Bitcoin has officially gone mainstream in the United States after the approval of 11 spot Bitcoin ETFs. Products from issuers such as BlackRock, Fidelity, and Bitwise launched on Thursday, and cumulative trading volume exceeded $7 billion in the first two days.

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The crypto industry has been waiting for this approval for years to provide a large amount of new capital flows to the market, which has been open to the largest financial institutions that were not ready for the technical aspects of crypto and crypto-savvy retail investors.

However, there are also risks to Bitcoin meeting Wall Street. Some long-time bitcoin users point to the increasing potential for Bitcoin ownership to be concentrated in the hands of a small group of institutions, potential rehypothecation, and changes to the way the Bitcoin community manages itself.

Single Point of Failure (Wall Street)

The most obvious concern that many crypto individuals have noticed is that all of the bitcoins supporting the ETF shares will be held by a handful of designated custodians. Except for VanEck, which chose Gemini, and Fidelity with its own custody product, most issuers listed Coinbase as a custodian.

Jameson Lopp, co-founder of Bitcoin custody company Casa, notes that in such a case, the custodian becomes a single point of failure and that there are “relatively few ‘doors’ that need to be breached by state agencies if they want to seize Bitcoin locked in ETFs.”

As for the potential for government seizure, people make the same analogies to the gold ownership ban during the Roosevelt era. However, Ross said that at the time, the US dollar was backed by gold, which made it a major component of monetary policy, and that Bitcoin is not in the same position. “There is no reason for the government to take bitcoin from Americans,” he added.

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