BlackRock is buying Bitcoin miners while awaiting Spot ETF approval, is it gaining too much control over ecosystem? - George Gammon
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(Kitco News) BlackRock – the world’s largest asset manager and a leading contender for a Spot Bitcoin ETF – is now reportedly getting into Bitcoin mining, and so much focus on the Bitcoin ecosystem from big Wall Street players might be dangerous for the world’s largest cryptocurrency, according to George Gammon, an investor, macroeconomics expert, and host of the Rebel Capitalist Show.
BlackRock’s latest investment into four of the five largest Bitcoin miners by market cap was worth around $411 million, making it the second-largest shareholder of those mining stocks, according to Finbold, which cited CNN data. BlackRock’s increase in holdings also boosted its influence in the Bitcoin Mining Council (BMC) - an American Bitcoin mining lobby group.
Prior to that, BlackRock applied for a Spot Bitcoin ETF in June, and given its near-perfect record for ETF filing approvals, it is seen as a top contender in securing this one as well.
The market is now carefully watching the U.S. Securities and Exchange Commission's deadlines to approve, reject, or postpone several spot Bitcoin ETF filings. On Thursday, the SEC announced a delay in its decision regarding the applications by BlackRock, Valkyrie, Invesco, and WisdomTree, pushing its ruling until at least October. Earlier, the SEC had already delayed its decision on the ARK 21Shares Bitcoin ETF application.
Speaking to Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News, Gammon expressed concern that financial instruments like ETFs based on Bitcoin could harm Bitcoin’s original purpose to allow for decentralization of finance and an alternative to traditional banking.
“They are trying to become vertically integrated in the ecosystem,” Gammon said. “You've got this really cool currency that was set up in a way to promote decentralization. And it was a way to de-financialize our economy. Unfortunately, when you have guys like Larry Fink trying to take control of it, he's going to take it right back to what he does with everything. They're financializing something that was meant to create an economy with less financial products.”
And even though Gammon does not see these efforts as changing the use case for Bitcoin, he warns it is still “very worrisome."
BlackRock’s Spot Bitcoin ETF filing has a clause that has Bitcoin purists alarmed about the world’s largest asset manager gaining enough power to alter BTC – possibly transforming it from proof-of-work to proof-of-stake. For more details on this clause and Gammon’s take on why it could be even more problematic now that BlackRock is taking over the Bitcoin mining space, watch the video above.
Approval of a spot Bitcoin ETF by the SEC will be good news for those holding Bitcoin to make money when the price goes up, Gammon added. However, for those holding Bitcoin as "wealth" rather than just a "currency," immediate gains are not the final goal.
“One of the reasons we have these booms and busts is because the government comes in, they have all these entities to bail out … then you got Wall Street that just takes it to an extreme. And the next thing, you've got mortgage-backed securities, you've got derivatives valued at a quadrillion dollars, and it's this ticking time bomb,” he said. “If they do the exact same thing to Bitcoin, which I'm sure is their objective, then I don't see how that's a good thing.”
Financial manipulation of the Bitcoin space is something to watch out for, Gammon noted, stating that a lot of “paper Bitcoin” could lead to similar manipulation techniques used with “paper gold” in the ETF futures market. Watch the video above for his explanation and manipulation warning.
Gammon also warned that the world could see a quick introduction of a central bank digital currency (CBDC), adding that U.S. citizens wouldn’t even know they'll be using it. For more on Gammon’s theory of why investors need to own alternative assets like Bitcoin and gold, watch the video above.
Gammon pointed out that even perfect money does not guarantee an ideal financial system. “Even if we went to a Bitcoin standard, it might work well for a decade or two, but eventually, we're going to go right back to where we are today,” he said. “You can have perfect money. And if it's controlled by imperfect human beings, eventually it will behave imperfectly.”
Worldcoin and its ‘Orwellian’ reality
The new cryptocurrency project Worldcoin is creating a lot of negative buzz in the digital assets community, with a growing backlash tanking the WLD token nearly 50% in the last 30 days.
After the controversial cryptocurrency-biometric ID project launched last month, with more than two million sign-ups, regulators across the globe are not convinced that Worldcoin, spearheaded by Sam Altman - the man behind ChatGPT and CEO of OpenAI - is appropriately protecting people’s data.
Worldcoin has shifted its focus a few times since its inception and has raised many security and ethical questions. It went from the idea of distributing universal basic income (UBI) to creating a digital ID to help users prove they are human and not AI bots on the Internet.
At its core, Worldcoin has a disturbing onboarding process — the eye-ball scanning Orb, Gammon said. Worldcoin has been using biometric hardware called the Orb to scan people’s irises in exchange for 25 WLD tokens.
“[This is] something that puts us right back on that path towards Orwell's 1984 [sci-fi novel]. They're not legal in the United States yet. That's why a lot of Americans haven't seen them," he said. “This is the road to serfdom we've been hearing about."
Some countries raising an issue with this project include France, Argentina, and the United Kingdom, citing serious concerns about the project’s data-collection activities. Kenya’s government suspended Worldcoin earlier in August as it assesses the risks the coin poses to the population. And a German data watchdog - the Bavarian State Office for Data Protection Supervision - has also been investigating Worldcoin since late last year due to biometric data concerns.
The fact that regulators are worried is good, but it will take more than that to beat this scary future, Gammon pointed out.
Gammon’s solution is to have a rational plan to avoid the system. To get his advice, watch the video above.