With the surge in spot Bitcoin ETF applications, Wall Street is poised to engage directly with Bitcoin. While traditional financial institutions are likely to promote it as a risk-off safe-haven investment, ETFs offer a different type of Bitcoin investment than what’s available on a traditional crypto exchange. Spot Bitcoin ETFs are not offering a decentralized, censorship-resistant bearer asset.
Dave Birnbaum is the product director at Coinbits, a Bitcoin investment platform, and a prolific inventor, with patents in fintech, VR, communications and more. David Waugh is a business development and communications specialist at Coinbits. He previously served as managing editor at the American Institute For Economic Research.
Wall Street cannot market these values of Bitcoin because it cannot offer them. However, companies specializing in Bitcoin technology and custody can use Wall Street’s marketing campaign to highlight their comparative advantage and gain market share. These Bitcoin companies should plan for such marketing, identify the gap between the ETF narrative and reality, and capitalize on the difference.
“There’s blood in the water. Let’s go kill!” screamed former CEO John Mack on Morgan Stanley’s trading floor in the 1980s. Although new regulations and a softer corporate environment have tamed its culture, Wall Street’s objective remains the same: earn money selling financial products. A spot Bitcoin ETF is no different.
Selling Bitcoin products poses a unique challenge for these incumbents because it forces them to promote a technology that threatens their role as financial intermediaries. And so they must create products that capture Bitcoin’s allure while obscuring its core tenets. Think of it as “Bitcoin Lite”: digestible for investors, tamed for regulators, and lucrative for issuers. It’s a narrative that turns Bitcoin from a revolutionary tool to just another item on the financial menu.
Drawing upon proven marketing narratives for existing ETFs, Wall Street marketing teams are already formulating narratives about why people should buy shares of a spot Bitcoin ETF.
What are they likely to be?
Narrative 1: “If you hold bitcoin in self custody, your coins could be lost or stolen.”
Wall Street will weave a narrative about Bitcoin ETFs based on the successful promotion of…
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