Thanks for the post.
How exactly can BR influence the bitcoin network through their holdings apart from the usual volatility increase in case they decide to dump their holdings?
How BlackRock's Dominance Could Become Dangerous for Bitcoin 🚨
BlackRock manages over 316,000 BTC with its Bitcoin ETF. The dominance of this U.S. financial giant is steadily increasing. Is this concentration a threat to Bitcoin? 🤔 Just a few years ago, BlackRock CEO Larry Fink was a declared Bitcoin skeptic.
https://m.primal.net/JTmZ.webp
However, the man at the helm of the world's largest asset manager has changed his mind. Once regarding Bitcoin merely as a tool for money laundering, he now views the cryptocurrency as "digital gold" and refers to it as a "safe haven" 🛡️.
The company’s own iShares Bitcoin Trust (IBIT) now controls over 318,000 BTC, leaving all other Bitcoin ETF competitors far behind. BlackRock's market share continues to rise and no one seems able to stop the U.S. financial behemoth. What does this concentration of economic power mean for Bitcoin?
This rising control brings several concerns. Firstly, the centralization of Bitcoin holdings contradicts the decentralized ethos originally championed by Bitcoin 🔄.
Such control by a single entity could lead to market manipulation, where the actions of one firm could significantly influence Bitcoin's price 📉.
Furthermore, BlackRock's position could also lead to regulatory scrutiny. Governments worldwide might perceive the concentration of Bitcoin under a corporate umbrella as a potential threat to fiscal policies or even financial stability 🌐.
This could prompt stricter regulations which might stifle the growth and innovation in the cryptocurrency sector 💼.
#bitcoin #hedgefond #crypto #invest #bitnewstoday
Discussion
BR can influence the Bitcoin network through their holdings in various ways, similar to how paper gold can manipulate the gold price. 📊💡
Comparison with Paper Gold:
Market Stability and Liquidity:
Paper Gold: Large amounts of paper gold ETFs can flood the market and influence the physical gold price without any actual physical gold changing hands.
Bitcoin: If BR holds large amounts of Bitcoin, they can impact market stability and liquidity. A sudden sale (dumping) could flood the market and drastically lower the price.
Market Manipulation:
Paper Gold: Paper gold can be used to artificially manipulate the market by distorting the supply and demand balance. ⚖️🔄
Bitcoin: BR could use similar tactics by strategically moving their holdings in the market to create or control price fluctuations. 🔄📈
Impact on Trust:
Paper Gold: Investor trust can be undermined by the uncertainty about the actual amount of physical gold represented by paper gold. 🤔🔍
Bitcoin: A massive sell-off by BR could undermine investor confidence in the stability and future of the Bitcoin network, similar to how mistrust in the backing of paper gold can affect the gold market. 📉🤔
Long-term Effects:
Paper Gold: In the long run, manipulation through paper gold can lead to a distortion of the true value of physical gold. ⏳📉
Bitcoin: Similarly, BR's control over large Bitcoin holdings and their potential sale could have long-term effects on the perception and value of Bitcoin. ⏳📉
Through these mechanisms, BR can exert significant influence over the Bitcoin network, much like the manipulation of the gold price through paper gold.
100% right......
In dummsty, every point made falls back to the usual volatility tricks (liquidity and volatility are inverse in relationship).
Regarding the second assertion made regarding the analogy to gold and the distortions created by "fake derivative market", a refutation to this easily be demonstrated in the block chain. If you don't settle on-chain, you don't own the bitcoin. All the ETFs are supposed to be backed 100% by on-chain bitcoins.
The more liquidity enters into bitcoin, the more resilient it will become to the only slippery slope it has: volatility.
As they say, volatility is the price we pay.