121 sats \ 2 replies \ @jk_14 16 Jun 2023 \ parent \ on: Blackrock spot ETF - let’s talk bitcoin
...and these institutions won't know if their "Bitcoin IOUs" are backed by real Bitcoins, or only created out of thin air
and even worse: we won't know if the whole market is not trashed by "paper Bitcoins" like gold market is with "paper gold"
from the other side:
https://en.coin-turk.com/what-happens-to-crypto-if-the-spot-bitcoin-etf-is-approved-here-is-the-gold-example/
BlackRock is too big to waste their time, imo.
So they already know it will be approved, probably before the halving ;)
You are correct however consider that if the bitcoin ETF is not backed by bitcoin and the price goes up, what do they account for the change in value of the ETF. (E.g. I sell you a paper bitcoin, price goes up and you come to redeem but I never had the bitcoin, I’m out of pocket)If the prices goes down and the bitcoin is not backed then they essentially have made money by selling you paper bitcoin.
So yes they can manipulate but not to excessive levels, at least I think
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and you come to redeem but I never had the bitcoin, I’m out of pocket
but not all will want to redeem "BlackRock Bitcoins" in the same time - and that's the same trick which allows banks with fractional reserve to exist still ;)
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