It is actually bad for bitcoin as it takes away the decentralized part away from bitcoin. And it is hard to trust them as they might sell for fiat for their further investments.
People have a tough time adopting to new concepts that didn't exist before. All they know is they way is has been, and it's difficult to change the way something has been done their entire lives. They try to push it into something they already know, which is what we are seeing here.
