Why Bitcoin’s Institutionalization Is ‘A Concern’
Bitcoin‘s (CRYPTO: BTC) transition from a decentralized digital asset to one dominated by institutional players has introduced a new set of risks.
What Happened: With Bitcoin exchange-traded funds (ETFs) in the U.S. now holding over 1 million tokens—equivalent to 5% of its total supply—the cryptocurrency is increasingly controlled by financial institutions and even governments, reshaping its original decentralized ethos, Bloomberg reported.
The establishment’s growing control over Bitcoin is evident in the push for a U.S. government Bitcoin reserve.
A proposal by Wyoming Senator Cynthia Lummis suggests selling Federal Reserve gold to purchase 1 million bitcoin, potentially doubling the government’s existing holdings acquired through asset seizures.
While President-elect Donald Trump has not yet endorsed the bill, his pro-crypto stance has heightened expectations for such a move.
Mark Connors, founder of Risk Dimensions, warns of potential consequences saying, “Will this be a risk of being concentrated by existing G-10, G-20 countries or institutions like BlackRock? This is a concern, especially for the purists.”
Bitcoin’s appeal to …
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