BTC<\/a>).<\/p>\nIn a new interview with Peter McCormack at a live What Bitcoin Did discussion, Woo says he\u2019s concerned about the growing \u201cfinancialization\u201d of Bitcoin through the various derivative products being launched that he says have the ability to manipulate price and take liquidity away from BTC.<\/p>\n
According to Woo, Bitcoin\u2019s Sharpe Ratio metric, which aims to compare the return of an investment with its risk, has slowly declined ever since 2019 when BTC derivatives started popping up.<\/p>\n
\u201cBitcoin was killing it. It beat every other asset on the planet. It was like three to four [on the Shape Ratio], that\u2019s very high. Now it\u2019s dropped down to around twoish, something like that\u2026\u00a0<\/em><\/p>\nWhere we are right now is actually converging onto every other macro asset on the planet, similar to equities, similar to gold, bonds, and emerging currencies. It\u2019s like all macro assets trade within a range, and Bitcoin is just into that\u2026\u00a0<\/em><\/p>\nThat happened in 2018-2019. And the question is what happened in 2018-2019? It was the financialization of Bitcoin. We had the perpetual swap, we had calendar futures, paperization of Bitcoin. Say I\u2019m the US government and I\u2019ve got $20 trillion of capital out there \u2013 M2 money supply \u2013 you can make policy, you can print more money, you can incentivize particular markets. <\/em><\/p>\nAnd the reality is Bitcoin\u2019s maybe a half a trillion dollar asset. There are 21 million Bitcoins associated with that. If I print $1 trillion, I can sell $42 trillion in Bitcoin. So that\u2019s the issue right now is, we\u2019ve got the paperization of these markets and Bitcoin is traded like any other macro asset on the planet. I think that\u2019s a big worry for me. <\/em><\/p>\nWoo says the likely approval of a spot Bitcoin exchange-traded fund (ETF) may come with the catch of larger entities being able to influence price.<\/p>\n
\u201cWe\u2019re talking about a spot ETF, okay we can buy up to 21 million \u2013 well actually 1 million because that\u2019s what\u2019s available \u2013 but in the meantime you\u2019ve got these paper markets that have this huge ability to control the market.\u201d<\/em><\/p>\n