BlackRock’s ETF application led to the biggest crypto inflows in a year. But how much Wall Street influence is too much?

The news helped fuel the highest inflows to cryptocurrencies in a year—nearly $200 million, according to a report by CoinShares—but that’s not without risk. Despite support from the market, BlackRock still faces an uphill battle. The Securities and Exchange Commission has never approved a spot Bitcoin ETF, rejecting at least 30 attempts in the past, according to Bloomberg, mostly because the agency says it’s concerned about market manipulation.

In the best-case scenario, BlackRock’s spot Bitcoin ETF, along with any others that get approved, may lead to a rush of investment and a new bull market that sends the price of Bitcoin soaring. At the same, market players say Wall Street effectively controlling millions of tokens as portfolio assets could give TradFi firms outsized influence over the space.

Including even one-third of all Bitcoin in financial products could be harmful to the overall network, causing it to deviate from its original purpose, said Steven Lubka, the head of Swan Private at Swan Bitcoin, a financial services firm.

“You always want to see a world where a healthy amount of people own Bitcoin and self-custody, and use it directly for the network to kind of truly maintain what is, in my opinion, its original purpose—and what gives it value,” he told Fortune.

There’s also the risk that BlackRock and its peers could use their influence to push for changes to the underlying Bitcoin blockchain, such as pushing for a “fork” that would create two separate cryptocurrencies, Lubka added. Bitcoin was forked once before, after users and developers disagreed over its future, resulting in the creation of a new coin, Bitcoin Cash.

If there was another fork, BlackRock’s ETF prospectus says it gets to decide which of the two cryptocurrencies is the “real Bitcoin,” despite what investors or other users of the blockchain think, Lubka said. This likely would lead the firm to dump all of its holdings in whichever coin isn’t selected.

“If they’re sitting on 5 million Bitcoin, that means they’re going to sell 5 million of the other fork,” Lubka said. “They’re going to tank the price.” 

Others like Jay Jog, cofounder of Sei Labs, disagree. Jog said Wall Street firms may gain more influence with the approval of these ETFs, but it’s doubtful companies like BlackRock would push for major changes to Bitcoin because of the myriad potential legal and financial implications.

“These entities, they’re going to have so much money at stake,” Jog told Fortune, “that even if there is the possibility for them to act maliciously by taking advantage of their stake in the network, from an economic standpoint, it makes no sense for them to do that.”

While there is some risk, both Lubka and Jog ultimately believe that the entry of traditional financial firms is something that will benefit Bitcoin—and crypto overall.

The entry of traditional financial firms to the market has often spurred big inflows. When ProShares, the manager of several traditional finance ETFs, launched one of the first Bitcoin futures ETFs, in 2021, there was an influx of $1 billion into digital assets in a single week, according to James Butterfill, head of research at CoinShares.

On the back of the spot ETF application by BlackRock, Invesco Ltd. and WisdomTree each filed their own, soon followed by that $199 million deluge of inflows—94% of which went into Bitcoin—according to CoinShares.

“Participation among institutional investors has been scant so far, mainly due to reputation concerns associated with such investments,” Butterfill told Fortune in an email. “But now, with BlackRock deciding to launch an ETF, many anticipate other institutions to follow suit.”