Oddbean

In the light of Bitcoin ETFs and institutional adoption like BlackRock's, I want to express concerns about the future of Bitcoin-only companies. ETFs will intensify competition for these companies. Most new investors, both retail and institutional, will likely prefer ETFs for Bitcoin exposure, leading to increased competition, reduced market share, and slower growth for Bitcoin companies. Bitcoin ETFs offer an 'Amazon-like' experience: easy access with a single click, no extra KYC or brokerage, simplified custody, and straightforward exposure, leverage, and estate planning. Moreover, they have massive marketing budgets and a vast network of financial advisors. These are advantages that Bitcoin-only companies lack. Bitcoin companies must find ways to differentiate from ETFs. This could be through education, self-custody, direct Bitcoin ownership, or technologically advanced Bitcoin products. The path isn't clear in the short term, but in the long term innovation is the key. These companies need to focus on building infrastructure based on Bitcoin and its layers, a challenging but necessary strategy to thrive and out compete institutional players. The next four years will be critical. I expect many Bitcoin companies wouldn’t survive the competition and get out compete by the Wall Street incumbents. However for those who survive, they will become more valuable. For full disclosure, I own shares in many companies focusing exclusively on Bitcoin. I express my views based on my investing experience in the Bitcoin industry and my role in running a family office. My unique blend of experience enables me to think critically about various aspects of the market that others might overlook.