Arthur Hayes, the founder of the BitMEX crypto exchange, believes the success of the much anticipated Bitcoin exchange-traded funds (ETFs) will “completely destroy” the leading digital network.
In a recent blog post titled “Expression,” Hayes opined that Bitcoin could die if all the BTC in circulation end up in the hands of traditional finance asset managers, most of whom are vying for the ETFs.
Destroying Bitcoin
Hayes explained that his prediction is based on the difference between Bitcoin and every other monetary instrument humanity has ever used. Monetary assets like gold and fiat exist physically due to natural laws, unlike BTC, which exists only if it moves.
After Bitcoin reaches block 2140, rewards will become zero, and miners will only earn fees for validating transactions. This means miners can only receive income if the Bitcoin network is used. In a situation where there are no more Bitcoin transactions, miners will be unable to afford energy costs, which would lead to shutting off their machines and then the death of the network.
Traditional asset managers like BlackRock, which have filed applications with the U.S. Securities and Exchange Commission (SEC) for spot Bitcoin ETFs, are accumulating the leading digital asset in preparation for the product launch. Hayes said they intend to store the bitcoins in a “metaphorical vault,” issue a tradable security, and charge a management fee for their services, failing to use the assets they hold on behalf of their clients.
Another State-Controlled Financial Asset
The BitMEX founder envisioned a future where the largest Western and Chinese asset managers hold all the BTC in circulation. He explained that such a situation would be possible as investors confuse a financial asset with a store of value, opting to purchase Bitcoin ETF derivatives instead of BTC itself.
As soon as a handful of firms hold all the BTC, there will be no actual use for the blockchain, and the coins will never move again. Miners will turn off their machines, Bitcoin will become another state-controlled financial asset, and it will die because it is not being used.
On the brighter side, the death of Bitcoin could lead to the creation of a new crypto network, which would become a non-state-controlled monetary asset.
“Hopefully, the second time around, we will learn not to hand our private keys to the baldies,” Hayes said.
Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).
The post appeared first on CryptoPotato
