Could BlackRock Destroy Bitcoin?

Learn how to buy anonymous Bitcoin and do coinjoins:

In this video, I discuss possible downsides to BlackRock becoming a large player in the Bitcoin ecosystem.

What happens if BlackRock accumulates a lot of Bitcoin and then loses all of it, such that it is no longer accessible (private keys have been lost)?

In that case, BlackRock has just made a large pro-rata donation to the whole Bitcoin network and Bitcoiners like ourselves.

Could BlackRock issue a lot of "paper Bitcoin" and thus suppress the price of Bitcoin? Possibly, but then so can anyone else.

BlackRock is economically incentivized NOT to suppress the price of Bitcoin, if it wants the largest AUM and hence the most fee revenue as possible.

BlackRock could of course be forced by a hostile outside actor like the US gov to create a lot of paper Bitcoin to suppress the price.

One thing is certain though:

-- Central banks are not going to want to hold paper Bitcoin.
-- Nation-states are not going to want to hold paper Bitcoin.
-- Billionaires are not going to want the counter-party risk that comes with holding paper Bitcoin.
-- Serious Bitcoiners are not going to want to hold paper Bitcoin.

Issuing paper Bitcoin also comes with huge risks. If enough people ask to convert their paper Bitcoin into real Bitcoin (i.e. withdraw from BlackRock's ETF) and BlackRock doesn't have enough real BTC, then they will need to go into the open market and buy real BTC. The resulting spike caused by this short squeeze could easily bankrupt BlackRock.

It's much more difficult to suppress the price of an easily portable digital commodity than it is to suppress the price of a bulky physical commodity like gold. Taking delivery of BTC takes 10 minutes. Taking delivery of physical gold takes a lot more time, money, and coordination. It is also much easier to verify/assay Bitcoin and provide proof of reserves than it is with physical gold.

BlackRock could also fork Bitcoin and create its own proof of stake version. However, they cannot force Bitcoin node operators to run this new software or hodl the new tokens. I would take any PoS BTC tokens issued to me and dump them for real proof of work BTC. Something similar happened with BCH, which made that hard fork unsuccessful. I would also never run a PoS version of Bitcoin on my nodes.

The PoW fork of Bitcoin (i.e. real BTC) will not be just for pirates and El Salvador. It will be for anyone who doesn't want BlackRock to control their money, like:
-- Freedom-minded individuals
-- Billionaires seeking to escape the tentacles of the US
-- Nation-states
-- Foreign central banks

That's a lot of capital, and it's not going to want to house itself inside of a BlackRock or US gov walled garden.

Finally, under a proof of work protocol, owning more BTC does NOT give you additional control over the protocol. In a proof of stake protocol, it does. For that reason, Ethereum better hope that BlackRock never comes out with an ETH ETF lol.

Not investment advice! Consult a financial advisor.

BlackRock Blessing Bitcoin (Super Bullish):

Satoshi on lost coins:

Croesus on FTX paper Bitcoin:

The Dangers Of "Paper Bitcoin":

Chris Blec on BlackRock attack on Bitcoin:

BlackRock discussing hard forks in prospectus:

I am not being paid or otherwise compensated by any company or cryptocurrency project that I mention in my videos. My opinion is not for sale. Please do not contact me with any affiliate or advertising deals.

#Bitcoin
#blackrock

Disclaimer

[Bitcoin_University]

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[Atlas_]

This was a much needed video for all the new FUD being spread about this topic. Hope it goes viral.

[tampabayrodeo]

Inflation hits people a lot harder than a crashing stock or housing market as it directly affects people's cost of living that people immediately feel the impact of. It's not surprising negative market sentiment is so high now. We really need help to survive in this Economy. The ETF/Equity market keeps swinging.

