Arthur Hayes names the only problem that can kill bitcoin

Arthur Hayes, the former CEO of the BitMEX cryptocurrency exchange, has expressed concern about the possible collapse of bitcoin. The expert named the only problem that, in his opinion, could kill bitcoin.

As Hayes explained, institutional custody of the market leader could turn it from an instrument of financial freedom into an institutionalized asset, thereby defeating its main purpose. The idea of bitcoin from the very beginning was decentralization — a financial system that functions without any centralized authority. «Encroachment on institutional interests, especially the potential approval of spot bitcoin ETFs, could be a double-edged sword,» the analyst emphasized.

In a recent podcast, Hayes laid out a rather gloomy scenario. He speculated on the potential consequences if traditional financial moguls like BlackRock CEO Larry Fink and his ilk decide to seize a significant portion of the publicly traded Cryptocurrency. This action could turn bitcoin from an instrument of financial freedom into another asset under institutional control, Arthur Hayes believes.

The crux of the concern is how these institutional giants could potentially control bitcoin, changing its fundamental purpose. Hayes noted that if organizations such as BlackRock and Fidelity enter the fray by launching bitcoin exchange-traded funds, they will become «agents of the state,» which is a clear contradiction to decentralization.

In addition, Hayes expressed concern that if BlackRock becomes too big, it could «kill bitcoin.» The accumulated HTS will turn into a stagnant asset rather than a circulating currency.

At the end of October, Hayes named US military spending as the reason for bitcoin’s growth. In an essay titled The Periphery, Hayes explained the recent surge in the crypto market by Joe Biden’s open-ended commitment to support Israel’s military efforts against Hamas. «If you add Ukraine to the mix, America’s military budget is going to explode,» Hayes said. «This will increase future government borrowing, and when it comes to the amount of capital that can go to war, there is no limit.»