I don't think the fact that most BTC is held in non custodial walletsis true. All the people I know in IRL who want to get into crypto ALWAYS choose the binance way ot the crypto.com way. None of them even think about coinjoins, lighting network, etc. I doubt they even know how a bitcoin adress looks like.

nostr:npub1s5yq6wadwrxde4lhfs56gn64hwzuhnfa6r9mj476r5s4hkunzgzqrs6q7z makes a good argument about the largest #bitcoin supply being in strong hands and likely not made available to ETFs to enable the suppression of #bitcoin price for a long time like it happens with #gold. However, short term price manipulations can be still used to deter or delay adoption. Relatively little supply can be thrown to the market at any single moment to dump the price and a Blackrock ETF could do that easily. This can substantially achieve the same effects as if controlling the market.

The second point to consider, which is very important, is that any such financial derivative product will deter the interested party from adopting the self-custodial bearer asset because opting for the financial derivative is the easier path for a beginner. Therefore, this will dilute the demand and still indirectly suppress the price of #bitcoin.

I stick to my view that bitcoin financialization is a net negative because it means:

1. Diluted demand for the real bitcoin, the non-custodial, bearer, decentralized, censorship resistant asset. Money will rather flow into the black hole of fiat financial custodians. Anyone FTX & Co.? 2. Discourages self-custody and financial responsibility. You are not your own bank. You are not financially independent. In the long term this means they will be able to control the price like they did with gold. Paper gold claims are estimated at 1000times more than physical ounces. See how this has successfully capped the gold price.

3. Discourages learning about Bitcoin and becoming financially literate.

4. It is very risky. You will buy nothing else than counterparty risk. You will own nothing but a claim on a claim. Blackrock holds its bitcoin in a non-custodial wallet held by Coinbase. Therefore you have 2 counterparty risks and NO bitcoins: shares of the Blackrock ETF and IOU on the Coinbase account.

5. Censorship resistance is gone and the intermediaries can easily enforce third party claims or government/judicial dictats on your "paper" bitcoin claim via the intermediaries.

6. It encourages speculation, manipulation and discourages true adoption (i.e bitcoin real time monetization).

I explain very clearly in the articles below why I do not believe in "Santa Blackrock".

PART I

https://andreleblanc.substack.com/p/will-bitcoin-win-and-foster-a-new

PART II

https://andreleblanc.substack.com/p/will-bitcoin-win-and-foster-a-new-a13