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Zafar Naik
Zafar Naik
Author
Reviewed by:
Qadir AK
Reviewed
Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.
- Jun 30, 2025 12:24 UTC
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Adam Back Shuts Down Paper Bitcoin Controversy
Adam Back denies claims of “paper Bitcoin,” insisting institutions are taking real custody.
Lawrence Lepard points to $30B in futures as evidence of synthetic BTC impacting the market.
The debate raises concerns over price suppression and transparency in Bitcoin trading.
Is there more Bitcoin in the market than there should be? That’s the latest debate heating up crypto circles.
Bitcoin pioneer Adam Back stepped in this week to shut down growing claims of “paper Bitcoin” but not everyone is buying his take.
Read on to know what the buzz is all about.
What’s Paper Bitcoin Anyway?
The term “paper Bitcoin” refers to Bitcoin that isn’t backed by actual BTC on the blockchain. Think futures, synthetic assets, or contracts that promise exposure to Bitcoin without ever holding the real thing.
Some in the community believe this “fake” BTC is flooding the market and that it’s one reason Bitcoin’s price hasn’t broken higher, despite strong institutional demand.
Adam Back: “They’re Taking Delivery”
Adam Back, the cypherpunk behind Hashcash and a key figure in Bitcoin’s early history, isn’t convinced.
Taking to social media, he said the idea of paper Bitcoin is overblown especially when large buyers are actually holding their BTC.
“Billions of btc buying price stuck in $100-110k ‘must be paper bitcoin selling’ here’s another paper debunk. The guys buying big ticket amounts of btc are taking delivery: storing with custodians.”
He added that hiding that much extra Bitcoin simply isn’t realistic. If billions of fake BTC were out there, we’d see signs of it.
Not Everyone Agrees
Lawrence Lepard, an investment manager and author, fired back saying the data tells a different story. He pointed to large futures positions as proof that paper Bitcoin does exist.
“It is not hidden. Binance shows $12b of perpetual futures outstanding and worldwide ChatGPT says $30B. That is a lot of paper Bitcoin and that figure has grown rapidly (I monitor it),” Lepard said.
According to him, these numbers represent synthetic BTC that’s impacting the market without ever touching the blockchain.
Why This Debate Matters
This argument is about how Bitcoin’s price is being shaped in real time. If the market is full of paper Bitcoin, it could be muting real demand. If not, then something else is keeping the price in check.
For now, the community remains split. But as Bitcoin continues to hover near key levels, questions around what’s real and what’s not aren’t going away anytime soon.
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FAQs
“Paper Bitcoin” refers to synthetic assets like futures or contracts that promise Bitcoin exposure without holding actual BTC on the blockchain. Some worry this “fake” BTC is oversupplying the market, potentially suppressing real Bitcoin’s price despite strong institutional demand.
This debate matters because it directly impacts how Bitcoin’s price is shaped. If the market is indeed flooded with “paper Bitcoin,” it could be muting the true effect of real demand. Conversely, if not, other factors are at play in keeping Bitcoin’s price in check.
Examples of “paper Bitcoin” include Bitcoin futures contracts, synthetic assets, and other financial instruments that derive their value from Bitcoin’s price but do not involve the direct ownership or transfer of actual BTC on the blockchain.
Yes 
No 
