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ETF expert refutes Coinbase and BlackRock Bitcoin manipulation claims

GrafaGrafa2024/09/16 00:00
By:Isaac Francis

A recent rumor claiming that Coinbase issued Bitcoin (CRYPTO:BTC) IOUs to BlackRock to manipulate the cryptocurrency's price has been dismissed by experts in the field.

The unverified claims, which gained traction on the social media platform X, suggested that BlackRock held IOUs issued by Coinbase instead of actual Bitcoin, sparking concern among some investors.

The term "IOU," meaning "I owe you," generally refers to tokens representing debt to another party.

The rumor implied that BlackRock was holding these Coinbase-issued IOUs rather than physical Bitcoin, allegedly allowing the financial firm to influence Bitcoin's price.

Nate Geraci, president of The ETF Store, responded to the speculation by affirming that exchange-traded funds (ETFs) fully own the underlying Bitcoin they report.

"It’s real. And it’s spectacular. That simple. Period. End of story," Geraci stated.

He noted that similar conspiracy theories have circulated in the past regarding physical gold ETFs, suggesting a lack of understanding about how ETFs function.

"Anyone perpetuating this stuff doesn’t understand how ETFs work," Geraci added.

Joe Carlasare, a Chicago-based commercial litigation attorney, also questioned the feasibility of such a scheme.

He explained that it would require collaboration between Coinbase, BlackRock, an auditor, two accounting firms, and at least four law firms, making the scenario "extremely unlikely."

BlackRock's Bitcoin ETF, which was launched earlier this year, has drawn significant investment interest, with more than $20 billion in flows reported year-to-date.

Despite the success of the ETF, experts reiterate that the rumor lacks credibility and that the ETF holds actual Bitcoin, as stated.

While the rumors have generated discussion, the consensus among experts is clear: the claims are unfounded, and the integrity of Bitcoin ETFs remains intact.

At the time of reporting, the Bitcoin (BTC) price was $59,429.40.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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