Arthur Hayes is wary of Bitcoin ETF, believing it could pose threat to Bitcoin network

Arthur Hayes, founder of BitMEX, published an article analyzing topics such as Federal Reserve policy changes, permissioned decentralized finance (Permissioned DeFi), real world assets (RWA), and Bitcoin ETFs. Hayes believes that Bitcoin and cryptocurrencies are the best way to combat the devaluation of legal currencies. He compared them with gold, the S&P 500 Index, and the Nasdaq 100 Index, pointing out that Bitcoin’s performance since 2020 has far outperformed other risks. assets. When discussing the Fed's policy changes, Hayes pointed out that Fed Chairman Powell had emphasized the need to raise interest rates to combat runaway inflation in the post-epidemic period. However, based on recent statements and actions, the Fed's policy seems to have changed significantly and it is beginning to consider a possible interest rate cut in 2024. This reflects the direct impact of the current political situation in the United States on the Fed's policy. Hayes analyzed that this change in policy may stem from pressure from political leadership, especially in a major election year. Hayes is critical of permissioned decentralized finance (Permissioned DeFi), calling it “one of the most ridiculous crypto topics right now.” He believes that this financial model that combines centralized and decentralized elements violates the core principle of decentralization and may be just another way for TradFi institutions to try to take advantage of retail investors. The fact is that there won’t be a sufficient number of retail traders using these permissioned DeFi primitives because they don’t need to trade with institutional investors. Regarding the tokenization of real-world assets (RWA), Hayes believes that this attempt, although it sounds good, will face many challenges in actual operation. He specifically pointed out that tokenizing assets such as real estate and bonds may be difficult to succeed due to a lack of standardization and liquidity. He also said that purchasing low-liquidity RWA tokens is at your own risk, but a worse use of capital is to invest in the governance tokens of the RWA issuance platform itself. Finally, Hayes expressed reservations about Bitcoin ETFs. He said that if an ETF is held in large quantities by traditional financial institutions and stores Bitcoin without utilizing the Bitcoin blockchain, it could pose a threat to the value and existence of Bitcoin. If it ends up being that a handful of companies hold all the Bitcoins and have no real use for the Bitcoin blockchain, so the Bitcoins never move again. The end result is miners shutting down because they can no longer pay for the energy required to run their mining rigs. Without miners, the network would stop functioning and Bitcoin would die.