• BitMEX founder Arthur Hayes believes that traditional finance giants, such as BlackRock, are planning to take over the Bitcoin and crypto industry.
• He thinks they will offer crypto ETFs or similar products to investors in exchange for fiat cash.
• Hayes believes banks and asset managers could use regulations to trap investors within their corporate banking architecture.
Traditional Finance’s Takeover of Bitcoin and Crypto
BitMEX founder Arthur Hayes believes that traditional finance (TradFi) giants, such as BlackRock, are planning a subtle takeover of the Bitcoin (BTC) and crypto industries. He argues that legacy financial institutions see this bear market as an opportunity to corner much of Bitcoin’s consensus network, as well as the mining industry. Banks and asset managers may also use regulations to trap investors within their corporate banking architecture by restricting in-kind redemptions of crypto products or forcing them to convert to fiat currency every time they want to withdraw or transfer.
Crypto Exchange-Traded Funds (ETFs)
Hayes predicts that 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 can charge high fees because they will be the only way for investors to easily sell fiat for a crypto financial return. Hayes notes that if cryptocurrency has a larger monetary systemic impact than the Eurodollar market in coming decades, then TradFi can recoup their losses due to unfavorable banking regulations by becoming the gatekeepers for their multi-trillion-dollar deposit bases.
Impact on Crypto Ecosystem
The BitMEX founder raises concerns about how this takeover could affect the ethos of Satoshi Nakamoto’s original vision – decentralization – if large amounts of money are parked in financial products firmly within TradFi’s system. He questions what kind of impact an asset manager like BlackRock would have on blockchain proposals related to privacy or censorship resistance, noting that Larry Fink’s business is based on centralizing assets at BlackRock.
Reason Behind Takeover
Hayes points out that legacy financial institutions likely view this bear market as an opportunity since many competing players have died off or gone quiet during this time period. He speculates that these firms understand government pressure is coming down on them regarding deposits, so they are trying to make sure control over cryptocurrency remains with them rather than outside competitors who could offer more favorable terms for customers looking for alternative options from traditional banking services like savings accounts and checking accounts which may be subject to inflationary pressures.
In summary, BitMEX founder Arthur Hayes believes there is now a battle over who owns cryptocurrency between legacy financial institutions wanting control over it versus outside players offering more favorable terms for customers looking for alternatives from traditional banking services subject to inflationary pressures . He worries about what kind of changes may come if large amounts of money get parked in financial products firmly within TradFi’s system and suggests caution when dealing with any ETF or similar type product offering clients a crypto derivative in exchange for fiat cash.