Bloomberg crypto market analyst Jamie Coutts says that Bitcoin (BTC) may be at risk of being taken over by the powerhouses of the legacy financial system.
Addressing his followers on social media platform X, Coutts shares data showing that BlackRock, the world’s largest asset manager, began getting proxy exposure to Bitcoin in 2020 via shares of mining giant Marathon Digital.
He says BlackRock’s move may have foreshadowed its recent application for a spot Bitcoin exchange-traded fund (ETF).
“In hindsight, BlackRock’s massive Bitcoin spot ETF play shouldn’t have been that surprising. Along with other behemoths (Vanguard, StateStreet) who espouse ESG (environmental, social and governance)-driven investing principles, they started scooping up public mining stock back in 2020.
BlackRock began investing in Marathon Digital, the second-largest publicly traded miner, three years ago when hostility to mining was fever-pitched – perhaps due to the industry’s heavy reliance on fossil fuels at the time (or for other reasons…)”
The analyst says that the biggest asset managers in the world have now emerged as the dominant investors of the three biggest publicly traded Bitcoin miners, accounting for roughly 8.9% of all hash power.
Coutts says that such an “institutionalization” of Bitcoin may bring new challenges, such as the larger players not having the same goals and interests for the network as the smaller entities.
“This shouldn’t be taken as FUD (fear, uncertainty and doubt) – a “51% attack”, in which actor/s control most of the hash rate, is not on the cards – the economics and rationale do not make sense. However, there may be a risk of creeping influence that might conflict with the values of the network.
This conflict could involve misaligned ESG objectives or potential censorship of transactions. Neither would prevent the chain from operating; other miners could process censored transactions (while collecting the fees).
But, given the activist tendencies of these big asset managers, it remains unclear if their intentions toward Bitcoin miners will be passive in nature.”
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