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Coinbase has addressed recent rumors that it was issuing Bitcoin IOUs to BlackRock for its spot exchange-traded fund (ETF) product.
These rumors emerged as TRON blockchain founder Justin Sun criticized the firm’s wrapped Bitcoin product, cbBTC.
On September 14, crypto analyst Tyler Durden suggested that Coinbase was issuing BTC IOUs to BlackRock. This would mean BlackRock could borrow Bitcoin to short it without proving they held a 1:1 ratio.
Durden referenced Cryptoquant data, asserting that Coinbase was the largest buyer and seller at market highs and lows. He speculated that BlackRock might use its position to negatively influence Bitcoin’s price, either by capping it or causing a major pullback.
Read more: How To Trade a Bitcoin ETF: A Step-by-Step Approach
BlackRock Bitcoin ETF Flows. Source: SoSoValue
Meanwhile, Tron network founder Justin Sun further had earlier sparked controversies over Coinbase’s new wrapped Bitcoin product, cbBTC. Sun claimed cbBTC lacked Proof of Reserve, had no audits, and could freeze balances at any time. He described cbBTC as “trust me” Bitcoin, implying that a US government subpoena could seize all Bitcoin held through it.
Coinbase CEO Brian Armstrong responded to these allegations by clarifying how ETFs function and addressing concerns about cbBTC. He explained that ETF mints and burns typically settle on-chain within one business day. He also noted that the firm’s institutional clients use trade financing and OTC options before settling trades on-chain.
Further, Armstrong stated that his firm was not authorized to disclose institutional client addresses, including those of BlackRock.
Coinbase’s cbBTC. Source: Dune Analytics
Regarding cbBTC, Armstrong noted that its users trust a centralized custodian to manage the underlying Bitcoin, and Coinbase has never claimed otherwise.
Notably, other market experts have also refuted the IOU claims. Nate Geraci, president of The ETF Store, dismissed the rumors, emphasizing that the ETFs fully own the assets they claim.
Read more: 7 Best Crypto Exchanges in the USA for Bitcoin (BTC) Trading
Bitcoin ETF Total BTC Holdings. Source: HeyApollo
Meanwhile, Bloomberg analyst Eric Balchunas pointed out that people find it hard to accept that actual market participants, rather than ETFs, are responsible for Bitcoin’s recent price fluctuations.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
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The post Coinbase Dispels Bitcoin IOU and cbBTC Rumors appeared first on Panther AI.
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These rumors emerged as TRON blockchain founder Justin Sun criticized the firm’s wrapped Bitcoin product, cbBTC.
Coinbase Clarifies ETF Operations Amid Bitcoin IOU Rumors
On September 14, crypto analyst Tyler Durden suggested that Coinbase was issuing BTC IOUs to BlackRock. This would mean BlackRock could borrow Bitcoin to short it without proving they held a 1:1 ratio.
Durden referenced Cryptoquant data, asserting that Coinbase was the largest buyer and seller at market highs and lows. He speculated that BlackRock might use its position to negatively influence Bitcoin’s price, either by capping it or causing a major pullback.
Read more: How To Trade a Bitcoin ETF: A Step-by-Step Approach
BlackRock Bitcoin ETF Flows. Source: SoSoValue
Meanwhile, Tron network founder Justin Sun further had earlier sparked controversies over Coinbase’s new wrapped Bitcoin product, cbBTC. Sun claimed cbBTC lacked Proof of Reserve, had no audits, and could freeze balances at any time. He described cbBTC as “trust me” Bitcoin, implying that a US government subpoena could seize all Bitcoin held through it.
Coinbase CEO Brian Armstrong responded to these allegations by clarifying how ETFs function and addressing concerns about cbBTC. He explained that ETF mints and burns typically settle on-chain within one business day. He also noted that the firm’s institutional clients use trade financing and OTC options before settling trades on-chain.
Further, Armstrong stated that his firm was not authorized to disclose institutional client addresses, including those of BlackRock.
Coinbase’s cbBTC. Source: Dune Analytics
Regarding cbBTC, Armstrong noted that its users trust a centralized custodian to manage the underlying Bitcoin, and Coinbase has never claimed otherwise.
Notably, other market experts have also refuted the IOU claims. Nate Geraci, president of The ETF Store, dismissed the rumors, emphasizing that the ETFs fully own the assets they claim.
Read more: 7 Best Crypto Exchanges in the USA for Bitcoin (BTC) Trading
Bitcoin ETF Total BTC Holdings. Source: HeyApollo
Meanwhile, Bloomberg analyst Eric Balchunas pointed out that people find it hard to accept that actual market participants, rather than ETFs, are responsible for Bitcoin’s recent price fluctuations.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Source link
The post Coinbase Dispels Bitcoin IOU and cbBTC Rumors appeared first on Panther AI.
Continue reading...