ETF Euphoria Shows Bitcoin Needs Wall Street After All

It’s the moment the crypto world has been waiting for: The Securities and Exchange Commission (SEC) has finally approved the first spot Bitcoin exchange-traded fund (ETF) in the United States.

Is this mainstream-friendly investment vehicle at odds with Bitcoin’s original goal of breaking away from Wall Street? Absolutely. Is that same ETF also necessary for crypto to grow? Also yes. The crypto industry has simply not been able to reach mainstream adoption on its own.

That’s why, despite the obvious contradictions, much of the crypto community has been eagerly anticipating this ETF for years. The SEC turned down application after application, but recently the tide started to turn. We never know for sure what drives up the price of Bitcoin, but ETF euphoria has been a pretty good guess. Bitcoin rallied nearly 160% in 2023 and has gained 50% in the last six months alone, a surge widely acknowledged to be driven by ETF dreams.

So let’s just take a moment to talk about the elephant in the room. Bitcoin’s pseudonymous founder Satoshi Nakamoto created the world’s first major cryptocurrency specifically to decrease reliance on financial institutions. Bitcoin’s invention followed the 2008 financial crisis and the related collapse in trust in the banking system. The very first sentence of the Bitcoin white paper abstract envisions “a purely peer to peer version of electronic cash [that] would allow online payments to be sent from one party to another without going through a financial institution.”

Read more: What Is a Bitcoin ETF?

In other words, Bitcoin was designed to be everything an ETF is not.

An ETF gives investors exposure to bitcoin in their traditional brokerage accounts via the stock market. The institutions applying for ETFs include Blackrock, Grayscale and Fidelity, the very “intermediaries” that Satoshi Nakamoto wanted to eliminate.

Then there’s that favorite phrase of crypto purists, “not your keys, not your coins.” This basically means that if you are holding bitcoin on a crypto exchange as opposed to in your own wallet, for example, then that bitcoin is not truly yours. ETFs introduce yet another degree of separation. Investors in an ETF aren’t even buying actual bitcoin, they are just buying price exposure to that bitcoin.

And finally, there was…