[Lakeland]

Great video!! Nailed it. Just buy and hold bitcoin don't worry about price. Bitcoin is a peaceful revolution

[gerardroeterdink]

Great video, Matt! I just see two more (at least) theoretical risks that you didn't mention if Blackrock and partners were to create a PoS hard fork of Bitcoin :
1) If Blackrock were to force a large majority of the mining companies (e.g. by becoming their largest shareholders) to implement the new code, wouldn't that mean that the hashrate of the existing network with the classic code would go down substantially and therefore its protection against a 51% attack?
2) If a PoS variant of Bitcoin were to come into existence, governments could decide to make ownership of PoW Bitcoin and other PoW crypto illegal in the name of 'climate change' and 'energy efficiency'. As an illegal coin in the jurisdictions of those governments this would most likely decrease adoption. Such a proposal to ban PoW blockchains was already initated in the EU but in the end didn't reach a majority. Nevertheless someone could bring it up again later...

What's your take on that?

[TopShelfMontana]

We need more channels like this one where logic, reason, and critical thinking are used to evaluate the space. Using those tools leads someone to the reasons for Bitcoin only.

[andrewvader]

Thanks for the continued education I watch your videos from start to finish. It also helps you remind us the thumbs-up button 😅

[gcpc]

Thanks, Matt. You laid out the potential pitfalls + solutions.

[rammuh]

Thank you for your objective views on the whole topic!

[schauflik.]

Thank you for shining light on both sides of the topic!

[Rakyta_btc]

Been subbed for awhile. Love your Videos. Gotta play devils advocate real quick tho about the hard fork argument: I was an early supporter of ETH, mined ALOT over the years, and when they forked I was in the EthPow camp. What I saw was that the group wanting the fork had much more capital than us miners, so they ended up doing what YOU just suggested, they dumped all their ETHPOW onto the market a crashed the price. Now no one uses EthPow. What I'm saying is if Blackrock (and all followers) have more BTC then the rest of us at that point, they will simply crash the price by selling the majority of the BTC on the network.

[stevedre]

What's happening is the retail consumer is realizing that they do not need Blackrock or anybody else for the matter to manage their wealth particularly when it comes to the novelty of BTC. This is the mainstream concept that is slowly and finally catching on. AND Blackrock, Fidelity, etc. are very nervous. Their existence is questionable.

[digitaldeepak]

Why would someone buy Bitcoin ETF and not buy real BTC and store it in a multi sig cold wallet?

[RufusROFLpunch]

I think the fork danger is worse than you give it credit. If a few mega-institutions are the economic majority, they could exert major pressures and apply long term propaganda efforts to make favorable changes to Bitcoin. We know BlackRock is more than capable of that, it’s a primary business operation for them.

This was always going to happen, however. This stage of Bitcoin is an inevitable growth hurdle. We need to get past it.

[Jizzle]

Matt, what’s to stop Blackrock “incentivising” the nodes/miners to run PoS (or a new code) at a level far greater than what they currently make from PoW, especially after each halving?

[sharpenedge]

Can you make a short video explaining how a spot ETF works, in some detail?

[joeharvie]

Thank you for great clear insightful information Matthew!

[billyjean]

Retail to 25k (2009-2023)
Funds to 10m (2023-2030)
Central Banks to Billions (2030- beyond)

[simonroberts]

Hi Matthew, there has been a huge amount of interest in this news, most claiming that the BTC price is going to rocket. People like Adam Cochran have claimed that gold went up between 2004 and 2011 due to the GLD ETF being started in 2004, but this ignores the huge amount of money printing that took place to bail out the banks in 2008 and the EUR in 2011. Secondly, if you buy a share of GLD, you can only sell it for USD - in other words it is a cash claim in the fund. Balckrock may be evil, but they will never be stupid enough to allow you to swap shares in a BTC ETF for anything other than USD to mitigate the risk you described in your video. Even if the fee structure is based on AUM and therefore price, that price still has to be sufficiently low to encourage new investors to buy shares which leaves me wondering just how much Blackrock will short the market to suppress the price. While I think BTC will rise in price, I’m not ordering the Lamborghini just yet! Any thoughts on BTC price manipulation/ suppression would be much appreciated. Many thanks for all your great work and the insights it brings to investors like me.

[dexinvictus]

I was pretty damn bullish already but now I'm FUCKIN bullish