On Cointelegraph, in a recent opinion piece "Bitcoin ETFs: Even worse for crypto than central exchanges" the author argues that Bitcoin ETFs would be detrimental to the cryptocurrency. I however, respectfully disagree, as I fear that the writer seems to overlook some fundamental aspects of how Bitcoin works.
The article suggests that an influx of "paper bitcoins" through ETFs could suppress the price of Bitcoin.
If Bitcoin ETFs become the dominant way of investing in Bitcoin, it could very well lead to millions of paper Bitcoin flooding the market, suppressing the price of Bitcoin.
I for one think it's more important to remember that these so-called "paper bitcoins" are but derivatives, investment products linked to the price of Bitcoin, and not the actual cryptocurrency itself. The finite supply of 21 million bitcoins means that their value will ultimately be determined by the demand for and scarcity of the real bitcoins.
Furthermore, even if the price were temporarily suppressed by the presence of ETFs, it would likely benefit those who recognize the long-term value of holding actual bitcoins. It's worth noting that investing in an ETF is a choice, and individuals always have the option to purchase Bitcoin on exchanges and securely store it in a hardware wallet.
Rather than fearing these concerns or engaging in doomsday prophecies, I believe it is more prudent to embrace the opportunity presented by ETFs. Let those who prefer trading paper stocks or derivatives do so, while those who understand the underlying value of Bitcoin can acquire it at potentially discounted prices. This approach allows individuals to take advantage of any short-term market fluctuations caused by ETFs or similar instruments.
In conclusion, I encourage everyone not to dismiss the potential benefits and opportunities that ETFs might offer for Bitcoin. Stay informed, and take a personal responsibility for securing some real bitcoins. That's how we can keep engaged with Bitcoin on our own terms.
And to end the post, here's a photo of a Common goldeneye (Bucephala clangula):
Thank you for reading!