Subnostr

I don't understand how Blackrock would 'dominate' the spot market. Could Blackrock drive the #BTC price up if they needed BTC in trust to continue issuing Shares of a BTC #ETF? Is that domination? How would they harm me and my small holdings if they owned most of the BTC? This just seems more risky to ETF shareholders than me.

BTC_P2P 2y ago

This won’t harm you, it’ll make you much more wealthy. But it’ll make it hard for plebs to accumulate Bitcoin and that will be sad to see that window close.

Bitcoin spot price is set at the margin. So there is a small % of supply that is traded for spot price aka the “float” and this is where price is determined by the market.

When a huge buyer with mass capital enters the market they can easily corner the float bc of the disproportionate amount of capital vs everyone else. They will buy much of what is available and these relentless bids for a scarce asset will drive up price. Sellers will dwindle and it’ll take more fiat per Sat to find sellers over time.

In this situation the spot price will gap up dramatically and it’ll increase the purchasing power per sat dramatically as well. Good for hodlers, bad for anyone who is on zero bitcoin.

It’ll be more costly to tx on base chain as a Sat will have much greater value in open markets (imagine a 3000 Sat tx having a spot value of $10 instead of $1).

At this point regular ppl will have a harder time acquiring UTXO’s bc they’ll be a lot more expensive and tx’s for smaller amounts will be uneconomical. So the days of $10 buys will be over.

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Discussion

Medici 2y ago

I am not finding it any harder to accumulate BTC today than many years ago. The institutions that have come into existence since I first started have made it easier. I can understand that plebs won’t be able to accumulate as much BTC with their dollars if the price goes up, but I don’t see this as a bad thing if the BTC stores the value they expect. There may be some growing pains with the transaction costs. Perhaps Lightning can assist with that. Thanks

BTC_P2P 2y ago

When Blackrock’s etf is approved it will become harder to accumulate spot BTC and much more expensive to transact.

I would always rather have Bitcoin distributed to regular people and that window closing, which is what I’m lamenting.

But major institutions moving into the market has always been an inevitable stage in Bitcoin’s development. I’m hopeful it takes a year or two longer so more regular folks can benefit before the paradigm shift.