Bitcoin ETFs, Though Attractive For Investors, May Threaten BTC’s Ethos

Many analysts are sure that the introduction of Bitcoin ETFs will endorse investments in the industry, but not everyone is enthusiastic about it. Michael Venturo, co-founder of Toroso Investments, stated:

“If there was a crypto exchange-traded fund [ETF], I would buy it. I would buy it for my clients. But I don’t think it is good for crypto.”

Various crypto commentators believed that 2019 will finally bring about Bitcoin ETFs. However, it is February 2020, and we do not see any ETFs of the kind yet.

The discussions concerning Bitcoin ETFs eventually touched the ethos of BTC itself — decentralization. This way, investors would not necessarily hold any Bitcoin directly; rather, they would own shares of Bitcoin held by a custodian.

On the latest episode of Off The Chain podcast, Venuto explained:

“Crypto’s, part of the original mission, is to get rid of the trusted third party. That is part of why we want a decentralized network. That said, we have this whole group of investors that are waiting to get in until the trusted third party of an ETF and the SEC says it is okay.“

Bitcoin ETFs struggled to pave way for themselves. It is uncertain whether it will be adopted one day, however, arguments regarding caveats of ETFs have been circulating in the crypto community for years. One of these arguments is that ETFs would actually make Bitcoin “hodlers” cash out to traditional funds.

Leaving debates and theories aside, there will always be individuals who will not trade Bitcoin themselves, but may get interested in an ETF.

However, such situation does not make everyone enthusiastic. Anderas Antonopoulos had previously noted that Bitcoin ETFs threaten the fundamental value of P2P money, “where each user is not operating through a custodian but has direct control of their money because they have direct control of their keys.”

The ETF model suggests that decisions will be made by custodians since they hold the keys on behalf of the investors. Though Antonopoulos acknowledged that ETFs will eventually make their way into the market, their impact will be “damaging” for the entire industry.