• Samson Mow advises Bitcoin users to keep their assets in personal custody to ensure their safety and authenticity.
• Bitcoin may split into two types, with Institutional Bitcoin held by firms like BlackRock and Normal Bitcoin remaining freely used by the public.

Samson Mow, Chief Strategy Officer of Blockstream and CEO of Pixelmatic, has recently highlighted the potential for a “Bitcoin bifurcation. ” A development that promises to have substantial implications for the cryptocurrency’s market and users.

The Institutional Influence

As institutional investors increasingly focus on Bitcoin, Mow perceives both opportunity and risk in this new trend. The participation of firms like BlackRock is a testament to Bitcoin’s growing legitimacy as an investable asset class and its potential as a future reserve asset. Nonetheless, Mow warns of the segregating impact of this on the currency, envisaging a future where “institutional Bitcoin” and “normal Bitcoin” may coexist but operate under very different conditions.

According to Mow, Institutional Bitcoin could become the mainstay of major financial entities, potentially making it a less liquid and more exclusive asset. Institutional Bitcoin’s restricted movement may cause it to have a different value than “normal Bitcoin,” which is expected to keep circulating freely in the public domain. Used for transactions and potentially valued higher due to its unrestricted nature.

This concept of Institutional Bitcoin parallels the idea of ‘burning’ cryptocurrency, where coins are sent to wallets that are effectively out of circulation. Mow equates the reduced accessibility and versatility of locked Bitcoin with this practice, which could lead to a differentiated valuation of Bitcoin in the market.

The Self-Custody Safeguard

Highlighting the importance of autonomy over personal assets, Mow advises Bitcoin users to withdraw their holdings from exchanges and take personal custody. This emphasis on self-custody stems from a precautionary stance against the vulnerability of exchanges to security breaches and operational failures, exemplified by the notorious FTX collapse, which resulted in significant losses for its users.

This advocacy for self-custody resonates with a broader call for transparency and security within the cryptocurrency community, especially in the wake of fraud and mismanagement incidents. By holding their Bitcoin independently, users can ensure the existence and safety of their digital assets against external threats.

ETFs and Bitcoin’s Price Trajectory

Market watchers are currently observing a potential catalyst for Bitcoin’s valuation in the shape of an exchange-traded fund (ETF). The SEC’s approval window for the first spot Bitcoin ETFs has opened following a landmark court victory by Grayscale that challenged the regulator’s previous grounds for denial. This progression has been marked by a recent rally in Bitcoin’s price, pushing past the $36,000 mark and aiming for a bullish target of $49,000.

The approval of a spot BTC ETF is a crucial step toward mainstreaming Bitcoin investments, offering a regulated and potentially more secure avenue for institutional and retail investors. Therefore, the SEC’s upcoming decision carries significant weight, with the potential to usher in a new era of accessibility and growth for the cryptocurrency market.

Industry experts, including Bloomberg’s James Seyffart and Scott Johnsson of Van Buren Capital, point out that the approval process for a spot Bitcoin ETF is meticulous and may extend over several months. Nevertheless, anticipating this regulatory milestone has generated a positive buzz among investors, with a close watch on the SEC’s impending January deadline.