What would happen if they accept bitcoin ETFs, could it go down?
Hello friends, if we start to analyze the psychology of the market, it is buy, rumor, sell, news, it is a fundamental that does not improve but worsens the fundamental of bitcoin. A spot Bitcoin ETF makes it possible for more institutional people to get into bitcoin so this would have to be an improvement in the bitcoin market.
After so much thinking and analyzing, I think that for any of you who have been understanding for some time what the philosophy behind bitcoin and its decentralization or pseudo-decentralized is, you already know that bitcoin is not really a decentralized network but rather it is a very distributed network that They are two very different concepts. What we find is that the philosophy and ideology behind bitcoin are going to get worse.
In the end, Bitcoin aims to return authority, autonomy, power to the people and the people are you and I are us, not the state, not the big companies, not the Strong Institutions, not the governments. So I didn't believe that today we have already seen that the large mining companies are all dominated by BlackRock, that is to say that BlackRock is the largest investment fund, which is mainly the United States, it already has the large bitcoin miners, they are no longer removing all the bitcoins that they want and more, that is to say, they have surely been storing bitcoin since time immemorial if this is the case.
But the point is that if the large miners, that is, those who are extracting the bitcoins as a reward for mining the network, if these are the ones behind it, they already have great power over bitcoin. But what happens if they are also going to have all the bitcoins they want to speculate on now or in future years. Obviously they would still have more control over bitcoin and if, for example, we have 21 million bitcoins on the table, in the event that they are all already mined around the year 2,144, what is going to happen is that whoever wants to speculate with bitcoin, whoever wants to invest in bitcoin and If you want to do it with a lot of money, you will go through a bitcoin spot ETF if they end up accepting that it is the safest thing to do.
These are mainly backed by BlackRock and we would have the obligation that when someone buys a bitcoin through this new ETF of this new financial tool they must back that purchase with a spot purchase of bitcoin which in the short term might seem like it should to raise the price of bitcoin because how the order book works, if there is a lot of liquidity coming in and there is no supply that can deal with that demand, obviously we are going to tend to look for higher prices.
However, large institutions have historically bought outside the market, that is, there is no law, there is no rule that tells you that BlackRock is obliged with this new mechanism to buy yes or yes from the market, for example in the binance orderbook where you or I would buy for example, but surely at the end of the day they can make deals with people who want to get rid of large amounts of bitcoin and say I'll sell you this block of bitcoin and they already take inventory. So to speak, they are backing up a large amount of money and when they see that it is They are running out and they buy another block again. All of this is done outside of what the traditional orderbook is.
Therefore, they do not affect the price of bitcoin, many wonder why bitcoin was worth $1 or worth $100 or $1,000 a few years ago simply because there were no centralized exchanges because people bought it with PayPal, they bought it on the Dark Web, they bought it wherever they could. and how could they and in the end it was a hassle to buy this asset. The point is that what we are going to see is how more and more bitcoins end up in the hands of these large institutions such as BlackRock.
Let's take an example if tomorrow I want to buy 1000 bitcoins I will not have 1000 bitcoins in my ledger or cold wallet but I will have 1000 pieces of paper that say that I have 1000 bitcoins in the ledger of our friend BlackRock then they will have the bitcoins that they are already mining with the three large miners plus the bitcoins of all those who want to speculate and that they are the custodians of them. In the end, none of this looks good to me.
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This is an interesting post, let's see how it goes.
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