Institutional adoption, good or bad for btc long-term?

[Sioni]

The reason I ask this question is because I met a guy on another forum cussing and cursing about bitcoin now been in the hand of a lot of institution and government and how btc is going to zero later and will die-off, I read on and on as he went on to highlight some solid points which led me to asking this question here. Well even though I feel he was a little bit over the board in his opinion, I also sat down and thought about it really; what are the implications of institution and government adoption and is this gonna be good for btc in the long-run even though all seems very well and good now.

Here's my thought for now:

Looking at things on the plus side: more institutions entering the space means greater legitimacy, deeper liquidity, and smoother infrastructure. Spot Bitcoin ETFs, corporate treasuries holding BTC, and clearer regulation all make it simpler and safer for big money to flow in. Infact I believe this mitigates against volatility and help build a sturdier price floor.

But on the flip side, I feel institutional dominance could also lead to centralization and reduce the decentralization ideals that attract many to crypto. Also, more regulation might squeeze out innovation eventually if it is too restrictive.

I am still brooding over the question but I feel I should drop it here and hear more opinions from other bright minds, please let me know what you think.

[Hazink]

​Institutional investors coming into crypto are just going to help adoption spread even more and push price faster to reach somewhere than how it could have naturally moved.

Looking at things on the plus side: more institutions entering the space means greater legitimacy, deeper liquidity, and smoother infrastructure. Spot Bitcoin ETFs, corporate treasuries holding BTC, and clearer regulation all make it simpler and safer for big money to flow in. Infact I believe this mitigates against volatility and help build a sturdier price floor.

I don't think so, with their funds on the market, they can even do more harm by holding larger amounts. Institutional investors and governments using bitcoin as reserve can take the price to the top, which is based on the law of demand, but you see keeping the price stable or mitigate against volatility as you put it is not going to work as bitcoin is traded in the open market where everyone is allowed to bid for price which they want to buy or sell.

But on the flip side, I feel institutional dominance could also lead to centralization and reduce the decentralization ideals that attract many to crypto. Also, more regulation might squeeze out innovation eventually if it is too restrictive.

Worst case scenario: they can only use the large number they hold to manipulate the market, but since bitcoin is censorship-resistant, I don't see them killing its decentralization. They can also go as far as making it hard for anyone who doesn't acquire their bitcoin through any centralized means to spend, but the chances making the technology its self centralized is very slim.

[retaur]

If they could centralise it they'd probably have done it already.

Just earlier I was thinking about how the coin/project SUI was a team that were laid off by Meta because they discontinued research into making their own cryptocurrency. If one of the largest tech firms is going to do that - I can see no reason a large holding firm/investment firm is going to take the risk and try to manipulate developers or force their development in a specific direction.

A lot of things that happen in Bitcoin and other coins are done publicly, if there's too much centralised control over one coin it'll either be forked into a decentralised one or dumped. Look at the crash about a week ago, nothings stopping weak hands from leaving and nothings stopping market makers from inheriting their sentiment and making it worse...

I'm sure one day we'll have a crypto corruption scandal on our hands from somewhere (again) but maybe it will be like the others and the scammers realise people are easier and more reliable to target than a protocol (unless a repeat of the Terra-Luna depeg event happens).

[Ambatman]

Looking at things on the plus side: more institutions entering the space means greater legitimacy, deeper liquidity, and smoother infrastructure. Spot Bitcoin ETFs, corporate treasuries holding BTC, and clearer regulation all make it simpler and safer for big money to flow in.

More Regulation
Stricter KYC
More AML compliance
More deviation from what Bitcoin is.

I feel institutional dominance could also lead to centralization and reduce the decentralization ideals that attract many to crypto.

Even if institutions gain Bitcoin quantity centralization
Bitcoin in it's protocol is still decentralized
And if I may add, Decentralization attracts people to Bitcoin not crypto.

Institutional adoption, good or bad for btc long-term?

No, majority still prefers custodial or banks
They are attracted to Bitcoin because it's the hot cake.
Only advantage is faster price increase and so far it has being lackluster.
I know we talk about adoption, but at what cost.

