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The Dark Side of Bitcoin ETFs (and the resulting benefits)

TL;DR

  • The demand for the Bitcoin ETFs are pushing BTC’s value up (hoooray!), but additionally concentrating BTC possession, permitting for better value manipulation (boooo!).

Full Story

“Everybody has a value.”

That’s just about the driving issue of Bitcoin’s value.

If there’re extra consumers than sellers, the worth goes up in an try and persuade holders to promote.

…and if that isn’t profitable? The worth goes up even additional.

As of this writing, the US Bitcoin Change Traded Funds (aka: ETFs, aka: funds that purchase Bitcoin each time somebody buys a share of their fund) personal a whopping 5% of the 21,000,000 Bitcoin provide.

And if US inventory traders’ urge for food for BTC continues, that’s most likely going to extend — resulting in a provide crunch, the place the worth shoots up in an try and sway long-term holders into promoting their BTC.

These are the advantages of the Bitcoin ETFs…

The darkish facet of all of it?

These ETFs aren’t being purchased up by a big swath of retail traders as a lot as they’re a choose few ‘massive canine’ funding corporations.

That form of focus places rather a lot of energy within the fingers of some.

That means they will:

Unload a small portion of their holdings → dump the BTC value → solely to purchase all of it again (after which some), giving them a fair better share of BTC’s provide.

Excellent news/dangerous information?

This form of manipulation was occurring lengthy earlier than the ETFs had been round…

So in some ways, it’s enterprise as traditional — simply with greater costs.

(Hooray? ¯_(ツ)_/¯)

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