Will The Big Players From Tradfi Control Crypto ?

Arthur Hayes Warns of Traditional Finance Aiming at Bitcoin and Crypto

BitMEX's Arthur Hayes believes big traditional finance companies, called TradFi, want to take control of the Bitcoin and crypto world.

Hayes wrote in a blog that many old financial businesses are interested in crypto, especially after some crypto firms failed. The main question is not about crypto, but who controls it. These old finance groups became friendly with crypto when they saw their competitors fail.

Banks think the government will control their money. They want to be sure that they have power over crypto, which can protect against inflation. TradFi banks will create products like crypto ETFs. These let clients exchange regular money for a type of crypto money. Since these banks are the only ones offering this, they can charge high fees. If crypto becomes more powerful in the future, these banks can recover any losses they had before by being the main gatekeepers for crypto.

Hayes warns that these banks and rules might limit how people use their crypto. They might be forced to change their crypto into regular money every time they want to use it, making them rely more on big banks.

He also says that BlackRock, a huge asset management company, might try to get a lot of control over Bitcoin's network and the process of creating new Bitcoins, called mining.

A big concern is if we can keep the original spirit of Bitcoin when there's so much money from traditional finance in it. Larry Fink, the head of BlackRock, doesn't care about shared power. He likes keeping assets at BlackRock. If BlackRock and similar firms have a lot of influence, they might change how Bitcoin works. They might also influence other companies that help create new Bitcoins.