BlackRock and Bitcoin ETFs, according to Bloomberg analyst Eric Balchunas, have consistently stopped disastrous declines in the value of the crypto.
This coincides with speculations that BlackRock uses Coinbase’s Bitcoin IOUs to control the market, therefore shorting BTC and perhaps triggering price declines.
Often blamed for Bitcoin’s declines, Balchunas contends that traditional investors have actually helped to stabilize its price. According to him, many charges result from incredulity about core Bitcoin investors selling off their asset.
Crypto analyst Ali Martinez showed miners offloaded over 30,000 BTC in three days, indicating a sizable selling pressure originates within the Bitcoin community itself.
#Bitcoin miners have sold over 30,000 $BTC in the last 72 hours, worth around $1.71 billion! pic.twitter.com/OuaiIo7QZ9
— Ali (@ali_charts) September 11, 2024
Alleged Price Suppression Role Of Coinbase
Claims have emerged that by issuing Bitcoin IOUs, Coinbase might be helping BlackRock to manipulate markets. Analyst Tyler Durden says BlackRock can short BTC using these IOUs without having the real coin in a 1:1 ratio.
Durden’s public data research helped him to come to the conclusion that Coinbase’s actions were important in the erratic fluctuations of BTC.
BlackRock And Bitcoin ETFs Saved BTC Price, Bloomberg Analyst Claimshttps://t.co/Pv2B3X5Ddf
— John Morgan (@johnmorganFL) September 15, 2024
Coinbase’s Defense And Transparency
Coinbase CEO Brian Armstrong responded by denying BlackRock special access to BTC borrowing rights. According to him, Coinbase settles ETF minting and burning on-chain under frequent audits publicly.
Armstrong underlined that confidentiality agreements prevent Coinbase from revealing crypto addresses of institutional customers.
Bitcoin: Implications And Debates
Unverified Bitcoin IOUs and allegations of price manipulation might erode investor faith in BlackRock and Coinbase. But Coinbase’s standing as a regulated, audited company might help to offset bad feeling.
The dispute about Coinbase’s wrapped Bitcoin (cbBTC) draws attention to arguments about centralized versus distributed assets. Tron founder Justin Sun criticized cbBTC’s lack of proof of deposit, audits, and ability to freeze balances, likening it to a centralized, “confiscatable” asset.
No Special Treatment To BlackRock
Coinbase denies allegations of providing preferential Bitcoin borrowing to BlackRock. Armstrong reaffirmed the company’s transparency and compliance while clarifying cbBTC. As the industry grapples with centralization concerns, Coinbase’s response will shape market sentiment.
At the time of writing, Bitcoin (BTC) is see-sawing in the $58,000 and $59,000 range. Analysts are expecting that the possible cuts on the rates by the Federal Reserve, which is planned next week, will have a positive effect on BTC.
Previously, such macro moves were bullish and may well give signs that can be interpreted positively for the flagship cryptocurrency.
Featured image from PlasBit, chart from TradingView
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