Bloomberg analyst Eric Balchunas recently stirred the crypto world with a bold assertion: BlackRock and Bitcoin ETFs have saved Bitcoin from a significant price collapse. His statement followed rumors about BlackRock, the world’s largest asset manager, receiving Bitcoin IOUs from Coinbase, which some believe is leading to BTC price suppression. As debates swirl, the role of BlackRock in Bitcoin’s recent performance comes under heavy scrutiny.
Balchunas Defends Bitcoin ETFs
In a post on X (formerly Twitter), Eric Balchunas rebuffed accusations that traditional financial players like BlackRock were behind Bitcoin’s price declines. According to him, the very ETFs people suspect of undermining Bitcoin are actually responsible for its price stability, having “saved it from the abyss” multiple times. Balchunas highlighted a common belief that native Bitcoin holders, also known as HODLers, couldn’t possibly be the ones selling their coins, leading many to blame institutional players.
However, Balchunas suggests that these Bitcoin natives are indeed the ones selling. He referenced fellow crypto analyst Ali Martinez, who recently revealed that Bitcoin miners sold over 30,000 BTC in just three days. This aligns with Balchunas’s argument that the sell pressure is coming from within the community, rather than being externally driven by institutional investors.
Bitcoin’s New Highs Thanks to ETFs
Bitcoin ETFs, particularly BlackRock’s, have been crucial in pushing BTC prices to new heights. Earlier this year, Bitcoin surged to an all-time high of $73,000, largely due to the influx of new money from ETFs. These funds attracted massive net inflows upon their launch, injecting liquidity into the market and driving prices upward. BlackRock, despite rumors, has maintained a firm grip on its BTC holdings, recording only three days of net outflows since its ETF launched in January 2024.
This underscores the positive impact of ETFs on Bitcoin’s performance, with institutional investors like BlackRock playing a pivotal role in sustaining the coin’s upward momentum.
Amid the praise, there are darker allegations involving BlackRock and Coinbase. Some, like crypto analyst Tyler Durden, claim that BlackRock is suppressing Bitcoin’s price by receiving Bitcoin IOUs from Coinbase. According to Durden, these IOUs allow BlackRock to borrow and short Bitcoin without holding the actual coins, effectively manipulating the market.
Durden supports his claim with data from Cryptoquant, alleging that Coinbase has been the largest buyer and seller at every major Bitcoin price peak and trough. He warns that BlackRock could eventually trigger a market top, causing a significant price crash or pullback.
Coinbase Responds to Allegations
Coinbase CEO Brian Armstrong has firmly denied these allegations. Armstrong clarified that the ETF mints and burns Bitcoin transparently and are settled on-chain. He emphasized that Coinbase’s operations are audited, with reports available for public scrutiny. Furthermore, Armstrong stressed that Coinbase cannot disclose the addresses of its institutional clients, including BlackRock, maintaining that the company’s practices are above board.
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As of now, Bitcoin is trading around $60,000, with market sentiment divided on its future direction. This week’s anticipated Federal Reserve rate cuts could provide a bullish push for Bitcoin, as macroeconomic events have historically benefited the cryptocurrency. Still, the question remains: are institutional players like BlackRock saving Bitcoin, or are they quietly orchestrating its price movements behind the scenes?
The debate is far from over, but one thing is certain — BlackRock’s involvement in Bitcoin will continue to shape the market’s future. Whether they are saviors or saboteurs remains a topic of intense speculation in the crypto community.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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