Bitcoin exposure or Fiat disguise? Finance companies split crypto community

Bitcoin finance companies – entities that accumulate digital assets (usually through borrowed assets) – provide clients with indirect exposure through stocks. Some believe that these companies will bring Bitcoin to Wall Street. Others believe that these finance companies are doing the opposite. The goal is to turn Bitcoiner into what is called “Fiat Brothers.”

From independence of private keys to indirect bitcoin “exposure”

In 2021, billionaire and X owner Elon Musk replied, “Your app sucks.” Now, when Bitcoin ETFs and Bitcoin finance companies are gaining so much attention, it may seem like the independent has quietly left the scene.

The big story is dominated by news about finance companies spending millions of dollars (of borrowed money) to buy as much Bitcoin as possible, but Bitcoiner, who doesn’t mind (at best) “indirect reveal to Bitcoin” has gone nowhere. They are not as visible in social and mass media.

Indirect Bitcoin exposure, or ownership of paper Bitcoin, owns certain assets issued by companies that strategically accumulate Bitcoin on their balance sheets. A Bitcoin finance company (e.g., MSTR by strategy) or a stock in an exchange trade fund (ETF) of an asset management company holding Bitcoin (e.g., IBIT By BlackRock) is two of the most common types of assets that expose users to Bitcoin.

By owning these assets, it is assumed that holders will benefit from Bitcoin price transfers, as they are reflected in the value of these assets. Therefore, Bitcoin ETFs, stocks of Bitcoin financing companies, Bitcoin derivatives, and similar assets are considered to hold Bitcoin, but essentially Bitcoin.

read more: How did you go from Bitcoin White Paper to “Paper” Bitcoin?

Is the finance company Holling the Trojan and Wall Street?

Some view finance companies as an easy way for institutional and corporate investors to enter the crypto market. In fact, for businesses, buying inventory of strategies is easier than buying Bitcoin from a legal standpoint. The strategy holds nearly 600,000 bitcoin and is engaged in regular activities such as when purchasing MSTR stocks exposes the company’s buyers to Bitcoin price fluctuations.

As finance companies continue to accumulate Bitcoin in lent, purchasing pressure will increase and BTC prices will be prevented from dropping significantly. Companies that buy financing companies’ shares are investing in Bitcoin indirectly.

Strategy Chairman Michael Saylor said he wanted to bridge the cryptocurrency economy with traditional capital markets. Some consider him and other Treasury departments to be a Trojan horse that brings Bitcoin to Wall Street.

However, some people see the opposite happening. Finance companies are turning Bitcoiners into traditional financial investors. Critics of finance companies have emphasized that despite much talk about Bitcoin, these companies operate in the traditional financial sector, promoting their stocks to both TRADFI (traditional finance) and crypto investors.

In particular, these companies do not pay employees on Crypto and do not accept Bitcoin as a payment method for stocks. Literally, these companies don’t offer clients or employees the Bitcoin experience.

In the case of the TRADFI sector, treasury companies act as a way to benefit from Bitcoin’s value growth. However, for Bitcoin investors, these companies may seem like an invasion of Tradfi agents that ceases to buy and hold Bitcoin and tempt people to switch to stocks like traditional equipment. The standard story of Bitcoin is said to only serve as a promotional tool for a Bitcoin enthusiast audience.

While there’s nothing wrong with competing for investors, Bitcoiner appears to be angry at the fact that the Treasury has been infected with promotional posts about them in most of the Bitcoin-related media.

Independent advocates argue that Bitcoin Podcasters, Crypto X, Crypto Conferences – all of these platforms are “shilling” strategies and Nakamoto stocks. As a result, there is too little space to talk to people who share similar values, such as independence and independence philosophy.

Another concern associated with finance companies is that their strategy may not be that safe, and at some point they have to sell the bitcoin they buy. It can cause domino effects that can even fill up giants like strategy.

According to a recent report from Venture Capital Company Breed, it is unlikely that most Bitcoin finance companies will survive the “death spiral” caused by a sudden drop in BTC prices.

Especially given its centralized nature, the chances of a company coming back after crashes are less likely.

read more: Not all Bitcoin holders will avoid a death spiral, a new report says