Ki Young Ju admitting he was wrong? Good. Humility is rare in crypto. His reason is a glimpse into what is a radically different Bitcoin market, courtesy of TradFi. This welcome shift should spark more than guarded optimism. It should spark fear.
For decades, I’ve been exploring the dark underbelly of financial systems. What I’m interested in is where good intentions go wrong. This strategy of cozying up to TradFi – I mean, that just sounds like mischief.
Decentralization At What Cost?
Bitcoin's original allure was simple: freedom. Freedom from the ability for anyone centralized to control, to have governments manipulate currencies, or banks to skim on top. It was a digital MF you to the 2008 financial crisis.
Daily ETF volumes are nearing $10 billion. Institutional investors are calling the shots. MicroStrategy is practically synonymous with Bitcoin. And, truth be told, governments are sharks, ready to bite — or regulate and control.
Is this progress? Or is it a more gradual, pernicious centralization lurking behind the mask of adoption? In the process, we buffoonishly wind up ceding real ownership. Instead, we accept the charade of engagement in a rigged game run by the same players we first sought to flee from. This just seems like the worst kind of selling your soul to get a seat at the table.
S&P 500 Correlation A Red Flag?
Bitcoin mirroring the S&P 500? That’s not merely a market trend, that’s a warning siren. It means Bitcoin is becoming just another speculative asset, disconnected from its original purpose.
Think about it. When the stock market sneezes, Bitcoin gets pneumonia. We're supposed to believe in Bitcoin because it's different – a hedge against traditional economic woes. If it's just another line on a Bloomberg terminal, what's the point?
The recently elevated correlation means Bitcoin’s price is increasingly determined by the same macroeconomic forces that drive other traditional assets. This makes it susceptible to all the same crashes, bubbles, and market manipulations that now afflict Wall Street. Remember 2008? Or are we fated to see it play out again, with Bitcoin cast as a new supporting character?
It’s not just technocratic numbers and charts, though this is very important, it’s about who is in charge of control. Whose hands are on the levers now? Are they the hands of the citizenry, or are they the hands of the deep state?
Financialization Or Betrayal Of Ideals?
The danger of Bitcoin becoming completely financialized is very real. It starts with ETFs. Next, we bring in derivatives and other complex financial instruments. In this dystopian future, Bitcoin is no longer a decentralized currency—a store of value and vehicle for financial inclusion.
We risk betraying the core ideals of Bitcoin: peer-to-peer transactions, censorship resistance, and financial inclusion. Imagine a future where Bitcoin is so entangled with TradFi that it becomes subject to the same regulations and restrictions that stifle innovation and limit access to financial services for marginalized communities.
What about the unbanked? The billions of developing world inhabitants who consider Bitcoin their greatest hope? Will they take advantage of the institutional inflows coming through and into ETF volumes? Or, will they instead get shut out, unable to enter the market due to complex trading algorithms and outrageous commission costs?
We need to ask ourselves: what kind of future are we building? Are we building a world where Bitcoin gives power to the people or where it just backs the new boss with the same old tokens?
The Path Forward?
Instead, we need to advocate for projects that prioritize decentralization, privacy, inclusion, and financial freedom. What we don’t want to do is fund developers who are just creating applications that are only designed to help institutional investors get in on this market. Let’s demand that the companies and people building Bitcoin’s future be more transparent about their efforts. Then we need to demand accountability for what they choose to do.
It’s not too late to return Bitcoin to its original vision. But it requires a conscious effort to resist the allure of TradFi and to build a more equitable and sustainable financial system.
Are you ready to fight for it?
