How Bitcoin lost by winning

Bitcoin has officially arrived on Wall Street. The SEC’s approval of 11 spot bitcoin ETFs now gives the cryptocurrency legitimacy, accessibility, mainstream reach and acceptance. But Bitcoin was supposed to be so much more – a revolution, bypassing the traditional financial system with a democratic, decentralized, peer-to-peer electronic cash system for unbanked populations. But Wall Street did what Wall Street does best. This week on TechCheck, how Bitcoin lost by winning.

Chapters:
0:00 – How Bitcoin lost by winning
1:00 – Bitcoin meets Wall Street
3:02 – Bitcoin contradicted
7:03 – Where next?

Bitcoin has officially arrived on Wall Street the watershed moment for the crypto industry happening today bitcoin’s big day all of the 11 crypto ETFs are now trading this being called an industry Game Changer it finally happened how many years 11 years have we’ve been waiting for this a new asset

Class legitimacy and accessibility mainstream reach and Wall Street acceptance for the first 3 years of thinking about it was a naysayer and about two years ago I I switched and I’m I’m I’m act you know as I said in the last two years I’m a big believer but

Wall Street’s embrace it was never part of the original proposition it was supposed to be so much more this blockchain revolution this dentalized revolution is going to change the way we live the beauty of Bitcoin is that it’s electronic this is a great way to create

Freedom in a lot of countries where they don’t have it money is the nucleus of functioning human society and we’ve been able to a breakthrough in computer science and engineer the best version of that that is accessible to everyone and Equitable for everyone this week on Tech check how Bitcoin lost by winning

It took the SEC nearly a decade to approve a spot Bitcoin ETF and when it finally did happen some of the biggest voices in crypto they felt Vindicated we were optimistic we we were steadfast in our conviction around this but this is really the culmination of 10 years of

Work this is a historic moment in the sense of it’s the first time that the internet and Wall Street they’ve had this healthy tension for a couple of years uh even a couple decades and it’s the first time Wall Street blinked listen you know the earliest adapter

Always get richest but why was this such an important Milestone an ETF or an exchange traded fund it’s an investment fund that tracks the performance of an underlying asset like stocks currencies or gold something recognized by the financial Community as having value and for decades some of the most prominent

And well respected leaders in finance firmly did not believe that Bitcoin had any intrinsic value I could care less what Bitcoin trades for how it trades why it trades who trades it if you’re stupid enough to buy it you’ll pay the price for it one day and they’re gambling they’re not in investing

Sometimes I call it crypto krabo and sometimes I call it well crypto but ETF approval has ushered in a new era for Bitcoin it gives the digital asset status regulatory oversight increased accessibility and liquidity it proved the naysay is wrong there is an odd love affair uh with something that flew in

The face of what Jamie Diamond said who’s the most respected Banker in America and what the late Charlie M said so the opponents of this I think were now being viewed as fdy duddies and because ETFs give investors exposure to the value of an underlying asset without directly owning it investors no longer

Had to worry about Crypt native platforms like FTX or Celsius or blockfi going under those who had uh their money in uh this the National Bank bank of Sam bankman freed are kind of like they Jesse James robbed them there’s no Jesse James when it comes to the ETS Bitcoin

Institutionalized but what if Bitcoin lost the war by winning this battle it was supposed to be a revolution a centralized peer-to-peer electronic cash system Bitcoin is now being used to buy regular things from restaurants to retail so why not real estate Restaurant Freehold just started accepting Bitcoin

As payment others are even accepting it as payment for bigger purchases how many Yachts have you sold using Bitcoin so we’ve done about a dozen crypto transactions but it never took off as a form of payment even in El Salvador where Bitcoin was made legal tender it’s

Still not widely used for payments and it didn’t bypass the financial system either or become a democratic alternative bringing services to unbanked populations instead it was subsumed another asset class that exists within our traditional monetary structure there’s an irony in the midst of this Satoshi Nakamoto said this was

Going to be a decentralized system and and Finance this has led to centralization think about the irony of those who say this week is historic this was about centralization and traditional means of Finance like treasuries or shares of Tesla or gold hudge funds they can trade it at your own risk you can

Even add it to your 401k even Black Rock the biggest asset manager in the world has a Bitcoin ETF and is on Pace to become the largest holder of Bitcoin in the world hitting a billion dollars in assets under management just 3 days after launch we were very happy with the

