#Bitcoin ETFs are going to unintentionally break the global financial system 😂

1) ETFs are managed funds that hold #BTC

2) ETFs are making Bitcoin easily accessible to everyone with a brokerage account

3) Easier access = rising interest in the asset

Here's how I think things will play out:

(Of course, this may not happen, it's just an educated guess based on an understanding of how fiat works and how Bitcoin works. Nobody is an expert, so I could be wrong!)

As interest in Bitcoin grows, the price rises, redistributing wealth from legacy assets to the Bitcoin holders.

The people who owned Bitcoin pre-ETF are now getting wealthier and can spend the wealth they accumulated by being early.

This is going to increase demand for goods, meaning inflation will get worse.

Rising inflation will push the Federal Reserve to raise rates EVEN MORE.

As the Fed raises rates, it incentivizes businesses to keep their money idle to earn interest instead of investing it.

This will lead to even less production and more inflation (demand keeps increasing but supply doesn't)...

The Federal Reserve can raise rates all it wants, but it won't have the intended effect.

It will just move even more capital from the legacy financial system to Bitcoin because of the supply certainty (it has a pre-determined supply schedule) and debasement resistance (it can't be printed at will).

If the Fed chooses to decrease rates from here, it will lead to even MORE interest in Bitcoin as market participants try to find a way out of holding dollars.

You can buy any amount of Bitcoin without having to take on debt.

This is unlike real estate, which is negatively impacted by interest rates (since prices are so high that EVERYONE needs to borrow to buy a house).

If rates increase, demand for real estate as an investment drops (it becomes less profitable), and Bitcoin's price rises even further.

The current financial system relies on market participants to borrow money and pay interest so it can continue operating.

If Bitcoin holders want real estate, they can exchange their asset directly for a home, allowing them to completely avoid the banking system if interest rates are too high.

If interest rates are increased from where they are today (to reduce demand and control inflation), it puts the US government's bonds at risk - the US government will need to borrow MORE money to pay the interest on its debts.

If interest rates stay stagnant or are reduced, it puts the US dollar at risk.

This spiral will continue until Bitcoin is the dominant form of savings for the majority of people/countries/businesses.

I think this will take 10-20 years to play out, but who knows - it could happen a lot quicker.

Thoughts?