford the energy it costs to secure the network. As a result, they would shut off their machines. Without the miners, the network dies, and bitcoin vanishes."

https://www.forbes.com/sites/digital-assets/2023/12/26/blackrock-will-completely-destroy-bitcoin-shock-price-warning-as-huge-spot-etf-update-suddenly-revealed/

There is no way BlackRock will accumulate all Bitcoin. Blackrock is not the only company that capitalizes on Bitcoin investment.  There are also other companies and merchants that want to accumulate and use Bitcoin.  Aside from that Bitcoin is highly traded, and these traders won't let their potential profit be trapped on such a service. Blakcrock may accumulate the majority of Bitcoin through their platform but as I stated, they can't accumulate all these Bitcoins so there is no need to worry about Bitcoin having no transaction.

Besides it would be a breeze for people to have a less congested network as the fee will surely trim down since the competition to get confirmed becomes less.

[boyptc]

We've got already a similar thread that was posted yesterday and I think that it's better to just keep the discussions about this article there.

--> https://bitcointalk.org/index.php?topic=5479265.0

It's already a two page thread where you OP and others can input what you guys think about this what Hayes said.

[Darker45]

Is this realistic or is this more of an exaggeration, probably a result of paranoid thinking? I think this is wrong for many reasons. For one, if BlackRock accumulates all available Bitcoin in the market-- which is not even possible at all-- then the price of Bitcoin would multiply several fold. In which case, why can't miners afford the energy cost of their operations? Mining would even be more profitable.

And it's not as if BlackRock is the only big man in the game. Among traditional finance players that are now entering the market, BlackRock is just one among many. And how about the rest of the crypto giants? Do we expect them to cease operations soon? I don't think so.

Besides, if we're too suspicious of BlackRock, then we shouldn't allow it to accumulate all the Bitcoin. We have the freedom and capacity to hodl.

But common sense would tell us that if this is BlackRock's plan, it might require them more than a trillion dollars. But if the result of their plan is that Bitcoin would die, it would hurt them more than anybody. Are they committing suicide?

[Uhwuchukwu53]

Hayes argued that if BlackRock, which is in "the asset accumulation game," vacuums up all the bitcoin, there will be no more bitcoin transactions and those who secure the bitcoin network in return for fees and newly minted bitcoin, known as miners, "would be unable to afford the energy it costs to secure the network. As a result, they would shut off their machines. Without the miners, the network dies, and bitcoin vanishes."

https://www.forbes.com/sites/digital-assets/2023/12/26/blackrock-will-completely-destroy-bitcoin-shock-price-warning-as-huge-spot-etf-update-suddenly-revealed/

There is no way BlackRock will accumulate all Bitcoin. Blackrock is not the only company that capitalizes on Bitcoin investment.  There are also other companies and merchants that want to accumulate and use Bitcoin.  Aside from that Bitcoin is highly traded, and these traders won't let their potential profit be trapped on such a service. Blakcrock may accumulate the majority of Bitcoin through their platform but as I stated, they can't accumulate all these Bitcoins so there is no need to worry about Bitcoin having no transaction.

Besides it would be a breeze for people to have a less congested network as the fee will surely trim down since the competition to get confirmed becomes less.

Exactly the truth of the matter is Bitcoin has multiple investors and many services blackrock can only be of some impact but may not totally curse harm to Bitcoin many other company which are having hiden interest to invest will soon come up to challenge blackrock, I think they are not far from competition if they do Bitcoin still stand ahead all nothing can overtake

[Aanuoluwatofunmi]

Hayes argued that if BlackRock, which is in "the asset accumulation game," vacuums up all the bitcoin, there will be no more bitcoin transactions and those who secure the bitcoin network in return for fees and newly minted bitcoin, known as miners, "would be unable to afford the energy it costs to secure the network. As a result, they would shut off their machines. Without the miners, the network dies, and bitcoin vanishes."

Easier said than done, we may not really have to believe by everything we get online, some are just meant for other purposes best known to the posters, what I Know is far from the truth is for one entity to be in possession of all bitcoin and then it becomes so centralized, this is not possible, bitcoin is for everyone and the way it's circulation is going is not in the pattern that can take it being centralized, so let's not think towards that direction for now because it's impossible to see that come to pass.