Flows it appears that we received about 40% of the flows yesterday Black Rock though was a symbol of the traditional system that Bitcoin was designed to challenge and disrupt now it is a core part of the Bitcoin story and while Bitcoin hasn’t seen wide adoption as a

Form of payment it has become a more mainstream investment investors have so far poured more than $800 million into Bitcoin ETF funds since they were approved but the more Bitcoin that’s held in funds the less that is available for users it’s use case as a digital currency is further away than ever

Bitcoin has now further solidified itself as a store of value not as a means of exchange investors I think should be uh aware that this the underlying asset is a highly speculative volatile asset and uh amongst its uh use cases is really uh for illicit activity money laundering

And sanctions put another way Wall Street did what Wall Street does best it took a risky asset and made a market it subsumed Bitcoin into the system before Bitcoin could build its own system and now it’s also reaping the rewards here’s our Kate Rooney so one of the sneaky

Kind of under the radar winners in this whole ETF story and Bitcoin ETF story is actually the Wall Street Bank so they’re what are known as the authorized participants they’re sometimes called the aps you’ve got names like JP Morgan Jane Street caner Fitzgerald on this list of the trading desks who are behind

The scenes they’re creating and redeeming shares but as part of that they’re basically picking up the breadcrumbs they’re taking a slice of each transaction if there’s a lot of volume going into these Bitcoin ETFs which has been the case in the last few trading days they’re the ones really

Winning on the back end and the irony even some of bitcoin’s biggest critics will end up the biggest winners of the ETFs the banks especially JP Morgan and their trading desks are going to make some money on this as for the Revolutionary defi projects and blockchainbased technologies that only

Crypto can solve they’ve been slow to materialize Bitcoin has also fallen short of its promise as a hedge against inflation and volatility its decentralized nature and limited Supply That was supposed to be an alternative to the dollar when the Dollar’s value is decreasing instead bitcoin’s value has fallen alongside traditional stock

Markets during periods of Market turmoil or when central banks have signaled interest rate hikes it’s behaved more like a speculative Tech stock okay let’s put aside bitcoin’s original promise so is it a good investment or store of value let’s break it down the SEC approved 11 Bitcoin spot

ETFs on that Watershed first day and it expects more to apply for trading in the coming months there’s little daylight between each of them how are customers the public supposed to think of the distinctions between the way you’re doing it the way black Rock’s doing it

The way Fidelity is doing it the way scales doing it we’re the only ones with both uh the crypto and the ETF expertise we’ve done this before we’ve done it in Germany we’ve done it in can we’ve done it in Brazil it’s about the asset manager that’s behind it we’re a crypto

Specialist we’ve weathered all different types of speed bumps and advancements within the crypto ecosystem so the biggest difference at least for investors comes down to the fees that each broker charges and with so much competition it’s been a race to the bottom almost every broker slash fees in

The days before the approval approval with most cutting to 20 to 30 basis points and many eliminating fees all together for the first few months it could mean that not all of them will survive I think in the long run you’re going to have two or three that actually

Uh win as for where Bitcoin itself goes from here that has been hotly contested as well thematic ETFs they usually launch at Peak hype and Peak price traditionally ETFs Mark the high the short-term high the first ETF 2 track Bitcoin Futures that launched in October of 2020

And it topped a billion dollarss in Assets in just two days those who bought in at the time though they also got a near bitcoin’s Peak when one Bitcoin was worth about $61,000 the ETF tracking the price of Bitcoin it fell 72% in its first year and today it’s down 50% since that

Launch as the Wall Street Journal puts it sematic funds typically launched only after investors have already bit up the underlying assets from the internet funds of the late 1990s to the green cannabis space and Spa funds of 2021 investors should know not to pile into already popular ideas yet they keep on

Buying high and frequently end up selling low but that hasn’t stopped crypto’s most fervent Believers from making bold predictions our base case uh is in the $600,000 range our bull case and we think the probability of the bull case has increased with this SEC approval this is a green light our bull

Case is $1.5 Million by 2030 I think in the next 12 months uh something over 100,000 you know maybe 150,000 in 5 years you you know something around half a million would be potentially achievable like a stock or the price of oil Bitcoin will only get more price

Targets as its Wall Street Journey just begins solidifying Bitcoin status as an asset class For Better or For Worse sh