The launch of a spot exchange-traded Bitcoin fund contradicts the idea of non-custodial storage and could lead to fundamental problems for the asset. This was stated by Jozef Tetek, an analyst at Trezor, in an interview with Cointelegraph.
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The main negative consequence would be that a large portion of the first cryptocurrency would be held on centralized platforms, from which governments could seize them. The expert compared this event to the confiscation of gold in the United States in the 1930s.
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\”In principle, spot Bitcoin ETFs move people further away from self-custody and potentially create systemic risk, since funds appear safer than exchanges,\” he noted.
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Tetek wondered whether the market really needs an exchange-traded fund, if a regular purchase of digital gold creates a similar degree of risk to transactions on traditional platforms.
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Another problem is that ETF investors will not be able to redeem the underlying asset. Meanwhile, the real coins would belong to the fund itself, increasing the likelihood of uncontrolled issuance of \”paper Bitcoins\”.
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\”The result could be the creation of millions of unbacked coins, which would distort markets and undermine the value of the real asset, giving greater latitude to traditional centralized financial giants. A complete reversal of Satoshi’s original vision,\” added the Trezor researcher.
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Currently, the SEC requires potential ETF issuers that the issuance and redemption of the product be conducted exclusively in physical form — in fiat. Earlier, a number of experts criticised this decision, as it would make ETFs less efficient.
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According to Mati Greenspan, founder of Quantum Economics, there is no direct conflict between self-custody and a Bitcoin ETF, since retail users will stick to the former.
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\”Personally, I would never buy any paper IOUs on Bitcoin. But that’s because I have the option of self-custody. Most institutions don’t have it,\” emphasised he.
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Earlier, the SEC designated December 29 as the deadline for applicants to file amended applications for launching spot Bitcoin ETFs.
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In the community, predict that the regulator will issue a positive decision by January 10, 2024. There has already been television advertising for future exchange-traded products.
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