[Darker45]

As with almost everything else, it's neither completely bad or good. It has both good effects and bad effects. It's good in terms of price increase, streamlining adoption, regulatory acceptance, and so on. It's bad because large accumulations in the hands of a few could expose the market to manipulation and instability. Not to mention that these institutions don't even truly subscribe to the philosophy of Bitcoin.

But it's actually pointless to brood over this. This is inevitable. The market is an open market. Anybody can join. We may feel disappointed, but it's something beyond our control.

[CryptoYar]

Getting help from big groups is give annd take where we get huge good things such as more steady prices and big amounts of money and long-life at cost. Bad side is that it can cause control in one place because small number of large companies own big part of Bitcoin, and it gives governments possible way to have power, and chance of too many rules on new ideas. This taking on is seen to be good thing in long run to price and use of Bitcoin since it will make sure money becomes helpful digital item, even though it might involve change of money that is just for big change into ruled item that works inside old money system

[Marvell1]

More importantly, can we prevent governments and institutions from intervening further in this space? Is there any way to stop them? Think about it and that's the heart of the matter. Because if we have no way to stop them from interfering further in the market, then whether we like it or not doesn't matter.

We do not have the right and choice whether to allow organizations and governments to participate in the market or not. So we have to find ways to adapt to every change in the market, or we will be eliminated.

[X-ray]

I think everyone is free to hold bitcoin even if it's centralized entity holding big amount. As long as the blockchain is decentralized, I just don't have any problem.

I honestly think that it's what it takes to have deep liquidity and government acceptance, institutional lobby are no joke.

Sure there is some disadvantages to this but what can we do? It's free market and usually people with big capital can do whatever they want. It's just how free market works.

[tbct_mt2]

Looking at things on the plus side: more institutions entering the space means greater legitimacy, deeper liquidity, and smoother infrastructure. Spot Bitcoin ETFs, corporate treasuries holding BTC, and clearer regulation all make it simpler and safer for big money to flow in. Infact I believe this mitigates against volatility and help build a sturdier price floor.

But on the flip side, I feel institutional dominance could also lead to centralization and reduce the decentralization ideals that attract many to crypto. Also, more regulation might squeeze out innovation eventually if it is too restrictive.

There are always pros and cons, and you never only have pros without cons and vice versa. Deal with it if you don't like what's coming but let's aware that you can not win against what's coming globally.

You also severely misunderstood about decentralization of Bitcoin. It's in Bitcoin programming development, protocol consensus for any technical upgrades, and its network from Bitcoin blockchain hashrate and Bitcoin full node distributions by Bitcoin users. It's not about bitcoin distributions around the world in institutional investors, governments to small holders.

An overview on changes of bitcoin adresses holding x bitcoins over years with the following chart.
https://www.bitcoinmagazinepro.com/charts/addresses-holding-x-btc-by-year/

[Fiatless]

But on the flip side, I feel institutional dominance could also lead to centralization and reduce the decentralization ideals that attract many to crypto. Also, more regulation might squeeze out innovation eventually if it is too restrictive.

I am still brooding over the question but I feel I should drop it here and hear more opinions from other bright minds, please let me know what you think.

I don't like discussing the impact of institutional involvement because there is little we can do about it. Everybody is free to use Bitcoin the way they want. However, government policies are the main tool of centralisation. Even without institutional investment, the government have been making laws to regulate the Bitcoin industry. But it is not possible to control Bitcoin because the system is decentralised. I wouldn't say it's good or bad because everything that has merit also has disadvantages. 

[casey15]

But on the flip side, I feel institutional dominance could also lead to centralization and reduce the decentralization ideals that attract many to crypto. Also, more regulation might squeeze out innovation eventually if it is too restrictive.

Bitcoin will always stay decentralized.. the only thing that can be done is manipulation... They can manipulate the market with their high amount of Bitcoin, but they cannot really control.it...they can only spend what they have and what next?.. they can't simply go and make more for themselves.