The number of monthly active open source developers in the crypto space has decreased by a quarter, according to a new report. Photo illustration: Fortune Original photo from Getty Images
The SEC’s recent decision to approve nearly a dozen Bitcoin ETFs was hailed as a major victory for cryptocurrencies. But not everyone does that. On X/Twitter, a disgruntled faction of the cryptocurrency community denounced the alleged heresy of Bitcoin products controlled and sold by BlackRock and others. The most common objections seem to be:Bitcoin doesn't need an ETFAnd they argue that using intermediaries to buy it, especially those from Wall Street, perverts the ideal of decentralization.
In more extreme cases, people like Chris Breck, who calls himself a researcher, go so far as to: suggest There is a possibility that BlackRock and others may collude to change Bitcoin's core functionality. and OG Bitcoiner Max Keizer warned A scenario in which Bitcoin held by an ETF is confiscated by the US government.
This protest is misguided. Bitcoin ETFs are great for furthering the original mission of the Bitcoin project, and Satoshi Nakamoto is happy to nod to this new tool to get his pieces, wherever they are. There is no doubt about it.
Remember that Bitcoin is a type of peer-to-peer digital cash that cannot be usurped at the whim of any intermediary. And if Bitcoin is meant to allow individuals to become their own bank, ETFs strengthen its position as a store of value. The way store of value works is to buy it with excess savings and sell it later when you need to consume it. A store of value that is resistant to censorship and seizure is to buy it when you need protection and sell it when you don't. In other words, people who want to hold Bitcoin without needing its raison d'être Provide valuable services to those in need.
I buy Bitcoin mainly because other people accept it. If I lived in a dictatorship, I would choose to buy Bitcoin over the local currency. Because I know Bitcoin has a global market outside of capital controls and my wealth will be destroyed. That belief is only strengthened by the knowledge that the world's largest capital market has a Bitcoin market that satisfies even the most staunch of investors.
Bitcoin is designed with censorship resistance and portability in mind, so you can take it anywhere in the world. Keeping your Bitcoin safe means keeping the strings secret, which can stay in your head if necessary. It is a sad sign of the times that this feature of Bitcoin is becoming more important as more and more people become “unbanked” due to capricious government policies. What's even sadder is that Bitcoin's use cases have increased due to recent armed conflicts and mass capital flight.
Bitcoin holders have always provided services to people who need Bitcoin. Over the past decade, companies like Coinbase and Kraken have made it easy to set up an account on an exchange to buy Bitcoin or portions of Bitcoin. It's natural to wonder how the market will fare for Bitcoin ETF buyers in 2024.
Under existing regulations, holding an ETF in an IRA or 401k is much easier than holding any type of crypto token. This is because issuers of these assets are audited in a manner that is compatible with modern financial services requirements. Therefore, ETFs can expand their market by appealing to different segments of potential consumers. Additionally, fewer negative security and liquidity experiences for the average Bitcoin holder means better outcomes for the industry's reputation. For years, journalists have breathlessly reported stories about fortunes lost to user error (and devised creative accounting techniques to exaggerate the impact).
In other words, Spot Bitcoin ETF helps solve the last mile problem for cryptocurrencies. The crypto market has traditionally been saturated by ideologues and gamblers. The emergence of audited vehicles holding Bitcoin alienates potential users by burdening them with arcane content that early ideologues (like me) easily tolerated. create more liquidity globally without Instead of committing to finding a security solution that resembles a Rube Goldberg machine, consumers who aren't usually interested in cryptocurrencies and are interested can now easily participate in this grand experiment. I did. Bitcoin may not need an ETF, but it certainly does need an alternative to safe deposit boxes and ledger devices.
Not only the tech-savvy, but also ordinary people interested in Bitcoin can now step into the ETF pool and contribute to Bitcoin's liquidity. After all, this should be celebrated even by Bitcoin's most traditional believers, not to mention those who use it as a lifeline.
Kathleen Brightman is Tezos. The opinions expressed in Fortune.com commentary articles are solely those of the author and do not necessarily reflect the author's opinions or beliefs. luck.
