It’s
the
moment
the
crypto
world
has
been
waiting
for:
The
Securities
and
Exchange
Commission
(SEC)
has
finally
approved
the
first
spot
Bitcoin
exchange-traded
fund
(ETF)
in
the
United
States.
Is
this
mainstream-friendly
investment
vehicle
at
odds
with
Bitcoin’s
original
goal
of
breaking
away
from
Wall
Street?
Absolutely.
Is
that
same
ETF
also
necessary
for
crypto
to
grow?
Also
yes.
The
crypto
industry
has
simply
not
been
able
to
reach
mainstream
adoption
on
its
own.
That’s
why,
despite
the
obvious
contradictions,
much
of
the
crypto
community
has
been
eagerly
anticipating
this
ETF
for
years.
The
SEC
turned
down
application
after
application,
but
recently
the
tide
started
to
turn.
We
never
know
for
sure
what
drives
up
the
price
of
Bitcoin,
but
ETF
euphoria
has
been
a
pretty
good
guess.
Bitcoin
rallied
nearly
160%
in
2023
and
has
gained
50%
in
the
last
six
months
alone,
a
surge
widely
acknowledged
to
be
driven
by
ETF
dreams.
So
let’s
just
take
a
moment
to
talk
about
the
elephant
in
the
room.
Bitcoin’s
pseudonymous
founder
Satoshi
Nakamoto
created
the
world’s
first
major
cryptocurrency
specifically
to
decrease
reliance
on
financial
institutions.
Bitcoin’s
invention
followed
the
2008
financial
crisis
and
the
related
collapse
in
trust
in
the
banking
system.
The
very
first
sentence
of
the
Bitcoin
white
paper
abstract
envisions
“a
purely
peer
to
peer
version
of
electronic
cash
that
would
allow
online
payments
to
be
sent
from
one
party
to
another
without
going
through
a
financial
institution.”
Read
more:
What
Is
a
Bitcoin
ETF?
In
other
words,
Bitcoin
was
designed
to
be
everything
an
ETF
is
not.
An
ETF
gives
investors
exposure
to
bitcoin
in
their
traditional
brokerage
accounts
via
the
stock
market.
The
institutions
applying
for
ETFs
include
Blackrock,
Grayscale
and
Fidelity,
the
very
“intermediaries”
that
Satoshi
Nakamoto
wanted
to
eliminate.
Then
there’s
that
favorite
phrase
of
crypto
purists,
“not
your
keys,
not
your
coins.”
This
basically
means
that
if
you
are
holding
bitcoin
on
a
crypto
exchange
as
opposed
to
in
your
own
wallet,
for
example,
then
that
bitcoin
is
not
truly
yours.
ETFs
introduce
yet
another
degree
of
separation.
Investors
in
an
ETF
aren’t
even
buying
actual
bitcoin,
they
are
just
buying
price
exposure
to
that
bitcoin.
And
finally,
there
was
Nakamoto’s
warning
that
“the
cost
of
mediation
increases
transaction
costs.”
A
Bitcoin
ETF
certainly
doesn’t
solve
this
problem.
Instead,
it
comes
with
management
fees,
with
Grayscale’s
fees
reaching
up
to
1.5%,
even
if
competition
is
already
driving
some
issuers’
fees
down.
So
why
is
the
crypto
world
so
excited
about
this
Diet
Coke
version
of
digital
currency?
This
is
pretty
far
from
the
decentralized
future
that
we’ve
all
been
supposedly
fighting
for.
The
mostly
simple
answer,
of
course,
is
price.
With
some
exceptions,
much
of
the
industry
still
remains
highly
vulnerable
to
the
whims
of
token
prices.
When
the
markets
are
down,
venture
capitalists
lose
interest
and
sponsorships
and
advertising
budgets
suffer.
Consumer-facing
services
find
it
harder
to
onboard
new
users.
Furthermore,
various
altcoins
tend
to
rise
or
sink
with
bitcoin.
This
time,
bitcoin’s
rise
seems
to
be
largely
thanks
to
major
financial
institutions
and
the
SEC.
But
the
industry
is
not
complaining
about
it
too
much.
Then
there
is
the
whole
mainstream
adoption
argument
–
namely
that
spot
ETF
approvals
will
unleash
a
flood
of
new
investors
who
can’t
be
bothered
to
open
an
account
at
a
crypto
exchange,
much
less
set
up
a
wallet
on
their
phone
or
run
a
node
on
their
home
computer.
On
a
more
basic
level,
involvement
by
brand-name
institutions
in
the
market
may
assuage
investors
who
associate
crypto
with
fraud.
Thanks
to
ETFs,
the
crypto
community
has
enjoyed
a
few
weeks
of
relatively
positive
media
attention,
a
nice
break
from
all
the
Sam
Bankman-Fried
headlines
of
2023.
What
the
ETF
really
brings
is
more
credibility.
In
this
case,
Wall
Street
involvement
is
contingent
on
government
approval.
The
SEC
finally
approving
an
ETF
after
years
of
rejections
based
on
fears
of
“market
manipulation”
indicates
a
degree
of
acceptance,
however
begrudging,
of
this
asset
class
by
one
of
its
fiercest
critics,
SEC
chair
Gary
Gensler.
In
theory,
crypto
is
also
independent
of
governments,
and
so
the
SEC
shouldn’t
matter
that
much.
In
reality,
crypto
Twitter
is
basically
obsessed
with
most
everything
Gensler
says
and
does.
That
said,
Gensler’s
apparent
antipathy
to
the
industry,
which
manifests
itself
in
a
lack
of
regulatory
clarity
and
a
slew
of
lawsuits
against
major
industry
players,
has
not
killed
the
industry.
Nor
has
it
stopped
crypto
from
booming
in
other
parts
of
the
world,
particularly
in
Asia.
But
it
has
come
at
a
cost.
Some
crypto
companies
spend
years
embroiled
in
SEC
lawsuits.
Others
choose
to
avoid
the
U.S.
entirely,
despite
it
being
the
world’s
largest
economy
and
a
major
source
of
capital
and
talent.
Crypto
needs
some
degree
of
government
approval.
It
needs
Wall
Street
involvement.
The
future
of
crypto
does
not
look
like
the
Wild
West,
it
looks
more
like
Japan,
Hong
Kong
and
Singapore,
three
jurisdictions
with
some
of
the
toughest
regulations
in
the
world.
It’s
hard
enough
to
build
a
decentralized
project,
let
alone
in
a
bear
market
with
hostile
regulators,
cautious
investors
and
wary
consumers.
Hopefully
Wall
Street’s
culture
will
not
define
the
industry,
but
will
provide
a
stamp
of
credibility
that
allows
more
crypto
projects
to
thrive.
