Bitcoin ETF: The VIP Party Only

This week was pretty rough for crypto. Basically, since the last Friday half of the news was about extended wake for the bitcoin that was desperately trying to claw his way out of the grave. Which was dug out by its very investors that started panic selling while screaming lines from one iconic sci-fi movie from the late 80s. As a result of this - “digital gold” decided to live up to the Jeff DeGRAFF prediction.

But all of a sudden - everything has changed. Almost like a Jesus, Chicago board options exchange CEO Chris Concannon voiced his cautious hope on the positive outcome of their ETF application. That sparkled modest growth and series of traditional trader joke about bulls that come after the bears and memes, All because of the Mr. Concannon’s hope that they CBOE will be able to “reach” bitcoin ETF faster than the rest of exchanges.

But it’s not anything special for the cryptoverse; it’s hardly even a funny fact anymore. Mostly because a certain amount of studies showed that crypto is super prone to the panic buys and selling out of fear mixed with a healthy dosage of crowd psychology. But no one asks one of the stars of the show -  bitcoin itself. Does it needs an ETF? Because let’s face it - after Bitcoin ETF most of the significant cryptocurrencies will be sent with get their own ETFs.

But is it that good? I mean, sure - ETF opens access to the enormous, gigantic market. Results of this will please pretty much everyone who stores money in bitcoin since according to some of the predictions bitcoin price might blew up off the charts. But there is a catch...

Basically, bitcoin ETF will become one big custodial fund with a bitcoin-based account that will be used from for trading. This will lead to the uptick in prices; many investors will be off the grid and crypto assets will be up in prices in general. Because of all those things - cryptoindustry will become even less stable and quite close commodities market, and it is heavily manipulated as it is.

And in the shape of the ETF bitcoin  is going to lose one of its primary qualities. It’s safety - real bitcoin owners are holders of the wallet with the coins on it. All that ETF is offering to the investors is “paper” coins. Sure, it’s easier like this - in this shape it is easier to invest, it helps you to get rid of many issues. But this comes at a price - since with the most of the “headaches” ETF believers are throwing away most of the rights that real bitcoin owners have.

Like choosing coins during fork. A good example of things like that is bitcoin cash and bitcoin classic. But like that - there won’t anything like that, since the choice will belong to the fund manager. All this means that ownership of the crypto is very vague since no one changed the golden rule “If you don’t own the wallet - then you don’t own the crypto.”

After a while, ETF will reach its critical mass and nothing will be able to stop them from manipulating the price or changing the direction of the cryptoverse development.

A recent post in the Andreas ANTONOPULOS blog described that very well - out there; he showed that the very nature of bitcoin would suffer from the ETF and governments, which mostly don’t like crypto all that much, will get far more control than before.

And ANTONOPULOS is not alone in the camp of the ETF-skeptics. Nick SZABO, one of the pioneers in the industry of the smart contracts, is not a fan of ETFs either. In his opinion, despite potential profit, it can harm the ecosystem far more.

And here lies big, almost fundamental issue of polarizing worldviews. Pioneers of the industry want to help crypto to form it’s own, digital economy and by this, it will get rid of its issues. But that will take a lot of time and institutional investors are not going to wait for that - they want everything and right now.

It’s pointless to discuss if ETF will become a reality or not. It’s about a market that is bigger than the world and the fact that majority of the bitcoin investors want to do “to the moon” jump and buy their “lambos” and not build the economy of the future. And it’s almost certain that “marriage” of the ETF and bitcoin will be held at the autumn of this very year, or maybe at the beginning of 2019. But it is entirely possible that the aftermath of that party will be sad.