This is an op-ed written by Phil Harvey, CEO of Saber56, a cryptocurrency mining consultancy.
Launching the first unequivocally positive news cycle for the Bitcoin space since the FTX crash, BlackRock decided recently File for a Bitcoin Spot ETF (ETF). within a few days, Two giant money managers have joined forces with BlackRock As Invesco reactivated its application for a spot BTC ETF, ETF specialist WisdomTree filed its third application for a BTC ETF with the US Securities and Exchange Commission (SEC).
As of this writing, no one can say whether the proposed vehicles will be approved by the Securities and Exchange Commission, which recently made headlines for its heavy pursuit of the most prominent cryptocurrency exchange in the world. Coinbase And binance. We will know soon enough.
What is more appropriate at this point is to review the underlying trend: institutional money is slowly making its way into the bitcoin economy. In the world of bitcoin trading, the commitments of notable investors have so far been shaky and driven by the boom-and-bust cycle typical of nascent industries — certainly a defining characteristic of the bitcoin economy thus far.
BlackRock’s potential BTC ETF could be a real bridge to mass adoption. Some votes declared it to offer the best chances of approval yet, not only because of the prestige of the applicant but also thanks Proposed control sharing agreement This appears to be the key in the eyes of the SEC. But whatever the fate of this particular proposition, an examination of the bitcoin infrastructure being built today provides an unambiguously bullish picture of the institutional money betting on the industry.
For example, Andreesen Horowitz (a16Z), one of the most active and successful venture capital funds in the world, has doubled its size and announced its first ever investment. An international office, to be opened in Londonto focus heavily on the development of the cryptocurrency economy.
Nowhere, however, is the institutional investors’ search for growth opportunities as evident as in Bitcoin’s core infrastructure: mining. Mining industry champions sign deals and build at a fast pace, while their competition is getting fiercer and more intense The network hashrate continues to reach an all-time high.
Betting on the post-Bitcoin
Being less flashy and exciting than the asset trading counterpart it supports, investing in the mining space can be muted. However, it is my experience that well-known investors, large utilities, and even government entities in the US and around the world intelligently assess opportunities and employ significant financial resources to shape the market. And this is for good reason: the data centers that host bitcoin miners are equipped to do a bunch of the high-performance computing of the future, and the value proposition of this in the advent of artificial intelligence is evident today.
BlackRock’s move is not just a bet on Bitcoin, but on the world’s most secure and energy-efficient computing network as a way to reach consensus and certify the truth in the 21st century, regardless of the asset manager’s intentions. As such, by refraining from any diagnosis of the outcome of the application, it is fair to ask what a hypothetical Bitcoin ETF would mean for the mining industry.
First, it would mean that every corporate CFO with such an organization would be a custodian of some kind. They will have to build their own guard infrastructure – an interesting test of current industry standards, and “accreditation” in itself, which will be accompanied by growth.
Second, mass adoption due to improved accessibility – in conjunction with the next halving event in 2024 – will be a strong indicator of a hype cycle as prices rise. While these bull runs, caused by hype and FOMO, are smoke and mirrors in large part, they will channel money into the industry and benefit the serious players who have worked through the tough times to reap the rewards.
Finally, and most importantly, institutional investors will have a vested interest in maintaining, financing, and updating the blockchain-based infrastructure that verifies Bitcoin transactions and ensures the security of the network. While this is already happening, including through household utilities and energy providers tapping into miners’ load offloading potential, a spot BTC ETF would, with high probability, further invest in the sector and validate the industry’s efforts to date.
This is a guest post by Phil Harvey. The opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.