David Z. Morris's article on Unchained is pretty short and sweet, but as a TLDR I've pasted here the articles benefit and risk highlights...

Benefits:

• produces a short-term spike in BTC price that settles down rapidly. • ETF approval will turn major institutions into bitcoin marketers. • Regulated options managed by genuinely reputable entities like Blackrock could starve sketchier operations, broadly reducing fraud.

Risks:

• The rising price of bitcoin, could pull other crypto prices up – becoming a catalyst for an unsustainable crypto-bubble • Appreciating crypto prices almost inevitably attract new waves of fraud and even crime. • ETFs might increase overall crypto market volatility in some ways. The ETF will be held by many less committed investors. That means more bitcoin will be available to be liquidated nearly instantaneously in moments of market uncertainty. • Transaction volumes ultimately generate fees for bitcoin, supporting hashpower and the security of the chain. If everyone instead just parked their bitcoin in an ETF, Bitcoin itself could be threatened. • Bitcoin generates no native yield, so if you’re paying an ETF to manage your coins, you depend entirely on price appreciation to generate returns, and they must outpace whatever fees you’re paying.
I'd also say that custody risk is a major one too, if we look at prime trust and fortress, you can easily stuff up key management or have a core employee pull a stunt and that ETF can fall apart
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"If everyone instead just parked their bitcoin in an ETF, Bitcoin itself could be threatened."
ha!
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I don't like those risks. Those risks heavily overlay with risks associated simply with "Bitcoin price explodes" scenario and not are ETF scenario specific.
Transaction volumes ultimately generate fees for bitcoin, supporting hashpower and the security of the chain. If everyone instead just parked their bitcoin in an ETF, Bitcoin itself could be threatened.
The same can be said for ARK or LN protocols. From time-to-time ETF managers must touch the base layer, but each their tx would represents many (thousands?) users actions. So it fits the "future block rewards high because of L2/L3" narrative.
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Agree on every point you outlined. Moreover, my issue with ETF is that eventually big institutions will be somehow major holders of big BTC stacks. Off course they cannot change the rules, but they could have more power to manipulate the 'complianceness' of Bitcoin: for example the idea of whitelisting I guess will be pushed because of 'compliance', or some other mental proposal that with an ETF in place will turn the matter into a 'compliance matter'.
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Bitcoin ETFs are some trandFi people's "smart" invention, so they still got to be in the middle of making money, which it's completely working against how Bitcoin is supposed to work.
And the people who are stupid enough to buy those are pretty much at the mercy of "regulations" and can never get out of fiat life.
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That's very true
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Thanks for the tl;dr
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