The Dark Side of Bitcoin ETFs (and the resulting benefits)

TL;DR

The demand for the Bitcoin ETFs are pushing BTC’s worth up (hoooray!), but additionally concentrating BTC possession, permitting for larger worth manipulation (boooo!).

Full Story

“Everybody has a worth.”

That’s just about the driving issue of Bitcoin’s worth.

If there’re extra patrons than sellers, the worth goes up in an try and persuade holders to promote.

…and if that isn’t profitable? The worth goes up even additional.

As of this writing, the US Bitcoin Change Traded Funds (aka: ETFs, aka: funds that purchase Bitcoin each time somebody buys a share of their fund) personal a whopping 5% of the 21,000,000 Bitcoin provide.

And if US inventory buyers’ urge for food for BTC continues, that’s most likely going to extend — resulting in a provide crunch, the place the worth shoots up in an try and sway long-term holders into promoting their BTC.

These are the advantages of the Bitcoin ETFs…

The darkish aspect of all of it?

These ETFs aren’t being purchased up by a big swath of retail buyers as a lot as they’re a choose few ‘massive canine’ funding corporations.

That type of focus places a whole lot of energy within the fingers of some.

That means they will:

Unload a small portion of their holdings → dump the BTC worth → solely to purchase all of it again (after which some), giving them a good larger share of BTC’s provide.

Excellent news/dangerous information?

This type of manipulation was occurring lengthy earlier than the ETFs have been round…

So in some ways, it’s enterprise as common — simply with increased costs.

(Hooray? ¯_(ツ)_/¯)