BTC spot ETF: Wall Street's Trojan horse

[KryptoBull]

Since 2017, we have heard about the concept of tokenization - bringing real-world assets on-chain, simply put, wrapping information of real assets into tokens for easy exchange and trading, increasing the liquidity of that asset ^[1]. The potential of tokenization has attracted the attention of giants in the traditional economy such as JPMorgan and BlackRock ^[2], and has created the Real World Asset (RWA) trend in the crypto market ^[3]. We used to think about tokenizing securities so that people can trade securities more easily.

However, contrary to expectations of tokenizing securities, we have just witnessed the securitizing token with the launch of the BTC spot ETF in January ^[4]. The BTC spot ETF makes it easy for traditional investors to buy securities from ETF providers instead of directly buying and storing BTC themselves. The BTC spot ETF has brought tens of billions of USD from traditional investors into the crypto market and has boosted the  BTC price, even though BTC purchases for ETF providers are still only taking place on the OTC market. BTC price increases, the crypto market grows, and crypto investors are happy to make a profit.

Larry Fink, CEO of BlackRock, once said: "ETFs are step one in the technological revolution in the financial markets. Step two is going to be the tokenization of every financial asset" ^[5], but I think of another case: if in the future, most securities can be tokenized, then BTC spot ETF can also be tokenized, meaning that we will see a crazy value chain: value (energy) => tokenization (BTC) => securitization (BTC spot ETF: IBIT, FBTC, HODL...) => tokenization (BTC spot ETF token: IBIT token, FBTC token, HODL token...).

Of course, I am not talking about this cycle in a nonchalant way, the fact that tokens are becoming tokens again shows that something is wrong. While we are planning to "infect" the stock market with crypto by tokenizing securities, the largest traditional financial companies have successfully "infected" the crypto market with securities by BTC spot ETF. It is noteworthy that many investors in the crypto market are happy to consider BTC spot ETF as a maturity of BTC. Personally, I see BTC as a step for the stock market to penetrate the crypto market, making investors tend to buy BTC spot ETF instead of learning blockchain technology and self-custodying BTC. Maybe, BTC Spot ETF is just Wall Street's Trojan horse!

I would like to know your opinion on this issue:

• Do you support securitization or tokenization?
• BTC spot ETF is the maturity or degeneration of BTC?
• Does BTC spot ETF have any negative impact on BTC and the crypto market?

References:
[1] Tokenization: Real World Assets, Real World Benefits
[2] JPMorgan debuts tokenization platform, BlackRock among key clients: Report
[3] The Rise of Real World Asset Tokenization (RWA): Unlocking Asset Liquidity
[4] Spot Bitcoin ETFs Explained: Everything You Need to Know
[5] BlackRock’s Larry Fink says bitcoin ETFs are just the first step in the technological revolution of finance
Note:

• My opinion has been presented in a topic, on BitcoinTalk forum.
• This topic on AltcoinsTalks forum has included a minor change in the way my opinion is presented.
• This statement is to avoid accusations of plagiarism.

[SamReomo]

• Do you support securitization or tokenization?

Yes, there's nothing wrong in tokenization if it brings more capital in the market, but if it's used in a negative way then it won't be a good thing. So my answer of this question is that if tokenization is for benefit of crypto community then I will support it otherwise I won't support it.

• BTC spot ETF is the maturity or degeneration of BTC?

In someway it brings maturity because new investors are coming to the market only because of those spot ETFs but I still believe that those ETFs are taking our control over Bitcoin. Because of those ETFs, very few investors will be able to own Bitcoin because those EFT companies will slowly buy all available Bitcoin.

• Does BTC spot ETF have any negative impact on BTC and the crypto market?

Yes, it has very bad impact of BTC because the ETF companies are purchasing Bitcoin in bulk overtime it will be scarce in no time and the investors who learn about Bitcoin won't be able to own Bitcoin themselves and thus they'll have to rely on ETFs instead of having their own bitcoins in their personal wallets.

[Charles-Tim]

BTC spot ETF is the maturity or degeneration of BTC?

I do not see it as any of these. If there is no bitcoin ETF, bitcoin will survive and the adoption will continue. Bitcoin ETF is not a degeneration of bitcoin because it does not stop people not to buy the real bitcoin and I do not see how it will negatively contribute to bitcoin adoption.

Does BTC spot ETF have any negative impact on BTC and the crypto market?

It has a positive impact as it make it possible for people that are in traditional market to buy bitcoin, although it is indirectly and also supporting centralization but those exchanges are centralized and also there are altcoins that their prices are pegged with bitcoin price just similarly like spot ETF.

[TomPluz]

Here is my take on this matter...at the time when we see how ETFs become a driving force for the demand and price of Bitcoin to go up producing profits for stakeholders whether directly holding the said asset or investing with an ETF platform.

