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The Bitcoin halving is looming, as the quadrennial event is expected to take place at the end of the week. 

The halving, which marks the fourth such event in bitcoin’s history, will knock rewards down to 3.125 BTC per block from 6.25. 

However, a lot has changed since the last time the rewards were halved in 2020 from the launch of the spot bitcoin ETFs to bitcoin notching new all-time highs just last month.

BitGo CEO Mike Belshe sat down with Blockworks ahead of the halving to discuss the overall market environment, bitcoin and the launch of the ETFs. 

Read more: ETFs helped ‘legitimize’ bitcoin ahead of halving: Q&A

Keep reading for excerpts from Blockworks’ interview with Belshe.

Blockworks: How is BitGo approaching the space post-bitcoin ETFs?

Mike Belshe: What we have found, as an industry, in the last year and a half to two and a half years, is that there’s a political thing going on that is influencing the interpretation of laws and regulations. And because of that, the traditional players are largely locked out. But all of a sudden, they’ve got the ETF vehicle, which has been approved. It’s the one shining light that they can definitely use without feeling like they’re putting their entire businesses at risk. It allows them to participate in Bitcoin, to provide access to their own clients for Bitcoin, and yet not necessarily have to take all of the exposures that they would have to take if they tried to do what BitGo does. So instead, they lean on BitGo to make that happen.

Blockworks: You guys have direct exposure to ETFs, correct?

Belshe: So we’re handling two of them so far. I think there are many more that you’ll be hearing about very soon. We provide all the regulatory compliance that [bitcoin ETF issuers] would need to expect. We’re regulated in three different states as a Trust Company. We’ve got South Dakota, New York and Wyoming now. And then, of course, we have money transmission licenses and other things that we do so we’re a very easy player for anybody that’s looking for that secure storage to work with.

Blockworks: Can you give some insight into the conversations that you’re having with these institutions following the spot bitcoin ETF launches?

Belshe: The business this year is just growing so fast. I actually think the institutions aren’t as much in as you would think. We have our existing institutional clients, and they’re all going to retail on their own — and that retail demand has been growing.

Some people are asking, ‘Where is this ETF demand coming from?’ And I think it’s still mostly retail demand — that is, retail clients going through Schwab, through TD Ameritrade. They’re going through their brokers and just now getting access to this asset class, which previously was just too hard to touch.

Read more: The 2024 halving could usher in a new era for Bitcoin

Now they just log in and buy. This is actually very good news for the industry, because there’s an endless amount of institutional demand, which we know is coming. So institutions are not yet in, and I believe they are coming, but the ETF was only approved in January…it’s not enough time for those evaluations to have been completed yet, which is why most of what we see so far is retail coming in. There’s some amount of the small hedge funds that are now coming in some amount of RAs can come in because they can make faster decisions and move quickly. And I think there’s a lot of headroom here for more demand.

Blockworks: We’ve heard similar things from Valkyrie, that some financial advisors, etc. are not quite ready to embrace the ETFs just yet, and that they need more time. Are you hearing similar rumblings?

Belshe: Some just need to see how bitcoin ETFs play out. The [Securities and Exchange Commission] was initially a no. Now they approved the products, but it’s not like these guys were like, ‘Great, the [bitcoin ETFs] are ready to go.’ A lot of them were on the sidelines, and now — even with the ETFs being launched — they need to see how it all shakes out.

Is it all going to go to BlackRock or to Fidelity, or heck, is Bitwise going to get some of this? Is it going to be really unstable? Is it going to get big really fast?

Read more: This Bitcoin halving will be different — the institutions are here

That’s all starting to shake out now. People are now looking at it and saying, ‘Yeah, this is a pretty robust ecosystem, the largest, fastest-growing ETF sector in the history of the market.’

Blockworks: Is this going to be a different halving than what we’ve seen before because of all the outside factors?

Belshe: I don’t tend to think about it in the short term. But long term, what is it really? Well, we have a distribution schedule for how new bitcoin [is] issued out into the world. That was put in motion all the way back in 2009. It hasn’t changed. That, by the way, is the first monetary policy in the history of humans that has been static for 15 years straight.

Humans can’t stop tinkering — the Fed changes things every quarter — and yet Bitcoin has managed to hold it steady by the exact same schedule that was put in place in 2009. It just shows the difference between what happens when you hand the rules over to the machines versus the emotions of people.

Read more: Financial trouble for bitcoin miners: A look back, and ahead as the halving looms 

You could ask the question: Why does it work this way? And that gets more into how do you build a currency of value without just giving yourself all the tokens. There are other currencies out there, like XRP, where Ripple gives themselves all the money to begin with, and then they say, ‘Come buy my coin.’ Alright, maybe some people are gonna do that and they’ve been fairly successful. Ripple still holds a chunk of XRP to this day. But it’s a lot harder to trust that, because you’re so dependent on Ripple and good stewardship of XRP.

And I’m not trying to say they haven’t been good stewards. I think they’ve been reasonably good. But with Bitcoin, they didn’t want that.

So instead, Satoshi Nakamoto put together this thing. I think it builds trust, and this is going to be just another milestone in building trust. Bitcoin is the one asset that’s going to do exactly what it said it was going to do, and not falter from the original plan.

This interview was edited for brevity and clarity. 

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