Here’s Why Arthur Hayes Is Not In Support Of A BlackRock Spot Bitcoin ETF

Many stakeholders in the crypto industry have welcomed the idea of traditional finance firms offering a Spot Bitcoin Exchange-Traded Fund (ETF) as they believe it will further drive crypto adoption. However, the former CEO and co-founder of crypto exchange BitMEX, Arthur Hayes, seems to be against the move.

In a post published on his Substack platform, Hayes made his displeasure known regarding the recent wave of Spot Bitcoin ETF applications by prominent traditional financial (TradFi) institutions, including BlackRock.

Contrary to public opinion, he doesn’t believe these TradFi institutions are bullish on crypto. Instead, they are moving to become “crypto gatekeepers” to balance their deposit base, explaining that these companies intend to offer ETFs or any similar investment product with crypto as its underlying asset to achieve this. 

He stated that since these fund managers will be the “only game in town,” they can charge investors enormous fees in exchange for their investment products.

According to him, institutions like BlackRock recognize that cryptocurrencies can be used to hedge against inflation and could have a significant impact on the economy going forward. So they want to have it “under their control” when that happens.

He believes the only times these firms have done a “good job” is to paint the crypto industry and cryptocurrencies in a bad light to the government. As such, they will have a hard time changing the narrative to circumvent the federal government’s proposed inflation tax on bank depositors.

The Bitmex founder suggested that the United States Securities and Exchange Commission’s (SEC) clampdown on the crypto industry was never about the technology itself but who owned it. 

He believes those who had earlier tried to get a Bitcoin ETF approved faced disapproval based on their status. However, the regulator seems more welcoming to the idea because of the prestige of BlackRock and its CEO, Larry Fink. 

Hayes noted that the banks and financial regulators could collaborate to uphold the dollar’s sovereignty. According to him, this can be easily achieved by both parties agreeing to ensure that all crypto redemptions are made in the US dollar and not the “physical crypto” itself. 

These US dollars will then be put back into the banking system, which he believes is already compromised. 

Hayes is more concerned that all this goes against Satoshi’s vision of creating a decentralized financial system and he believes BlackRock’s CEO Larry Fink doesn’t care about decentralization. 

He highlighted that Fink and BlackRock’s business model is built on centralization, adding that asset managers like BlackRock do not add value to the Bitcoin Improvement Proposals, such as increased privacy or censorship resistance. 

Instead, these asset managers moving to offer ETFs means they have more control over large voting blocks and can affect governance decisions.