1. Do you support securitization or tokenization?
Yes, I am supporting this movement as this can free up more capital to many businesses or organizations that can be in dire need of capital injections plus this can be democratizing access to more investment choices but because this is still near the inception stage there can be some lack of clarity in this market and there can be those who will take advantage of people's interest for their own bad intentions.

2. BTC spot ETF is the maturity or degeneration of BTC?
There are two ways we can look at this: we can say that BTC has finally arrived as it is now recognized by the mainstream financial system and is considered as a real asset alongside gold, stocks and other forms of investment vehicles or on the other hand, this can also mean that the Bitcoin market is now subject to the hands of the few who might try to manipulate the market. Let's see how things will be on this aspect as years go by.

3. Does BTC spot ETF have any negative impact on BTC and the crypto market?
Right now, Bitcoin is reaping the many benefits of the ETF with the significant rise in demand and of course the corresponding increase of its price...but looking into the future we don't know what can be as there can be a big chance that eventually Bitcoin can stabilized and its growth can be controlled...now whether that can be good news or not depends on how a person view things. With ETF, this is a major historical landmark for Bitcoin and I am not yet judging on how things can be as it can be so risky to do so.

[MrSpasybo]

Of course, I am not talking about this cycle in a nonchalant way, the fact that tokens are becoming tokens again shows that something is wrong. While we are planning to "infect" the stock market with crypto by tokenizing securities, the largest traditional financial companies have successfully "infected" the crypto market with securities by BTC spot ETF. It is noteworthy that many investors in the crypto market are happy to consider BTC spot ETF as a maturity of BTC. Personally, I see BTC as a step for the stock market to penetrate the crypto market, making investors tend to buy BTC spot ETF instead of learning blockchain technology and self-custodying BTC. Maybe, BTC Spot ETF is just Wall Street's Trojan horse!

I would like to know your opinion on this issue:

• Do you support securitization or tokenization?
• BTC spot ETF is the maturity or degeneration of BTC?
• Does BTC spot ETF have any negative impact on BTC and the crypto market?

We want BTC to be accessible to more users, so we have to accept the participation of large investment funds from Wall Street. They are helping many investors diversify their portfolios into BTC, and bringing BTC closer to investors in the traditional financial market. The positive impact of BTC Spot ETF on BTC price and the crypto market is easy to see, while the negative impact may be a problem that we will need to solve in the future when some instability occurs.

1. Both markets have value for the economy, but I prefer tokenization more, I don't participate in the stock market.

2. BTC Spot ETF can be seen as a maturity in terms of widespread adoption and investor access, but it is a degeneration in the BTC nature of self-custody of assets to not depend on a third party.

3. BTC Spot ETF can cause many investors to abandon crypto to find opportunities with ETF because ETF is a financial instrument that is easier to invest and manage, without having to worry about the security of private keys. BTC Spot ETF is making the process of investing in BTC more centralized.

[>>] BTC Spot ETF is market poison?

[Faisal2202]

Personally, I see BTC as a step for the stock market to penetrate the crypto market, making investors tend to buy BTC spot ETF instead of learning blockchain technology and self-custodying BTC. Maybe, BTC Spot ETF is just Wall Street's Trojan horse!

You are right, this issue has been raised by many people, but IMO, a time will come when these traditional people who are into ETF trading, will prefer to hold BTC on their own, they will learn about blockchain, well I also think they already knew more then the newbies coming into crypto. That's why they have funds in BTC ETFs. Either way, its a win for BTC, as its adoption has increased, value increases consequently. People are making money.

BTW this statement of Larry Fink about tokenization and securities is totally new to me, this really gives a better idea about where the crypto market might move like future perception becomes a little easier. Overall there is no doubt that people not using blockchain technology while buying BTC ETFs are missing the main point. They are just after money.

I would like to know your opinion on this issue:

• Do you support securitization or tokenization?
• BTC spot ETF is the maturity or degeneration of BTC?
• Does BTC spot ETF have any negative impact on BTC and the crypto market?

1. I do support securitization and tokenization as well because they will open new gateways in crypto as a whole, and many employment opportunities will be seen as well.
2. I am neutral on this.
3. Nah, how it can have a negative impact on the BTC market, it might be bad if this whole money from ETF companies will do huge selling or manipulation just to make profits.

[KryptoBull]

Here is my take on this matter...at the time when we see how ETFs become a driving force for the demand and price of Bitcoin to go up producing profits for stakeholders whether directly holding the said asset or investing with an ETF platform.

1. Do you support securitization or tokenization?
Yes, I am supporting this movement as this can free up more capital to many businesses or organizations that can be in dire need of capital injections plus this can be democratizing access to more investment choices but because this is still near the inception stage there can be some lack of clarity in this market and there can be those who will take advantage of people's interest for their own bad intentions.

