Early Bitcoin Evangelist Andreas Antonopoulos Says Bitcoin ETF “Damaging To The Ecosystem”
Early Bitcoin (BTC) advocate and long-time evangelist Andreas Antonopoulos believes that a Bitcoin ETF would be damaging to the crypto ecosystem.
The U.S Securities and Exchanges Commission (SEC)’s approval of a Bitcoin ETF would be bad for the cryptocurrency says Andreas M. Antonopoulos, an early Bitcoin evangelist.
In his opinion, such an approval would have far-reaching consequences on the cryptocurrency landscape.
Antonopoulos made the remarks in his “Bitcoin Q&A” video, referring to the topic as one of the hottest at the moment. He says that an ETF would make it easy for investors to undertake financial operations without the need to manage any crypto asset.
“The idea here is to take a reserve of bitcoins and then make them tradable instruments that can be traded on traditional markets like stocks,” Antonopoulos said.
He adds that the service is more of a custodial reserve system. For him, the custodian will hold the real Bitcoins, but what investors get is only a share in the fund. It is not Bitcoin they hold.
He said that this will allow traditional and institutional investors to speculate on BTC prices without owning any bitcoin. These ETF holders will not be required to open an account. They will also not need to keep private keys, or addresses.
A vast majority of the crypto community believe that an approval for a Bitcoin ETF would bring in institutional investors and big money. This move would, in turn, have a tremendous effect on the prices of crypto assets, especially Bitcoin.
However, Antonopoulos maintains that a Bitcoin ETF would be a bad idea, essentially going against cryptocurrency ethos. He states that he knows why many people in the crypto ecosystem want to see a Bitcoin ETF.
It is due to what they perceive as the path to ‘the moon and lambos’.
He says that he thinks the ETF will happen, but even then maintains it is unnecessary and a terrible idea.
“I’m actually against ETFs. I think a Bitcoin ETF is going to be damaging to the ecosystem.”
The SEC has a number of ETF proposals before it that need determination, especially the VanEck/SolidX one. During a Let’s Talk Bitcoin podcast, he expressed the belief that an approval is likely and imminent.
Antonopoulos, who is a member of the Oversight Committee for the Bitcoin Reference Rate at the Chicago Mercantile Exchange (CBOE), notes that the solutions an ETF provides for traditional investors are actually damaging to the Bitcoin ecosystem.
In his August 15 video, he gave a few reasons why he is against approval of a bitcoin exchange-traded fund.
Bitcoin Q&A: Why I’m against ETFs https://t.co/8mQtKJgy0L
— Andreas M. Antonopoulos (@aantonop) August 15, 2018
He tweeted that such an asset would affect principles of decentralization, consensus and to a large extent the price of Bitcoin or such other cryptocurrency that may have an ETF.
He also says that ETFs basically contravene Bitcoin’s principle of peer-to-peer (p2p) money. It erodes that principle that gives users direct control over their money and keys. The exchange-traded fund introduces a custodian, taking away control from the user.
According to him, any major ETFs coming into the market will basically allow institutional investors room to manipulate Bitcoin prices. It could also be an avenue for custodians to wield too much power that can affect major blockchain decisions.
These custodians are likely to be swayed by their own interests, and not those that could benefit the traditional investor
A Bitcoin ETF in itself will not lead to the end of Bitcoin. However, the possibility of global scale manipulation will be harmful.
If debates about issues like scaling lead to forks, these mega-institutions will have a very big say in the outcome of forks.
“Eventually you’re going to see them split off and form their own corporate version of Bitcoin”
While all these things have not and may not happen, it is a chance to engage the crypto community as it awaits the SEC’s decision on Bitcoin ETF applications.