Is the Bitcoin ETF bad for the self determination of Bitcoin?
- An ETF allows mainstream capital to flow into the Bitcoin chain which could allow for pump and dump behavior which influences how Bitcoin forks or doesn't fork.
- Institutional investment could convince others not to buy Bitcoin directly presumably because they no longer have to.
- Market manipulation and theft.
The Bitcoin ETF will, if approved, accelerate investment into Bitcoin at the expense of decentralization. You are unwise to buy into a Bitcoin ETF for anything other than short term speculation as you expose yourself to exactly the systematic risk that Bitcoin was designed to overcome: Fractional reserve, government power and dependency on trust.
The conclusion from the article above is that the Bitcoin ETF could lead to a sort of economic centralization which could lead to centralization of Bitcoin. The conclusion seems to be that the Bitcoin ETF betrays the essence of what Bitcoin is supposed to be about by putting unnecessary dependency on trust in traditional institutions such as the SEC.
My thoughts are the choice is really between increasing legitimacy or sticking to the crypto-anarchist essence. In a way if Bitcoin becomes more legitimate it could raise the legitimacy of other more innovative descendant technologies. On the other hand people might feel that Bitcoin is sacrificing ideological integrity in exchange for legitimacy.
References
1. https://blog.bitcoinhk.org/why-the-bitcoin-etf-is-bad-for-bitcoin-875bf23c8340
The ability of Bitcoin to eliminate the risk of fractional reserve depends entirely on the vigilance of the users. Bitcoin allows us to pressure institutions including an ETF but also exchanges etc to be fully transparent about reserves, more so than with other commodities.
Yet many of the most popular exchanges are not transparent about reserves. It's likely fractional reserve is already happening as a result, and there are more 'imaginary' Bitcoins than the amount on the blockchain. If an ETF is not transparent it could bring Bitcoin to the same place as Gold eventually (hundreds of times more paper gold than physical gold).
Seeing what "THEY" have done with other ETF's I wouldhope it does not get adopted.
I doubt it will be any worse than what we typically experience with whales and formerly from zero-fee mega-leveraged Chinese day traders.
One scenario that occurred to me is that maybe elements in the SEC (i.e. deep State) may favor ETF approval in order to game it, or even hack it, and use that as a rallying cry to ban Bitcoin and all cryptocurrencies as 'unsafe'.