A good article deeply analyzing the impact of Bitcoin ETF on future finance

I have read Mr. Zhu Weisha’s “Behind the scenes of SEC approval of Bitcoin ETF” (chainless.hk) and am enlightened. In the article, Mr. Zhu deeply analyzed and criticized Gensler’s statement.

Mr. Zhu believes that Gary Gensler’s statement has many problems. For example, Gensler pointed out that Bitcoin is mainly a speculative asset with high volatility and is used for illegal activities, including ransomware, money laundering, evasion of sanctions, and terrorist financing. However, despite knowing that Bitcoin has many problems, the SEC approved Bitcoin futures in 2021. Mr. Zhu believes that this is inconsistent with the SEC’s approval logic.

In addition, Mr. Zhu also criticized Gensler’s unclear understanding of the difference between consensus assets and fiat assets. He pointed out that both gold and Bitcoin are consensus assets whose value is recognized by the market after many years of consensus and does not require the recognition and approval of the SEC. Therefore, the point in Gensler’s statement that “we have not approved or recognized Bitcoin” is where Mr. Zhu believes the problem lies.

The article continues to discuss that regulation is the biggest reason for the explosion thunder of cryptocurrencies. It lists a series of regulatory actions by the SEC against the cryptocurrency industry from 2021 to 2023, including investigations and lawsuits against Circle, Coinbase, Uniswap Labs, BlockFi, Nexo, Kraken, BUSD, Coinbase Exchange, and Binance US and its founder Zhao Changpeng. He believes these actions constitute a substantial bearish factor for cryptocurrencies, triggering a chain explosion thunder in the coin circle.

In general, Mr. Zhu criticizes the regulatory actions of the SEC and Gensler. He believes that these actions have caused harm to the cryptocurrency market and investors and are contrary to the principle of protecting consumers. He believes that the development of crypto assets is inevitable, and the financial market will eventually accept the financial revolution initiated by Bitcoin, either actively or passively. The United States has two choices: to lead or to follow.

Strangulation is not an option; the United States is the United States, and the spirit of the market is written into its bones. The United States has quite a few intelligent people, and although their positions are all to safeguard American interests, their methods are much more sophisticated. Gensler’s revolutionary actions have finally come to an end.

The article also discusses the influence of significant capital in the cryptocurrency market, especially the role of BlackRock and its CEO, Larry Fink, in the approval process of the Bitcoin ETF.

The article mentions that in June 2023, the U.S. Securities and Exchange Commission (SEC) sued Coinbase and Binance, which are the largest cryptocurrency exchanges in the United States and globally, respectively. However, during the same period, six major capital players, including BlackRock, submitted applications for Bitcoin ETF spot funds, which is seen as a major event that changes the fate of the cryptocurrency market.

The article further points out that BlackRock and Larry Fink have considerable influence in both the political and business fields. They not only have a great influence in the business world but also have a considerable influence in politics. They have a certain say in the Democratic Party and can influence its policies to a certain extent. It allows them to play a key role in the approval process of the Bitcoin ETF.

The article also mentions Larry Fink’s change of view on Bitcoin. In 2017, he called Bitcoin a “money laundering indicator” in the market. Still, in an interview with CNBC in 2021, he said that BlackRock’s clients have very little demand for crypto assets, but they have begun to study whether crypto assets are good long-term investment targets. This shows that he has made deep progress in understanding Bitcoin.

The article finally depicts the possible dialogue between Larry Fink and the SEC chairman through an imagined dialogue, showing their views and strategies on Bitcoin and the cryptocurrency market. This paragraph is very interesting and imaginative!

Mr. Zhu’s article provides deep insights into the SEC’s regulatory attitude towards cryptocurrencies and the cryptocurrency market’s development trend. He deeply understands the influence of significant capital in the cryptocurrency market and the political and business dynamics in the approval process of the Bitcoin ETF.

To summarize Mr. Zhu’s views, the U.S. approval of the Bitcoin spot ETF has changed the underlying logic of U.S. finance. First, Bitcoin supports the dollar’s value; second, it serves as a new reservoir for regulating the U.S. economy; and third, it is used as a tool for the U.S. to establish a new financial hegemony.

The underlying logic has changed, and the original experience of Bitcoin will become invalid. If you don’t understand this, you will suffer a disastrous defeat in investment. Don’t give up your chips too early.

In my opinion, cryptocurrency is a cross-disciplinary field that requires a deep understanding and knowledge of multiple fields. Some of the main stakeholders mentioned in Mr. Zhu’s article (U.S. SEC, BlackRock) may not have a deep and thorough understanding, so there may be many problems of ideological contradiction in some policy formulation and decision-making.

In my opinion, to fully understand cryptocurrency, it should at least include the following knowledge:

Technical understanding: Understanding the technology behind cryptocurrency, including blockchain, cryptography, distributed systems, etc., is the basis for understanding cryptocurrency. These technologies are the basis for cryptocurrency operation and determine its nature and possible applications.

Economic and financial knowledge: Cryptocurrency is a new type of financial asset, so it is essential to understand the basic principles of economics and finance. It includes the nature of money, market operation mechanisms, investment theory, etc.

Law and regulation: Due to the unique nature of cryptocurrency, it faces legal and regulatory challenges in many places. Understanding relevant laws and regulations, as well as the attitudes and policies of various countries towards cryptocurrency, is very important for investing in and using cryptocurrency.

Market marketing: The value of cryptocurrency largely depends on the market’s acceptance. Therefore, understanding the strategies and techniques of market marketing can help people better promote and use cryptocurrency.

Social philosophy and virtual community building: Cryptocurrency is not just a technology or financial product; it also represents a social concept, namely decentralization and freedom. Understanding these concepts and how to realize them in virtual communities is very important for understanding the full picture of cryptocurrency.

Risk management: The cryptocurrency market is highly volatile, and investors need risk identification and management capabilities. It includes sensitivity to market dynamics, diversification strategies for investment portfolios, and response strategies when the market changes.

To fully understand and apply cryptocurrency, we must learn and understand it in multiple fields. It is a process of continuous learning and exploration, and it is also a new field full of challenges and opportunities. In this process, we must keep an open mind, constantly learn new knowledge, and continuously explore new possibilities. Only in this way can we find our position in this new financial era and realize our value.

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