By Susie Violet Ward · Forbes · 10 November 2023
As institutions prepared to gain exposure through spot bitcoin ETFs, the article argued that reliance on custodians risked creating “paper bitcoin”, with claims on bitcoin potentially exceeding the coins actually held, as in fractional reserve banking. Robert Breedlove of the What Is Money Show, interviewed at The Ned in London, said that truly owning bitcoin meant holding your own private keys: “not your keys, not your coins.”
Industry figures argued that people should be free to choose ETFs, but questioned why anyone able to hold bitcoin directly, without counterparty risk, would choose otherwise. Arthur Hayes, co-founder of BitMEX, warned Blockworks that a very large BlackRock ETF could harm bitcoin by locking up immovable coins, while Greg Foss saw institutional adoption as inevitable and mostly favourable. The article points to Mt. Gox and the LIBOR scandal as warnings about custody and manipulation.