According to BitMEX’s creator Arthur Hayes, the conventional financial (TradFi) industry’s heavy hitters are plotting a covert takeover of the Bitcoin (BTC) and cryptocurrency markets.
After numerous crypto enterprises have died off during the bear market, Hayes writes in a recent blog post that there is now a war over who “owns” crypto, with conventional financial institutions surrounding the sector.
The issue has never been the nature of cryptographic technology; rather, it has always been the question of who controls it. Does it make sense that banks and asset managers suddenly become interested in cryptocurrency once their rivals are eliminated?
They anticipate government action against their deposit base and thus want to maintain control of cryptocurrency as the sole known hedge against inflation. Banks and asset managers providing TradFi services would likely sell cryptocurrency derivatives such as crypto exchange-traded funds (ETFs) or similar managed products to clients in return for fiat currency.
Because they are the sole option for investors looking to convert their fiat currency into cryptocurrency, fund managers may demand exorbitant fees. TradFi will be able to repay their losses from adverse banking laws and then some if, in the next decades, crypto can have a higher monetary systemic influence than the Eurodollar market. In order to protect their multi-trillion dollar deposit bases, they have become crypto gatekeepers.
Hayes argues that banks and regulators might agree to limit in-kind redemptions of crypto goods or require conversion to fiat money whenever a withdrawal or transfer is requested, thereby isolating cryptocurrencies inside the confines of the corporate banking infrastructure.
According to the crypto millionaire, the biggest money manager in the world, BlackRock, plans to try to control a significant portion of Bitcoin’s consensus network and the mining business.
When the sector is saturated with potentially billions of money parked in financial instruments firmly inside the fiat TradFi system, the deeper philosophical concern is whether we can keep the spirit of Lord Satoshi. When it comes to decentralization, Larry Fink doesn’t care a rat’s behind. His company’s foundation is BlackRock’s centralization of assets.
How may an institutional investor like BlackRock react to proposals to make Bitcoin even more private or resistant to censorship? Mutual fund giants like BlackRock, Vanguard, and Fidelity will be among the first to launch exchange-traded funds that follow a cryptocurrency mining index. Miners will rapidly learn that these giant asset managers hold significant shares of their company’s voting stock and may exert influence over management.
