Will Bitcoin ETFs become a problem for BTC’s ‘ideology’?

• As per a Bitcoin historian, ETFs are in contrast to BTC’s ideology.
• Amid centralization concerns, ETFs continued to record high volumes.

Despite widespread acclaim, are exchange-traded funds (ETFs) genuinely advantageous for Bitcoin’s [BTC] future? This question looms large in the cryptocurrency community.

In a thought-provoking conversation hosted by Swan Bitcoin, Pete Rizzo, a Bitcoin historian, shed light on this debate. He remarked, 

“It is very interesting to see that there is such community support for the ETFs given that they essentially, in many ways, kind of contradict a lot of the things that we have preached as Bitcoin maximalists.” 

Rizzo also emphasized that the push for self-custody and direct participation in the Bitcoin network starkly contrasts the passive, intermediary-reliant nature of ETF investments.

Is Wall Street attention bad for Bitcoin?

Delving deeper into the institutional involvement in Bitcoin, Rizzo expressed apprehensions about the potential for regulatory capture.

Given their extensive holdings, the historian showed concerns about the unclear motivations behind institutional forays into cryptocurrency.  He commented,

“I still remain pretty skeptical of what’s going on on Wall Street and with the institutions. I mean, obviously, it’s great that they’re dipping their foot in, but I don’t think we should confuse that with them sort of agreeing completely with our ideology.”

Based on the current demand, he hypothesized that BlackRock’s venture into Bitcoin ETFs could be just the beginning of a series of similar financial products to capitalize on the burgeoning interest in cryptocurrency.

ETFs: A gateway to Bitcoin adoption

Amid the skepticism, the interview touched upon the compelling argument to be made for their positive impact on BTC’s adoption and mainstream acceptance. Rizzo agreed, saying,

 “I think, look, you got to start somewhere, and I think any exposure to Bitcoin is ultimately good.”

AMBCrypto has reported numerous times on how ETFs have contributed to the increased adoption of BTC. This development has introduced substantial buying pressure, creating a notable supply shock.

Interestingly, many are increasingly considering BTC as a vital element of their retirement planning strategy, reflecting a broader recognition of its value as a traditional financial instrument.

ETFs continue to shatter records

Meanwhile, ETFs continue to exceed expectations, surpassing the high anticipation surrounding their impact on the cryptocurrency market.

On the 14th of March, the trading volume for IBIT reached an impressive figure, with approximately 99.3 million shares traded.

This activity amounted to a trading volume of around $3.9 billion. This volume marks a significant milestone, outpacing the previous record set just over a week prior. 

Among its peers, BlackRock’s ETF emerges as a front-runner. Meanwhile, Grayscale Bitcoin Trust [GBTC] remains the leader among the ten-spot BTC ETFs in the United States in terms of total assets.