While many are still working to establish the first U.S. approved bitcoin ETF, prominent blockchain and cryptocurrency expert Andreas M. Antonopoulos has recently come out against the idea.
In his popular “Bitcoin Q&A” youtube video blog, Antonopoulos questioned how good an idea an ETF could be for decentralized blockchain systems. An ETF is a custodial service that can offer shares of their funds; meaning for bitcoin, institutional and traditional investors can invest in a bitcoin fund without having to actually hold any bitcoin. As Antonopoulos sees it:
“ETFs fundamentally violate the underlying principle of peer-to-peer 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. Your keys? Your bitcoin. Not your keys? Not your bitcoin. An ETF is a multi-billionaire dollar ‘not your keys, not your bitcoin’ vehicle.”
An ETF would not be the end to bitcoin, in his opinion, but would certainly expose the coin to the effects of centralization. Antonopoulos says “it’s [ETF]…going to cause manipulation of the prices. It is going to cause manipulation of the debates about scaling decisions, and if there are forks it is going to give these parties a very large determining voice in forks. Eventually you’re going to see them split off and form their own corporate version of Bitcoin.”
While an ETF may be associated with an increased prices and trading volumes, such as for gold, these traditional forms of investment may not, ultimately, be as compatible with a decentralized system for peer-to-peer interactions.
Watch the Q&A video here: