Who will control the Bitcoin ETF Trojan Horse?

We have highly hyped the arrival of a Bitcoin ETF. I expect we will have similar excitement for an Ethereum ETF, and it will eventually happen.

That being said, I want to give you a more sobering perspective on a Bitcoin ETF and what it means.

Don’t get me wrong. I celebrate the Bitcoin ETF victory as well. The SEC should have approved this initiative years ago. However, by applying “arbitrary and perverse” anti-crypto logic, they have blocked a Bitcoin ETF for over a decade, undermining the very crypto retail market they swore to protect by allowing pseudo-ETF products like Grayscale BTC to trade at negative premiums.

They even shamelessly call this "protecting investors".

It now appears that Gary Gensler's only legacy is the complete loss of legitimacy for the SEC, followed by its capitulation under court order.

Yes, retail investors should have a Bitcoin ETF. This is how you get your parents to add crypto to their retirement 401(k) accounts. Bitcoin wrapped in an ETF shell enables it to work with brokerage accounts, financial advisors, and institutional banks - there is something useful in TradFi, and we should use it. We just have to remember that this is not Banking 2.0 in a Bankless Money System, but a weird hybrid - a kind of "Banking 1.5".

Through this process, we have also brought in a new ally. BlackRock and banks can now sell crypto IOUs ( IOUs ) to the public. This is where we should be cautious.

There is no doubt that pressure from bankers like BlackRock CEO Larry Fink pushed the SEC hard in the direction of approval. Despite the anti-bank posturing of politicians, bankers have serious influence in Washington. Wall Street gets what it wants. They see the cryptocurrency market and want products to sell. The regulators backed down.

This alliance between bankers and cryptocurrencies counters the power of anti-market political forces like Gensler. It is driven by simple profit incentives - up! Thanks up.

But in this victory we sow the seeds for future conflict – a war of convenience. When it comes to privacy, whose side do you think bankers will take? Pro-state or pro-cryptocurrency?

What about self-custody? Do you think they want people to hold their own private keys and leave the banks?

Or what about DeFi? If DeFi starts eating into their profits, I think they will wholeheartedly support a ban.

Bankers would rather sell Bitcoin IOUs than sell Bitcoin. What I am saying is that Wall Street is a fickle ally. Their loyalty to profits will help us win some battles, but it will not help us win the war.

Gensler is just a small boss.

In the ultimate confrontation — a fight for a censorship-resistant monetary system by the people, for the people, against the totalitarian apparatus of the state and its corporate tentacles — don’t expect BlackRock to be on our side.

Don't count on any bank.

Are the bankers taking advantage of us, or are we taking advantage of the bankers? The answer is both.

So let us celebrate today and be cautious tomorrow.

I’m not sure who controls the Bitcoin ETF Trojan Horse — is it us or the banks? My hope is that the algorithms will prevail.

Code, not monarchs. Bankless, not Blackstone.