Bitcoin ETFs Prevent Major Price Drops
In a post on social media platform X, Balchunas refuted claims that traditional investors were responsible for every Bitcoin price downturn. He argued that Bitcoin ETFs have, on multiple occasions, saved Bitcoin from severe declines.Â
These comments are in response to rumours pointing that BlackRock might be shorting Bitcoin using IOUs from Coinbase, thereby contributing to its periodic price drops. However, Balchunas pointed out that itâs Bitcoinâs native holders who have been selling their assets, rather than traditional investors, causing fluctuations in the coinâs value.
This argument aligns with recent data presented by another Bitcoin analyst, Ali Martinez, who noted that Bitcoin miners sold over 30,000 BTC within just three days. This large-scale sell-off supports Balchunasâ claim that internal factors, rather than external market players, are influencing Bitcoinâs price.
Bitcoin ETFs Drive Price Surge
The influence of BTC ETFs on the cryptocurrencyâs price has not been limited to preventing declines. Earlier this year, these funds were essential in driving Bitcoin to a new ATH of $73,000 in March.
The launch of these ETFs resulted in net inflows, which introduced new capital into the BTC market and started a price surge. Notably, BlackRock has been a uniform holder of Bitcoin, recording only minimal net outflows since the launch of its ETF in January.
Coinbaseâs Alleged Role in Price Suppression
Amidst these developments, there have been persistent rumours that Coinbase is assisting BlackRock in suppressing Bitcoinâs price by issuing Bitcoin IOUs. Crypto analyst Tyler Durden has been a vocal proponent of this theory, suggesting that Coinbaseâs IOUs allow BlackRock to borrow Bitcoin without holding a reserve, enabling the asset manager to short the cryptocurrency.
In response to these allegations, Coinbase CEO Brian Armstrong clarified the process of ETF minting and burning, emphasizing that all transactions are settled on-chain and audited regularly. Armstrong denied any wrongdoing, maintaining that Coinbase operates transparently and within regulatory guidelines.
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