Market Expert Slams Spot Bitcoin ETFs As “Giant Mistake”, Here’s Why

Since its launch in January, Spot Bitcoin ETFs have been growing steadily, gaining widespread adoption amongst investors and traders. However, despite its surging popularity, Jim Bianco, President and Macro Strategist at Bianco Research, has expressed his beliefs that launching Spot Bitcoin ETFs was a “Giant mistake”. 

The renowned Wall Street professional has highlighted substantial shortcomings in the digital asset, emphasizing the adverse effects Spot Bitcoin ETFs could have on the advancement of the world’s largest cryptocurrency, BTC. 

Spot Bitcoin ETF “Is Not Decentralized”

On Friday, January 16, Bianco appeared In a YouTube interview alongside Investing Journalist and podcaster Natalie Brunell and Danielle Dimartino Booth, CEO and Chief Strategist at QI Research. 

When Brunell inquired about Bianco’s outlook on Bitcoin’s performance in the next five to ten years and his perspective on it as an investment, Bianco expressed strong optimism for BTC in the long term. The Macro Strategist conveyed his confidence in BTC as an alternative financial system. However, he raised concerns about the recently launched Spot Bitcoin ETFs posing potential risks to BTC as a decentralized asset.

Bianco labelled Spot Bitcoin ETFs as an “ambition of failure,” explaining that while ETFs may push the price of BTC to around $60,000, they would not propel it to $1 million. He also underscored a lack of decentralisation and immutability in Spot Bitcoin ETFs, expressing concerns that they could become entangled in the centralized system.

The Macro Strategist has argued that if Spot Bitcoin ETFs get “sucked into the centralized system,” it would grossly violate BTC’s core principles as a decentralized digital asset, uncontrolled by any central entity. 

“Relying on the spot BTC ETF is putting all of BTC at risk from the same centralized leviathan it is trying to get away from,” Bianco stated. 

BTC price above $52,300 | Source: BTCUSD on Tradingview.com

Bianco President Warns Of SEC’s Influence On Spot ETFs

During the interview, Bianco also voiced apprehensions regarding the United States Security and Exchange Commission’s (SEC) potential influence on the growth of Spot Bitcoin ETFs. 

The macro strategist disclosed that as Spot Bitcoin ETFs are purchased through regulated brokerages and listed on the New York Stock Exchange, it provides Gary Gensler, the US SEC Chair, with opportunities to impose countless rules and regulations on ETFs.  

The macro strategist anticipates that if Spot Bitcoin ETFs grow substantially, it will compel regulated brokerages and ETF providers to adhere to regulations strictly. He also suggested that while these digital assets would push the price of BTC to new all-time highs, the market would still be undervalued. 

According to Bianco, BTC is poised to achieve an even higher potential if more innovative measures are adopted in the Decentralized Finance (DeFi) landscape.

Featured image from Yahoo Finance, chart from Tradingview.com