If more people do not sell, that means the price will go up as it would become scarce. I do not know how this would be negative for bitcoin but positive because if bitcoin become scarce, satashi (sat) will not become scarce but become more valuable. You do not have to buy 1 BTC.

Arthur Hayes made a valid point considering the fact that spot ETF would be based on derivatives with transactions that aren't recorded on chain. I didn't look at it from this perspective but it's a valid point. The reason i don't think it would matter so much is because this would only become a  matter for concern a century from now when the Bitcoin block rewards cease to exist and miners have to settle for transaction fees to make ends meet let alone, make anything close to what they earn when block rewards still exist.

I think that is a pretty silly take on ETFs.

First of all the vast majority of bitcoin will not be held in ETFs.

And I think it is pretty clear that not enough bitcoin transactions occurring on-chain is not a future worth worrying about. In fact, we have the opposite problem. People already complain about block space being too limited today (just look at any one of the hundreds of complaining threads started this year on tx fees) while Bitcoin adoption is still very early. When Bitcoin adoption is 10x or 20x what it is today, and bitcoin actual usage is 100x or 1000x what it is today, a million or even a few million bitcoin held in ETFs doesn't change anything to alleviate the block space crunch, and its laughable to say it would actually reverse the problem creating the opposite problem.

Most transactions in the future will be done off-chain on L2s, not because people will just be using bitcoin as a TradFi investment vehicle through ETFs (though obviously there will eventually be trillions of dollars of bitcoin held in ETFs), but because people will be forced off-chain due to transaction costs, which is precisely how Bitcoin was designed.


Hayes is literally worried about the opposite of reality haha, doesn't make any sense.

I agree that this is really a valid point and since I believe that ETF approval is already coming it would be interesting to see how things will play out in the years to come. I am also wondering if by the time when mining rewards will end if there would be a big scarce of miners to participate in the network...anyway all of these things can still be classified as speculations but I am hoping that ETF will be a good thing for BTC and not the other way around.

Half a valid point I'd say. As of today you can also buy Bitcoin derivatives without buying the actual Bitcoin and only as an investment, which is what he is concerned about. And it hasn't been the end of the world. That ETF spots can delve further in that direction? Maybe, but there will still be a lot of people transacting with the real Bitcoin.

It's probably the demise not of bitcoin but more like the demise of the future potential whales, they would be getting less bitcoin value for their money compared to how much the older whales have spent. I mean there's a lot of us retail investors right now and with ETFs potentially pumping up bitcoin, it's a possibility that if it goes up and people still think it can go higher then they'll hodl more and the whales that's trying to accumulate more will be paying for so much than they should and it ends with a lot of us retail investors selling at a really profitable price.

I disagree with the thought that EPF will destroy Bitcoin. There is no way Bitcoin can be destroyed just because a centralised ETF is available in the market. Every precious metal has multiple ETFs, did it destroy the physical precious metal market? Not at all!

Rather the most concerning issue is the height transaction fees. If that isn't fixed soon enough, Bitcoin will surely suffer from decreasing adoption rate. Bitcoin is mainly used as an investment but some people definitely use it as a payment method. The transaction fees is a pain right now. That needs to be fixed on priority by expelling the ordinals from the network.

The only way there's too little transactions to sustain the sufficient level of hashrate is if Bitcoin becomes unpopular and falls into obscurity. ETF just can't put all coins into centralized hands, and there will still be a lot of activity on the network regardless if it will be private users or institutions. The current fee spikes caused by ordianals is just a glimbpse of what will come when there will be more players on the market with deep pockets, because they will come with increased on-chain activity.

That's his opinion and that's fine.
Everything can have a positive impact and a negative impact and vice versa.
Even Bitcoin has a positive and a negative impact on the society and the economy. So there's nothing new when somebody points out the negative impact of something. What we should look at is how the positive impacts weigh against the negatives.

In my opinion, what would be the demise of Bitcoin are ordinals.
Bitcoin NFTs should never have been allowed to happen on the same network as Bitcoin. It has made things so difficult for the average Bitcoin user to use Bitcoin.
This discourages people from Bitcoin because transactions because expensive and take more time.
It doesn't matter if Bitcoin is a global legal tender when it's more expensive and more time-consuming than other payment methods.

the more immediate threat is the numbskull's telling people to stop using bitcoin now and instead lock their value into channel hubs/factories(custodians) of subnetwork fund managers. where funds will be unlocked by the fund manager after X months(after the customer of the custodial wallet has spent all their 'inbound balance')

this will be the true path that corporations will accumulate majority of coin supply

most subnetwork nodes are designed to be annoying to sway people into using custodian managed lite wallets

the bitcoin network is becoming annoying to use due to corporate sponsored junk tactics to sway people away from self managing value onchain and using centralised services and subnetworks to avoid the annoyances caused by sponsored devs

..
as for the fear of miners diminishing returns.. the spot market economics of deflation will continue to compensate miners smaller sat rewards for many many decades. so is not a fear to concern your minds about for many decades

we should not be trying to over compensate miners now with silly fears of many decades in the future. because paying more fee's now is more reason people will stop transacting daily onchain

even if just 2mill btc was circulating and 19m were locked to custodians

if blocks were
2028: Reward=1.56250000 (1btc=$400k:=$0.625m)
2032: Reward=0.78125000 (1btc=$800k:=$0.625m)
2036: Reward=0.39062500 (1btc=$1.6m:=$0.625m)
2040: Reward=0.19531250 (1btc=$3.2m:=$0.625m)
2044: Reward=0.09765625 (1btc=$6.4m:=$0.625m)
2048: Reward=0.04882812 (1btc=$12.8m:=$0.625m)
2052: Reward=0.02441406 (1btc=$25.6m:=$0.625m)
2056: Reward=0.01220703 (1btc=$51.2m:=$0.625m)
2060: Reward=0.00610351 (1btc=$102.4m:=$0.625m)
2064: Reward=0.00305175 (1btc=$204.8m:=$0.625m)
2068: Reward=0.00152587 (1btc=$409.6m:=$0.625m for 0.00152587)

in 2068 total fees of blocks only need to be 152587 sat to double the reward where a block gets $1.25m total ($180m a day network security cost total)

meaning with say 2m coins circulating at a 1% fee it only needs
160,000 tx a block paying 1sat fee each ($4) to move value of $400+

where if users were only holding say $100k of value each (0.00025000)
2m coins (2000000.00000000) is enough for 8,000,000,000 users

and again before a numbskull chimes in about 160k tx is alot of blockspace needed.. this is not something we need to leap to in 1 year
we can easily decludge and make tx in blocks lean to get to 16k tx average without scaling blocks
then over next 40 years to scale the blocks by only 10x

so dont chime in shouting it needs gigabyte blocks by 2024 to dissolve numbskull fears

..
also any numbskull that thinks the network needs billion dollars a day network security doesnt understand bitcoin

many people need to buy machines that operate for 2 year lifespan, not one day.. . meaning the actual cost is actually 131billion cost of devices with 2 year shelf life(replaced every 2 years)

no single entity will be able to buy $131billion every 2 years to outpace the network.
and the network can mitigate risk by having lots of pools of only 10% of the network per pool where miners can jump if one pool does anything nefarious