BlackRock is generating buzz in the cryptocurrency universe by introducing a spot ETF for the altcoin XRP, following its previous ventures into Bitcoin (BTC)
$0.000039 and Ethereum (ETH)
$2,529.
While this development has sparked excitement in the altcoin market, some experts caution that it may pose significant risks for small investors. Van Dell, co-founder of Black Swan Capitalists, argues that such an ETF primarily serves Wall Street’s interests. He believes that the XRP ETF is crafted to benefit corporate entities rather than individual investors.
BlackRock’s XRP ETF Might Not Be As Innocent As It Seems
With BlackRock’s substantial interest in XRP, it might seem like a move to mainstream cryptocurrencies, particularly altcoins. However, Van Dell holds a contrarian view. He contends that this gesture is not meant to encourage the direct use of cryptocurrencies but rather to enclose the market within the frameworks of traditional finance systems. “A disciplined XRP serves corporate rather than individual interests,” Dell summarizes his stance.
According to Dell, the spot XRP ETF merely grants investors the right to follow price movements without providing direct access to the XRP network. Investors won’t gain the benefits of using a wallet, executing transactions, or accessing the protocol’s potential advantages. Therefore, XRP ETF investors will be spectators rather than participants in the technology, a situation directly opposing the decentralization principle of cryptocurrencies.
Corporate Profit Might Stem from Individual Loss
Dell highlights why ETFs are more appealing to large corporations. BlackRock and similar entities can operate smoothly within SEC regulations owing to the ETF structures, minimizing legal risks. Furthermore, they secure regular and predictable revenue streams through annual management fees—an income model absent in direct cryptocurrency purchases.
Large funds can manipulate market volatility via the processes of creating and redeeming ETF shares, allowing them to profit through strategic timing. Dell claimed BlackRock demonstrated this with its Bitcoin ETF. In this system, driven by investors’ emotional reactions, the big players always win, while small investors suffer losses from these fluctuations.
In this scenario, small investors lose control over their assets and become distanced from actual ownership, participating in a “holding without owning” investment model. To Dell, this approach contradicts the essence of cryptocurrency.
