Update from 11/08 below. This post was originally published on November 7th.
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The price of bitcoin surpassed $35,000 per bitcoin last month for the first time since early 2022, boosting the price of ethereum and XRP.
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Now, legendary bitcoin and cryptocurrency trader Arthur Hayes has warned that bitcoin and cryptocurrencies could be sleepwalking toward a “massive calamity,” warning that BlackRock and the US government could be about to “kill” bitcoin.
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US President Joe Biden is not a fan of bitcoin and cryptocurrencies, with some suggesting asset managers like ... [+]
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"If BlackRock [bitcoin spot exchange-traded fund (ETF)] "If it gets too big, it could actually kill bitcoin because it's just a bunch of immovable bitcoins sitting there," Hayes, co-founder of crypto derivatives pioneer BitMex, said blocks.
Update 11/8: Despite widespread pushback from the crypto space, the Biden administration has used reports that the October 7 Hamas attack on Israel was funded in part by cryptocurrencies as justification for a crypto crackdown, calling for new powers to the Congress to help prevent crimes. use of cryptography, according to a Wall Street Journal report.
Treasury Undersecretary Wally Adeyemo, speaking during a meeting of the Securities Industry and Financial Markets Association trade group, said the Hamas attack has generated an "increased focus on the illicit financial use" of cryptocurrencies. "There are places where we believe Congress needs to act," Adeyemo said. "We are going to work with Congress to get more tools."
Adeyemo said more action is needed from both Washington and the cryptocurrency industry itself. "What I'm going to continue to tell the industry is that you have the ability to self-regulate in many ways and make sure you protect yourself from being in a position where people use your assets to promote their atrocious acts, like what Hamas did, or its digital criminals,” Adeyemo said, praising last month’s crackdown on so-called cryptocurrency mixers that are designed to mask the origin and destination of funds.
The comments are likely to further entrench fears among the cryptocurrency industry that the US government is waging a secret war against cryptocurrencies, dubbed Operation Choke Point 2.0.
In June, BlackRock began a race on Wall Street to bring a long-awaited US bitcoin spot ETF to market after years of rejections from the Securities and Exchange Commission (SEC).
Expectations that a US bitcoin spot ETF could be imminent soared over the summer, fueled further by crypto asset manager Grayscale scoring a major legal victory in its attempt to convert its flagship trust from bitcoin into a full-fledged bitcoin spot ETF.
Grayscale, owned by the growing Digital Currency Group empire, is the largest known owner of bitcoins, with nearly 650,000 bitcoins, four times more than Micahel Saylor's MicroStrategy.
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The SEC has said it is still considering approving a flood of bitcoin spot ETF applications, although the market is betting one could be available to traders and Wall Street in the coming months.
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The price of bitcoin has soared this year on expectations that BlackRock and Wall Street could be ... [+]
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"Let's say [BlackRock chief executive] Larry Fink and his [traditional finance] “The guys come in and absorb a large percentage of the freely traded bitcoins in circulation,” Hayes said, arguing that bitcoin spot ETFs that require institutions to buy large volumes of bitcoins could give them control of the consensus mechanics. of bitcoin.
"BlackRock is the largest shareholder in some of the largest [bitcoin] mining operations," Hayes said, warning that the same Wall Street giants who want to create bitcoin spot ETFs could also launch bitcoin mining ETFs.
"Are we, you know, getting high today just to engender a massive calamity in the future? I don't know."
Wall Street asset managers like BlackRock are "agents of the state," according to Hayes, who thinks they "act according to what the state tells them to do," fueling fears that the U.S. is waging war secret against bitcoin and cryptocurrencies known as Operation Choke Point 2.0.
This year, the traditional financial services sector has withdrawn from the cryptocurrency industry and market, with a wave of bank failures earlier this year linked to their cryptocurrency services by some who fear the banking crisis has been targeted in part by the US government and regulators.
The original 2013 Operation Choke Point was a U.S. Department of Justice initiative to deter banks from working with firearms dealers, payday lenders, and other businesses believed to be at high risk of fraud and money laundering.
In September, Binance CEO Changpeng "CZ" Zhao issued a "frank" warning about Operation Chokepoint 2.0.
