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Institutional investors are more interested in the crypto world than ever beforeand now theyre putting their money where their mouth is. Some are wondering, however, whether Bitcoin may lose its raison dtre as a result.

BlackRock, the worlds biggest asset manager, couldnt be more mainstream. Managing $9 trillion, the well-connected Wall Street firm is the epitome of the establishment.

Yet last month it filed an SEC application for a spot Bitcoin exchange-traded fund (ETF)sending the price of the biggest cryptocurrency to a year high. Its billionaire CEO Larry Fink then praised crypto for digitizing gold.

Bitcoin was originally an anti-establishment initiative. Favored by cypherpunks suspicious of the government and initially bad-mouthed by every major institutionfrom the European Central Bank to JP Morganthe cryptocurrency seemed poised to break finance free from the shackles of centralization.

Bitcoin was created because the traditional system has huge problems, and making Bitcoin like it is defeating Bitcoins purpose, a long-time contributor to Bitcoin privacy wallet Wasabi who goes by the name Rafe told Decrypt. The difference between the priorities of cypherpunks and regulated institutions was expected, he added.

Cypherpunks are typically privacy advocates who want social change and who see Bitcoin as a tool to avoid an oppressive governments prying eyes. Institutional investors are focused on making moneyBitcoin is something in which they can put a part of their large fund to realize a return.

Privacy-focused Bitcoiners who spoke to Decrypt said the worry is that institutional interest could eventually provoke governments into strongarm crypto users into restriction, penalties, or taxes.

Major crypto exchanges such as Coinbase and Binance already have know-your customer (KYC) measures in place and broadly restrict access to their platforms based on political borders. Lawmakers are also increasingly focused on anti-money laundering (AML) procedures. But the emergence of such compliance measures in the crypto space has attracted criticism from long-time privacy advocates.

Get-rich-quick and mainstream-adoption-no-matter-what could force crypto users into totalitarian rules, Rafe said.

And because every transaction is publicly recorded on the blockchain, a combination of strict KYC rules and no prioritization of privacy could create the biggest global financial surveillance system the world has ever seen, he added.

Harry Halpin, CEO and co-founder of Nym Technologies, a startup working to end mass surveillance, said: The fundamental innovation of cryptocurrency comes from crypto-anarchist philosophy, and if you get rid of that ethos, then innovation in the crypto space will perish.

Bitcoiners have nonetheless continued to work on privacy solutions for Bitcoin because the asset isnt fundamentally private. Rafe told Decrypt that having private wallets can keep big government and institutions from barging in on users..

Some say that Wall Street is coming for crypto, meanwhile, whether people like it or not. David Schwed, COO of blockchain security firm Halborn, previously told Decrypt that the anti-establishment actors in crypto who hate intermediaries will eventually turn to privacy coins.

For others, though, when it comes to Wall Street making things more centralized, the problem isnt Wall Street its Silicon Valley.

Meta has proven again last week with their release of Threadslooking at the privacy disclaimer in the App Storethat they are ruthless about collecting personal data of all kinds, Bitcoin Design contributor Christoph Ono said.

Metas new social media platform Threads dropped this month as a Twitter competitor. It allows Instagram users to share text updates but is more aggressive with its data collection than Metas other appsnotably location-related information, even when location sharing is disabled on ones device.

Deleting a Threads account is also impossible without deleting ones Instagram account too.

Ono added that data is just too big a temptation for the tech industry and that there was no way around building good privacy tools that are impossible to penetrate.

So what solutions are available today? While Rafes entry, Wasabi, is probably too complex for the average Bitcoin user, Karo Zagorus, who leads community and reputation management at zkSNACKs, told Decrypt that self custody was enough of a solution.

Self-custody of Bitcoin or crypto is when a user has full control over their private keys, such as with a hardware wallet. Custodial wallets are more popular, however, because investors do not have to worry about seed phrases and keys. Instead, their cryptocurrency is put into the hands of a third party, like an exchange.

As long as individuals hold their Bitcoin non-custodially, we do not have to be afraid of alternative Bitcoin products like ETFs on Wall Street, he said, adding that the problem only starts happening when institutions start manipulating the books and start inflating the supplies with an on-chain audit.

Scott Norris, co-founder of independent Bitcoin miner LSJ Ops, added that KYC is becoming more of a priority for regulatorsso those who want privacy for their holdings may soon have few options.

Forcing KYC on all crypto users on a permissionless network would require totalitarian control over all our computing devices, said Craig Raw, developer of the Bitcoin Sparrow Walletsomething ultimately very difficult to achieve.

But despite some disagreement amongst Bitcoiners, one view they share is that Wall Streets entry into the space was inevitable.

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Will Wall Street Interest in Bitcoin Scare Cypherpunks Away? - Decrypt