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 in addition concentrating BTC possession, permitting for higher value manipulation (boooo!).

Full Story

“Everybody has a value.”

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

If there’re extra patrons than sellers, the value goes up in an try to persuade holders to promote.

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

As of this writing, the US Bitcoin Alternate 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 in all probability going to extend — resulting in a provide crunch, the place the value shoots up in an try to sway long-term holders into promoting their BTC.

These are the advantages of the Bitcoin ETFs…

The darkish aspect 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 ‘large canine’ funding companies.

That sort of focus places numerous energy within the fingers of some.

That means they will:

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

Excellent news/dangerous information?

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

So in some ways, it’s enterprise as ordinary — simply with increased costs.

(Hooray? ¯_(ツ)_/¯)