According to Bloomberg analyst Eric Balchunas, BlackRock and Bitcoin ETFs have consistently stopped disastrous declines in the value of the crypto.
This is consistent with speculation that BlackRock is using Coinbase’s Bitcoin IOUs to control the market, thereby shorting BTC and potentially causing price drops.
Balchunas, who is often blamed for Bitcoin’s declines, claims that traditional investors have actually helped stabilize the price. According to him, many of the accusations stem from disbelief in Bitcoin’s core investors selling their assets.
Crypto analyst Ali Martinez showed that miners sold over 30,000 BTC in three days, indicating that there is significant selling pressure coming from the Bitcoin community itself.
#Bitcoin miners have sold more than 30,000 $BTC in the last 72 hours, worth approximately $1.71 billion! photo.twitter.com/OuaiIo7QZ9
— Ali (@ali_charts) September 11, 2024
Coinbase’s Alleged Price-Suppressing Role
Claims have surfaced that Coinbase could be helping BlackRock manipulate markets by issuing Bitcoin IOUs. Analyst Tyler Durden says BlackRock can short BTC using these IOUs without having the real coin at a 1:1 ratio.
Based on Durden’s public data research, he concluded that Coinbase’s actions were significant to BTC’s erratic swings.
BlackRock and Bitcoin ETFs Saving 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 lending rights. According to him, Coinbase publicly handles ETF mining and burning on-chain under frequent audits.
Armstrong stressed that non-disclosure agreements prevent Coinbase from disclosing institutional clients’ crypto addresses.
Bitcoin: Implications and Debates
Unverified Bitcoin IOUs and accusations of price manipulation could undermine investor confidence in BlackRock and Coinbase. But Coinbase’s status as a regulated, overseen company could help offset the bad feeling.
The dispute over Coinbase’s wrapped Bitcoin (cbBTC) is highlighting arguments over 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, “confiscible” asset.
No special treatment for BlackRock
Coinbase denies allegations of giving preferential Bitcoin loans to BlackRock. Armstrong affirmed the company’s transparency and compliance, and clarified cbBTC. As the industry grapples with concerns over centralization, Coinbase’s response will influence market sentiment.
At the time of writing, Bitcoin (BTC) fluctuate between $58,000 and $59,000 range. Analysts expect that the possible rate cuts by the Federal Reserve, scheduled for next week, will have a positive effect on BTC.
Previously, such macroeconomic movements have been positive and can provide signals that can be interpreted positively for the leading cryptocurrency.
Main image of PlasBit, chart from TradingView