The discussion between Adam Back and Lawrence Lepard on 'paper Bitcoin' raises important questions about the real state of the cryptocurrency market.
Adam Back's Position
Adam Back, CEO of Blockstream, rejects assertions that 'paper Bitcoin' dominates trading activity. He states that large buyers physically hold their Bitcoin assets through custodians. Back's view is based on observed institutional behavior, arguing that hiding massive synthetic positions is impractical.
> 'Billions of dollars stuck in Bitcoin buying prices between $100,000 and $110,000 must mean there is paper Bitcoin selling. But those buying large amounts are taking delivery: storing with custodians.'
Lawrence Lepard's View
Lawrence Lepard, an investment manager, presents opposing evidence. He cites $30 billion in perpetual futures contracts tracked globally, indicating rapid growth in synthetic Bitcoin exposure.
> 'It is not hidden. Binance shows $12 billion of perpetual futures outstanding and worldwide ChatGPT says $30 billion. That is a lot of paper Bitcoin and that figure has grown rapidly.'
His analysis indicates these derivatives influence prices without blockchain settlement.
Current State of the Bitcoin Market
Bitcoin currently trades at $108,129.78, showing a small increase of 0.68% over the last day. However, several network measurements suggest growing pressure to sell, potentially leading to price decreases. The Apparent Demand indicator has turned negative, indicating that experienced holders and miners are distributing coins, while fresh demand appears limited.
The discussion around 'paper Bitcoin' highlights existing disagreements on the influence of synthetic assets on price formation and market conditions. Further research and clearer reporting on derivatives are necessary.
