One of the key ingredients of Bitcoin’s success is the fixed supply. And I’m not here to suggest it’s possible to alter Bitcoin’s legitimate supply.
However, I am concerned with malicious attempts to sway Bitcoin buyers into alternatives to BTC. Alternatives such as derivatives like futures, options, and ETFs that may hold only a fractional reserve of BTC or none at all. Even holding BTC on an exchange or in some other form of custody than a personal wallet allows for fractional reserve where you may think someone is holding your BTC but they’re not. Theyre just holding a promise to give you BTC should you ask for it back. One could even make the argument that a lot of altcoins are designed to distract investors from buying BTC with promises of being similar to BTC but with faster gains.
So you might be thinking, so what? My point with all this is that these alternatives to BTC provide potential BTC-investors a synthetic, always increasing supply. Any synthetic BTC investment that persuades an investor from buying BTC, is providing a synthetic supply of BTC. And these types of investments have no limit.
The only solution to preventing this synthetic supply of BTC is persuading and educating potential BTC investors to self-custody or purchase a spot ETF when one becomes legal and available.
TLDR Any investment into a BTC alternative that does not actually make it to the BTC blockchain is a synthetic creation of BTC supply. The only defense against this synthetic, unlimited supply is to educate investors to self-custody.
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