BitMEX founder Arthur Hayes says that the giants of traditional finance (TradFi) are planning a subtle takeover of the Bitcoin (BTC) and crypto industries.
In a new blog post, Hayes says that there is now a battle as to who “owns” crypto, with legacy financial institutions circling the industry in the depths of the bear market after many crypto firms have died off.
“What I’m trying to say is that crypto itself was never the problem – this issue is who owns it. Does it make sense now why banks and asset managers all of a sudden warmed up to crypto as soon as their competition was deaded?
They know the government is coming for their deposit base, and they need to make sure that the only available antidote to inflation, crypto, is under their control. TradFi banks and asset managers will offer crypto exchange-traded funds (ETF) or similar type managed products that give the client a crypto derivative in exchange for fiat cash.
The fund managers get to charge egregious fees because they are the only game in town that allows investors to easily sell fiat for a crypto financial return. If crypto in the coming decades can have a larger monetary systemic impact than the Eurodollar market, then TradFi can more than recoup their losses due to unfavorable banking regulations. They do this by becoming the crypto gatekeepers for their multi-trillion-dollar deposit bases.”
Hayes says that banks and regulators could agree to restrict in-kind redemptions of crypto products, or force them to convert to fiat currency every time they want to withdraw or transfer, more or less trapping them within the corporate banking architecture.
The crypto billionaire says that BlackRock, the largest asset manager in the world, will likely attempt to corner much of Bitcoin’s consensus network, as well as the mining industry.
“The more philosophical question is whether we can retain the ethos of Lord Satoshi when the industry is flooded with possibly trillions of dollars parked in financial products firmly within the fiat TradFi system. Larry Fink doesn’t give two f**ks about decentralization. His business is based on centralizing assets at BlackRock.
What impact would an asset manager like BlackRock have on Bitcoin Improvement Proposals that, for example, increased privacy or censorship-resistance? BlackRock, Vanguard, Fidelity, etc. will rush to offer ETFs that track an index of publicly listed crypto mining firms. Very quickly, miners will discover that these mega asset managers will control large voting blocks of their stock and will affect management decisions.”
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