Adam Back denies claims of โpaper Bitcoin,โ 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? Thatโs the latest debate heating up crypto circles.
Bitcoin pioneer Adam Back stepped in this week to shut down growing claims of โpaper Bitcoinโ but not everyone is buying his take.
Read on to know what the buzz is all about.
Whatโs Paper Bitcoin Anyway?
The term โpaper Bitcoinโ refers to Bitcoin that isnโt 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 โfakeโ BTC is flooding the market and that itโs one reason Bitcoinโs price hasnโt broken higher, despite strong institutional demand.
Adam Back: โTheyโre Taking Deliveryโ
Adam Back, the cypherpunk behind Hashcash and a key figure in Bitcoinโs early history, isnโt convinced.
Taking to social media, he said the idea of paper Bitcoin is overblown especially when large buyers are actually holding their BTC.
โBillions of btc buying price stuck in $100-110k โmust be paper bitcoin sellingโ hereโs another paper debunk. The guys buying big ticket amounts of btc are taking delivery: storing with custodians.โ
He added that hiding that much extra Bitcoin simply isnโt realistic. If billions of fake BTC were out there, weโd 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.
โIt 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),โ Lepard said.
According to him, these numbers represent synthetic BTC thatโs impacting the market without ever touching the blockchain.
Why This Debate Matters
This argument is about how Bitcoinโs 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 whatโs not arenโt going away anytime soon.
Never Miss a Beat in the Crypto World!
Stay ahead with breaking news, expert analysis, and real-time updates on the latest trends in Bitcoin, altcoins, DeFi, NFTs, and more.
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.