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Bitcoin has been co-opted by Wall St. Does that cap its potential?

245 sats \ 9 comments \ @crenshaw 17 Mar bitcoin

Proposition: The corporatization of Bitcoin has seriously undermined its original intent as an independent money for people to use and therefore limits its full growth potential.

When giant, corporate entities hold a significant portion of bitcoin, and the general public is bought into those asset pools via various traditional financial instruments, the whole “peer-to-peer” payments thing kind of goes out the window.

Does the same value prop still apply to Bitcoin when it is mainly used to settle transactions between large entities like banks, countries, and corporations? In that scenario, don’t we just end up where we started?

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10 sats \ 1 reply \ @Bishop 17 Mar

It could never be money if it had the ability to exclude Wall Street.

I hope that those early to Bitcoin and enriched by it will, with due op sec practices applied, spread the sovereignty and freedom narrative which seems to be a key part of Bitcoin's social layer.

Edit - I asked perplexity to write an optimistic response to your OP:

While concerns about the corporatization of Bitcoin are understandable, there are several reasons to remain optimistic about its future and potential to fulfill its original intent:

Decentralization Remains Intact Despite increased corporate involvement, Bitcoin's core protocol and network remain decentralized. The blockchain is still maintained by a global network of nodes and miners, not controlled by any single entity. This decentralized structure continues to provide censorship resistance and protection against centralized control.

Increased Adoption and Liquidity Corporate involvement has significantly increased Bitcoin's liquidity and mainstream adoption. This has made it easier for individuals to access and use Bitcoin, potentially accelerating its growth as a peer-to-peer payment system. Greater liquidity can lead to more stable prices, making Bitcoin more practical for everyday transactions.

Technological Innovation Corporate interest has driven substantial investment in Bitcoin infrastructure and technology. This has led to improvements in scalability, user interfaces, and security, making Bitcoin more accessible and user-friendly for the average person.

Coexistence of Use Cases Bitcoin can serve multiple purposes simultaneously. While it may be used for large-scale settlements between corporations and countries, this doesn't preclude its use for peer-to-peer transactions among individuals. In fact, these different use cases can complement each other, strengthening Bitcoin's overall ecosystem.

Alignment of Interests Corporate treasuries holding Bitcoin have a vested interest in its success and growth. This alignment can lead to increased advocacy, development, and integration of Bitcoin into mainstream financial systems, potentially benefiting all users.

Open-Source Nature Bitcoin's open-source code ensures that its development remains transparent and community-driven. This prevents any single entity, corporate or otherwise, from unilaterally changing Bitcoin's core properties or purpose.

While the increased corporate involvement in Bitcoin presents new challenges, it also brings opportunities for growth, innovation, and mainstream adoption. The original vision of a peer-to-peer electronic cash system remains viable, coexisting with and potentially benefiting from its emerging role in corporate finance and macroeconomic strategies.

0 sats \ 0 replies \ @kepford 17 Mar

It could never be money if it had the ability to exclude Wall Street.

Dead right.

Wall Street will be transformed by bitcoin. Everything will.

47 sats \ 2 replies \ @j7hB75 17 Mar

Individuals hold more than corporations, ETFs, governments, etc. combined.

source

12 sats \ 0 replies \ @crenshaw OP 17 Mar

Fair point. Assuming the current trend continues, the distribution will shift more to the right. To what extent, who knows.

Also, I wonder how ownership distribution looks for unique individuals who own bitcoin via self-custody vs via some custodian. I would not be surprised if the custodial owners greatly outnumber self-custodians today

0 sats \ 0 replies \ @odium 17 Mar

There is a whole section in the report that lays put how this whole cycle is driven by institutions, while the investments by individuals are dropping sharply.

No, this is not fine.

5 sats \ 0 replies \ @grayruby 17 Mar

Maybe wall st has been co-opted by Bitcoin.

0 sats \ 0 replies \ @Solomonsatoshi 17 Mar

'Does the same value prop still apply to Bitcoin when it is mainly used to settle transactions between large entities like banks, countries, and corporations? In that scenario, don’t we just end up where we started?'

It is even worse than that. Bitcoins use as a P2P payments protocol has been successfully obstructed without overtly banning it.

The sly combination requiring KYC on acquisition, the arbitrary designation as a commodity and thus liable for CG assessment upon every transaction and the threats from banks to debank businesses accepting Bitcoin as a payment all amount to the effective obstruction of Bitcoin as a P2P payments protocol.

The corporate accumulation of Bitcoin is not for use as a MoE/P2P payments protocol- it is expressly for the prevention of that. It is for the definition and use of BTC as a speculative commodity asset plaything held in institutional custody where it is not used for payments of any kind.

0 sats \ 1 reply \ @kepford 17 Mar

No. Think about it. If a new element or tech is discovered. It has use. Its valuable. EVERYONE IS GOING TO USE IT. If they can control it, its not worth our time. This is a phase that was always going to happen.

To your point about being a settlement for banks and nation states.... ala it become the new gold standard. If that was all it did was create a new gold that would force sound money polices world wide... that would be INCREDIBLE for humanity. If you start looking at the history of gold standards and free banking you can see what it would do for us.

Thing is, its not limited like gold is. Gold could not keep up with a digital age. It was gonna fall to fiat. Fiat will fall to bitcoin due to greed. Everyone will want it. Good, bad, and evil.

100 sats \ 0 replies \ @Solomonsatoshi 17 Mar

Fiat money gives significant advantage to the nation state that imposes it. For a nation state to surrender monetary issuance to Bitcoin the nation state is surrendering a significant part of its power projection potential. The effect of global reserve currency status is immense and carries risks but has enables the US to maintain its global power wealth and consumption far exceeding production for decades. Fiat money enables the nation state to leverage the monetary wealth of all citizens to finance whatever purpose the nation state chooses- including war and competition over resources- for nation states to surrender this power would be illogical. Today China is using fiat debt capital issuance to build its global empire and overtake the US dominance. It seems far more likely that the dynamics of nation state power projection will dominate over the equity and fairness that Bitcoin delivers individuals. Individuals are after all ultimately reliant upon the nation state for the provision of security, law and order and the fundamentals that enable enterprise to generate wealth. Chinas mixed economy leveraging fiat debt capital issuance is building wealth and military power at a rate unprecedented. Bitcoin might serve as a refuge for capital from that controlled by dominant nation states but it seems unlikely given the role of the nation state in wealth and power dynamics that Bitcoin can or would logically displace fiat money from its dominant role in the settlement of international trade payments and within nation state economies.