Will Bitcoin be repurposed by TradeFi players?

The corollary, the crypto nightmare, was that Bitcoin and public blockchains would be repurposed to end money laundering — and in the process, end financial freedom. It’s the vision that BlackRock CEO Larry Fink — then a Bitcoin critic, now the face of iBIT — outlined in 2017: “A true global digital currency” where “you would have everything understood, everything would be flowing through,” making money laundering impossible by design.

This is an excerpt from a recent opinion piece on Cointelegraph by Zachary Kelman.

When you come across something like this and think of the reality that the company led by this individual now holds 3.567% of Bitcoin's supply through its ETF and is growing, you'll come to question what the endgame might be for these institutions.

I have talked about these things a couple of times, so I found no element of surprise reading this. TradFi is in the business of control.

You look at recent developments involving crypto coming from players in the industry and it has control written all over it.

Without control, TradFi does not exist. It is a crucial piece of the industry because it is fundamental to how they make money.

There are no ways to prove their relevance nor generate income without control.

This is why they offer custody services, promising security.

Control, promise (proving relevance), profit (charging a fee).

It is what it is.

With that said, when we look at the accumulation habits of institutions, when it comes to Bitcoin and Ethereum, etc, unless one is intentionally deciding to stay oblivious, it should be quite obvious that all of these efforts cannot simply be to hold some piece of computer code in another piece of computer code, year after year, hoping on significant price appreciation overtime.

No, no, there has got to be something else.

We see the push for ETF staking, so it's pretty obvious that there's considerations to do more than just hodling these assets for dear life.

One thing I've suggested in the past, when it comes to Bitcoin specifically, is that transactions will be abstracted off-chain.

An event like this would technically qualify as a repurposing of the Bitcoin blockchain because without direct end users interactions with the mainnet, institutions now run the show, as far as generated economic value is concerned.

TradFi will build products atop Bitcoin but it will all be within a layer they control.

It doesn't matter if it's all going to be Bitcoin L2 blockchains, it will at the end of the day be at least, semi-permissioned. Users may not even know that they're interacting with a different network.

Why would they care if they see that they are perhaps transacting Bitcoin? how the asset moves around becomes irrelevant.

This is one of those speculations that are less of a speculation and more of a prediction because everything happening right now points to the fact that TradFi isn't changing its design, it is simply attaching itself to what is current while keeping its core functions present in its adjustments.