In a new YouTube video titled There Is No Such Thing as a Bitcoin Paper ETF, Fred Krueger, an investor at cryptocurrency hedge fund 2718.fund, explored the growing concerns surrounding spot Bitcoin ETFs in the US and their impact on the cryptocurrency’s price.

Krueger sought to dispel the fear, uncertainty, and doubt (FUD) that has been circulating about the Bitcoin paper — the notion that ETFs could be selling Bitcoin they don't actually own — and explain why the price of Bitcoin hasn't risen as dramatically as some might have expected, despite significant ETF purchases.

Krueger began his analysis by acknowledging the prevalent skepticism in the market.

He noted that historically, the concept of paper Bitcoin is associated with exchanges that sold Bitcoin to customers without actually owning the underlying assets.

Krueger cited several high-profile cases where this practice led to significant losses for investors, such as the Mt.

Gox and QuadrigaCX.

Krueger argued that ETFs, especially those managed by established financial institutions, operate under a fundamentally different framework compared to unregulated exchanges.

He highlighted two leading ETFs — BlackRock's IBIT and Fidelity's FBTC — emphasizing the rigorous regulatory oversight that governs them.

He explained that both ETFs are subject to very strict regulatory oversight, including by the SEC and other agencies in the US.

Krueger provided specific data to refute the notion that ETFs hold paper Bitcoin, stating that ETFs hold zero pure paper Bitcoin and highlighting that IBIT holds approximately 403,000 real Bitcoins, while FBTC holds about 185,000 real Bitcoins.

When addressing the question of why the price of Bitcoin has not risen more dramatically despite significant capital inflows into ETFs, Krueger offered a nuanced explanation, noting that Bitcoin had already risen 60% since the introduction of ETFs.

He also attributed the moderation in Bitcoin price growth to substantial selling pressures from several sources.

Krueger speculated that in the absence of such selling pressure, the price of Bitcoin could be significantly higher.

At the time of publication, BTC was trading at $68,752.

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