Bitcoin will be 'destroyed' after exchange fund arrives, according to former cryptocurrency chief

Now access your Bitcoin (BTC) exchange-traded fund, or SPOT ETF The ETF appears to be becoming a reality, with the cryptocurrency world anxiously counting down to the moment of approval. Expectations are high, but Arthur Hayes, co-founder and former CEO of cryptocurrency exchange BitMEX, is issuing a big warning.

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ETFs could completely “destroy” Bitcoin

in Post from December 22nd Hayes, also a prominent Bitcoin customer, explains bullHe expressed that he sees an additional problem with the successful launch of spot Bitcoin ETFs.

He explains that BTC has value because it “moves” on the blockchain. Spot bitcoin ETFs run counter to this value proposition, according to Hayes, because they would slow the flow of coins. “Bitcoin spot ETFs were created to ‘absorb assets’ and ‘store them in a metaphorical vault,’” Hayes wrote.

According to him, the huge success of the ETF could lead to the number of transactions on the blockchain drying up. He said the following about this:

“BlackRock, the world's largest fund manager, plays the accumulation game. They absorb assets, put them in a vault, issue tradable shares, and then collect management fees for their 'hard' work. They don't use the assets they hold for clients, which is… “A problem for Bitcoin if we take this to the extreme in the future.”

The end result, Hayes says, is that miners will turn off their equipment “because they can no longer afford to pay for the energy needed to run it.” In this dark scenario, Bitcoin could be “completely destroyed” in his view. After all, miners are an important link within the ecosystem that secures the network with large amounts of computing power.

Very little BTC reward for miners

To add a new transaction block to the chain, miners receive both a Block reward Where all transaction costs are paid. Every 4 years, the block reward is halved as Bitcoin halves and by 2140, it will fall to 0.

From that year onwards, transaction costs will be crucial for miners to survive. According to Hayes, this could pose a problem when institutional parties manage massive amounts of bitcoin through ETFs.

How far such a future will unfold is, of course, a big question mark. Currently, the cryptocurrency world is optimistically awaiting a decision from the United States Securities and Exchange Commission (SEC), which according to analysts is likely to approve multiple applications on January 8, 9 or 10.

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