2. BTC spot ETF is the maturity or degeneration of BTC?
There are two ways we can look at this: we can say that BTC has finally arrived as it is now recognized by the mainstream financial system and is considered as a real asset alongside gold, stocks and other forms of investment vehicles or on the other hand, this can also mean that the Bitcoin market is now subject to the hands of the few who might try to manipulate the market. Let's see how things will be on this aspect as years go by.

3. Does BTC spot ETF have any negative impact on BTC and the crypto market?
Right now, Bitcoin is reaping the many benefits of the ETF with the significant rise in demand and of course the corresponding increase of its price...but looking into the future we don't know what can be as there can be a big chance that eventually Bitcoin can stabilized and its growth can be controlled...now whether that can be good news or not depends on how a person view things. With ETF, this is a major historical landmark for Bitcoin and I am not yet judging on how things can be as it can be so risky to do so.

We are only in the early stages of the uptrend, and we will have a 4-year cycle to assess the impact of the BTC spot ETF on the BTC price and the crypto market. Currently, everything is quite positive: BTC price has increased to the point of creating a new ATH before the halving, and money is flowing into this market, BTC is being promoted and becoming a potential asset. I look forward to more detailed assessments from experts in 2027, after we have both uptrends and downtrends in the crypto market, I still believe that the downtrend will come and we cannot have a super cycle thanks to spot ETFs.

We want BTC to be accessible to more users, so we have to accept the participation of large investment funds from Wall Street. They are helping many investors diversify their portfolios into BTC, and bringing BTC closer to investors in the traditional financial market. The positive impact of BTC Spot ETF on BTC price and the crypto market is easy to see, while the negative impact may be a problem that we will need to solve in the future when some instability occurs.

I am worried that this acceptance brings more risks than benefits, even though we cannot refuse it or prevent these companies from issuing their own BTC ETFs. I hope that I am just being too pessimistic or overly worried about the future of BTC under the impact of spot ETFs. We will have to wait and see if BTC will be promoted and gain more users or if investors will only want to put money into BTC spot ETFs.

[Trongduy]

• Do you support securitization or tokenization?
• BTC spot ETF is the maturity or degeneration of BTC?
• Does BTC spot ETF have any negative impact on BTC and the crypto market?

1. I participate in the crypto market so I support tokenization. The Vietnamese stock market does not have any spot ETF products yet, so I have not experienced it and do not have any opinions on securitization.

2. I think BTC spot ETF is a sign of maturity: it will help BTC price increase, become a top 10 asset, and may even break into the top 5 in the future. It will help BTC gain wider acceptance and boost its value.

3. BTC spot ETF could lead to increased manipulation as more and more large institutions enter the market and seek profit from this young market. Small retail crypto investors will be their prey, and I don't like that. We already have enough sharks and killer whales in this market.

[KryptoBull]

1. I participate in the crypto market so I support tokenization. The Vietnamese stock market does not have any spot ETF products yet, so I have not experienced it and do not have any opinions on securitization.

2. I think BTC spot ETF is a sign of maturity: it will help BTC price increase, become a top 10 asset, and may even break into the top 5 in the future. It will help BTC gain wider acceptance and boost its value.

3. BTC spot ETF could lead to increased manipulation as more and more large institutions enter the market and seek profit from this young market. Small retail crypto investors will be their prey, and I don't like that. We already have enough sharks and killer whales in this market.

For Vietnamese investors, ETFs are not a hot topic right now. Even if they want to access them, it is not easy, or even impossible, because it will be a long time before Vietnam opens up to crypto or has legitimate products on the stock exchange that are pegged to crypto reserves. I want to talk about the big picture issues when the inflow of money from the world's largest financial market, the US, is causing the market to have positive short-term fluctuations but could be dangerous in the long term. Manipulation may not be the scariest thing, as it has always existed with the market, but I am worried about the nature and plans that the bigboys are preparing to take over this crypto market.

[Legion]

I am worried that this acceptance brings more risks than benefits, even though we cannot refuse it or prevent these companies from issuing their own BTC ETFs. I hope that I am just being too pessimistic or overly worried about the future of BTC under the impact of spot ETFs. We will have to wait and see if BTC will be promoted and gain more users or if investors will only want to put money into BTC spot ETFs.

It's true, big investors are used to this and this is what other investors want which makes ETFs no longer that important. There must be good news that can make Bitcoin prices increase again.

[KryptoBull]

It's true, big investors are used to this and this is what other investors want which makes ETFs no longer that important. There must be good news that can make Bitcoin prices increase again.

Currently, spot ETF data is still very important to investors, and net inflows from spot ETFs are also one of the main drivers of the BTC price increase. Currently, we have negative news when the US government just sent BTC to OTC and this selling force may have indirectly affected the market.

We will soon have BTC halving, I think this will be an important driver for the BTC price to continue to grow and conquer 100K in 2024.