HODLers, Not ETFs, Responsible for Bitcoin Price Drop: Analyst Debunks Coinbase Rumors
Date: 2024-09-17 Author: Henry Casey Categories: BUSINESS
In the ongoing debate over Bitcoin’s price drop, Bloomberg analyst Eric Balchunas has provided a compelling counterargument to a widely held theory. Speculation has suggested that BlackRock, the world’s largest asset manager, is allegedly suppressing Bitcoin’s price through IOUs (debt obligations) issued by Coinbase, a leading cryptocurrency exchange.
However, Balchunas argues that the real culprits behind Bitcoin’s decline are not institutional investors, but rather Bitcoin holders, or “HODLers,” who are selling off their holdings.
While some have blamed traditional financial players (TradFi) like BlackRock for these declines, Balchunas insists that it is long-term Bitcoin investors who are responsible for the sell-off.
Coinbase vs. BlackRock: Who is to Blame for the Bitcoin Price Drop?
Rumors that Coinbase is issuing Bitcoin IOUs for BlackRock have raised concerns about possible market manipulation.
The speculation suggests that BlackRock may be shorting Bitcoin through its ETF products by borrowing through Coinbase without holding an equivalent amount of real Bitcoin on a 1:1 basis.
Crypto analyst Tyler Durden has popularized this theory, pointing to Coinbase transactions as evidence that the exchange is helping traditional financial players suppress Bitcoin prices.
Durden’s theory goes further, claiming that Coinbase’s actions have directly affected the price of Bitcoin at various market peaks and troughs.
His argument is based on data showing that Coinbase is often the largest buyer and seller at key price points, which he sees as a sign of market manipulation.
Durden also suggested that BlackRock could ultimately cause a market crash or a significant price decline, limiting Bitcoin’s gains.
However, Coinbase CEO Brian Armstrong has publicly denied these allegations.
He explained that the process of issuing and burning Bitcoin ETFs is completely transparent and is carried out on the blockchain, and is subject to frequent audits, eliminating the possibility of foul play.
Armstrong also clarified that while Coinbase serves institutional clients like BlackRock, it does so under regulated agreements and with confidentiality obligations that prohibit the sharing of specific data, including client addresses.
Notably, critics like Tron founder Justin Sun have also expressed skepticism about Coinbase's wrapped Bitcoin (cbBTC), pointing to the lack of proof of deposit. He called it a "ridiculous combination."
