- Bitcoin ETFs have caused the asset to surge and brought it closer to traditional finance.
- However, that jeopardises Bitcoinâs original mission, warns Jim Bianco.
- He echoed concerns raised by Arthur Hayes.
The Wall Street creep puts Bitcoin at risk of losing its soul, according to Jim Bianco, president of Bianco Research.
Rather than realising founder Satoshi Nakamotoâs vision of creating an alternative financial system, Bitcoin is failing to differentiate itself from financial players and is actively becoming like them, Bianco said in a segment of the Schwab Network on Monday.
âWhen you start losing focus and start going towards [fear of missing out] into an orange poker chip like the spot Bitcoin ETF, then I feel like weâve lost the narrative,â said Bianco, a macro strategist who has worked at Wall Street firms.
The comments from Bianco, who has called the January launch of the 10 spot Bitcoin exchange-traded funds a âgiant mistake,â highlight how crypto is meshing into traditional finance.
Stay ahead of the game with our weekly newsletters
ETFs have been a key driver behind Bitcoinâs 57% surge in 2024 as institutions including Goldman Sachs, JPMorgan, Standard Chartered, PayPal, and Revolut muscle into the space.
âIâm very worriedâ
Bianco criticised ETFs for contributing to higher correlations between traditional assets and cryptocurrencies and for deviating from Bitcoinâs original value proposition.
âTheyâre literally not hiding the ball,â Bianco said. âTheyâre saying every boomer is going to call its wealth manager and FOMO into this thing at $90,000 and $100,000 and take it to $150,000.â
âIf thatâs what you think is going to cause Bitcoin to go to $150,000, Iâm very worried.â
Join the community to get our latest stories and updates
âCompletely destroy Bitcoinâ
Bianco is not alone in voicing concerns about spot Bitcoin ETFs.
In December, BitMEX co-founder Arthur Hayes warned that ETFs run by the likes of of BlackRock could âcompletely destroy Bitcoin.â
The problem, Hayes said, is that financial giantsâ ETFs âvacuum up assets, store them in a metaphorical vault, issue a tradable security, and charge a management fee for their âhard work.ââ
If Bitcoin are stored and not used, that would mean miners that maintain the blockchain wonât be rewarded with transaction fees, which Hayes argued may jeopardise their ability to stay afloat.
Crypto market movers
- Bitcoin rose by 0.2% in the past 24 hours and is trading at $66,095.
- Ethereum dropped 1.5% to $3,166.
What weâre reading
Sebastian Sinclair is a markets correspondent for DL News. Have a tip? Contact Seb at sebastian@dlnews.com.