BitMEX founder Arthur Hayes says the traditional finance giants (TradFi) are planning a micro-acquisition of the bitcoin (BTC) and cryptocurrency industries.
In a new blog post, Hayes said there is now a battle over who “owns” cryptocurrencies, with legacy financial institutions circling the industry deep in the bear market following the deaths of several cryptocurrency firms.
“What I am trying to say is that cryptocurrencies in and of themselves were never the problem – the problem is who owns them. Does it now make sense why banks and asset managers suddenly warmed up to crypto once the competition stopped?
They know the government is coming for their deposit base, and they need to ensure that the only antidote to inflation available, cryptocurrency, is under their control. TradFi banks and asset managers will offer cryptocurrency exchange-traded funds (ETFs) or similar managed products that give a customer a cryptocurrency derivative in exchange for fiat money.
Fund managers charge exorbitant fees because it is the only game in town that allows investors to easily sell fiat for a cryptocurrency return. If in the coming decades cryptocurrencies can have a greater monetary systemic impact than the Eurodollar market, TradFi can recoup its losses due to unfavorable banking regulations. They do this by becoming cryptocurrency gatekeepers to their multi-trillion dollar deposit bases.
Hayes says banks and regulators could agree to limit in-kind redemptions of cryptocurrency products, or force them to convert to fiat each time they want to withdraw or convert, trapping them more or less within the corporate banking structure.
The crypto billionaire says BlackRock, the world’s largest asset manager, will likely try to monopolize a large portion of the Bitcoin consensus network, as well as the mining industry.
“The more philosophical question is whether we can preserve the spirit of Lord Satoshi when the industry is flooding the trillions of dollars accumulated in financial products forcefully within the TradFi legal system. Larry Fink has no interest in decentralization. His work is based on the centralization of assets in BlackRock.
What impact could an asset manager like BlackRock have on proposals to improve Bitcoin that, for example, increase privacy or resistance to censorship? BlackRock, Vanguard, Fidelity, etc. will be quick to offer ETFs that track the index of listed cryptocurrency miners. Very quickly, miners will discover that these huge asset managers will control large voting blocks of their shares and influence management decisions.
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