The pending approval of Bitcoin exchange-traded funds (ETFs) by the US Securities Exchange Commission has been enthusiastically awaited by the crypto industry, with many expecting these regulated vehicles to propel prices higher and confer greater mainstream credibility. However, Bitcoin OG Max Keiser claims a coordinated “bait and switch” is brewing behind the scenes.
Bitcoin “Bait and Switch”
Keiser’s suspicions over a “bait and switch” stem from observing the unusual “coordination and cooperation” between legacy money managers and regulators to push Bitcoin ETFs through.
In 40 years of finance I’ve never seen such coordination and cooperation by so many financial institutions working hand-in-glove with regulators & politicians as I’m seeing with the coming wave of #Bitcoin ETF’s.— Max Keiser (@maxkeiser) December 21, 2023
I think we may be in for an unwelcome surprise.
While that may not have triggered alarm bells, Keiser laid issue with the recent application amendments that agree to cash settlement terms. Specifically, Keiser stated that cash settlement means ETF investors have “no claim on actual BTC,” essentially making the ETF products “a fiat-money version of Bitcoin.”
Tying the dots together, Keiser highlighted that the simultaneous bid to “ban self-custody” and the timely forfeiture of over 69,000 Bitcoin from the Silk Road prosecution to the US government further roused his suspicions of ETF foul play.
“If this is true, it’s exceptional due to the size of this highly coordinated bait-and-switch by Wall Street & Washington,” commented Keiser.
The concerns voiced by Keiser echo larger ongoing debates within Bitcoin circles that several other prominent figures have previously raised.
Trojan Horse Take Over?
Recently, the heightened anticipation of Bitcoin ETF approvals, particularly as expectations of price appreciation take hold, has overshadowed earlier warnings from prominent community figures.
In November, BitMEX co-founder Arthur Hayes commented that Bitcoin ETFs “could herald a situation that we might not actually like in the end.” Hayes raised concerns that BTC ETF products hand massive controlling influence, which may not align with retail investors, to “agents of the state” such as BlackRock and Fidelity.
“If we need certain types of upgrades to enhance the privacy, enhance the encryption, to make sure it maintains this rock solid cryptographically hard monetary asset, those interests are not aligned with the TradFi status institutions,” warned Hayes.
Similarly, podcaster Peter McCormack echoed Hayes’ comments by saying the centralization risk presented by BTC ETFs will be good for price but overall “bad for Bitcoin.”