GM friends.
Crypto multi-millionaire Arthur Hayes recently proposed an apocalyptic scenario whereby the U.S. spot bitcoin ETFs eventually kill bitcoin. What?!?!
Go ahead and pour that morning coffee, but “Don’t Panic.” Everything’s going to be just fine.
Here comes your mid-week crypto update. ☕️📰
Here’s what’s in today’s issue:
- David shares his thoughts on Arthur Hayes’ extreme scenario for BTC ETFs, Solana and Metis getting a Christmas pump, Mt. Got repayments starting, Japan throwing out unrealized crypto profit taxes & the leadership shake-up at Grayscale.
- Erik has an article on crypto index funds.
- In case you missed it by Rebecca.
Arthur Hayes Presents “Extreme” Scenario for Bitcoin ETFs
On Saturday, Arthur Hayes, the former BitMEX CEO, dropped an end-of-year blog article explaining how the spot bitcoin ETFs could “completely destroy” the bitcoin network.
Before we dig into the details, understand the following.
Hayes acknowledges that his proposed scenario is an “extreme view of a possible future”. Fundamentally, it appears his intention through the article is to deliver a PSA to bitcoin holders for the purpose of further protecting and preserving the network.
Moreover, Hayes states, under the “Election Year” section of his post, that “[t]he best time to buy Bitcoin . . . was yesterday, the next best time is now.”
The point is that this isn’t some call by Hayes to panic and sell your bitcoin. Rather, it’s a reminder about what we can all do collectively – starting now and into the future – to help keep bitcoin as a decentralized asset free from the clutches of the authoritarians.
Ok, so what’s this extreme scenario? Hayes says that if the spot ETFs were so successful that they basically held all the bitcoin in circulation, then the bitcoin network would die. But how exactly would this happen?
It’s well known that the last bitcoin will be mined in 2140. At that point, bitcoin miners will be completely reliant on transaction fees in order to pay for their mining costs.
Transaction fees are dependent on transactions actually occurring on the bitcoin network. So at a certain point in the future, if the ETFs were to horde all the bitcoin, then there wouldn’t be many network transactions.
That in turn means miners would shut off their machines, and the bitcoin network would cease to exist.
Now, for multiple reasons, I don’t think we’ll ever get close to a scenario like this. But I nevertheless appreciate Hayes’ call to action. We do need to educate ourselves about how to properly self-custody our own bitcoin, and then do it. And we should encourage others to do the same.
The more people that elect to do the above helps ensure the health and independence of the bitcoin network. The authoritarians indeed want to destroy bitcoin, and we can’t let that happen.
Solana and Metis Get the Christmas Pump
Hopefully you weren’t obsessively checking prices over the Christmas holiday, so let me update you on what happened earlier this week.
On Monday, SOL broke above $125. Prices have since cooled a bit, but hot damn! SOL is now the 4th largest crypto by market cap and is up more than 1000% since the beginning of 2023.
Analysts attribute Solana’s ascendance to good-ole crypto mania…
Hi! My name is Lark Davis!
I’m a cryptocurrency investor with years of experience and I’ve been making consistent profits in the crypto space.
I’m passionate about helping others do the same, so I run multiple educational channels on crypto investing.
