There’s been a lot of speculation on social media this week claiming that Bitcoin’s price has been suppressed through coordinated selling at the US market open. The perspective suggests   that Bitcoin’s 21 million supply cap doesn’t matter because Wall Street can fabricate unlimited synthetic exposure via ETFs.

While this might make for a compelling story, it's also completely misguided.

I’ve spent the last decade building investment products that sit at the intersection of crypto and traditional markets. I run a team that structures ETFs, manages index portfolios, and works with authorized participants (APs)—the intermediaries that create and redeem ETF shares—daily. So when I see market structure wildly misunderstood, I feel obligated to push back.

First, it’s worth a revisit of how ETF shares are created and redeemed. Unlike mutual funds, ETF issuers rely on APs to create (purchase) or redeem (sell) shares of its ETF. These APs act as market makers, facilitating the liquidity necessary to keep the net asset value of the ETF in line with the value of its underlying assets. To create new ETF shares the AP buys the underlying asset(s) and exchanges this with the ETF provider for shares of the ETF. To redeem or sell ETF shares, the AP sells an equivalent value of the underlying asset(s).

This process works across asset classes, including crypto. However, crypto trades 24/7 while crypto ETFs trade on US exchanges between 9:30am and 4:00pm Eastern. When US markets open, firms running strategies that require net exposure to be zero (e.g., options market makers, basis traders, ETF arbitrageurs) need to rebalance. If BTC rallied overnight, for example, these firms typically sell some of their position at the open to get back to neutral. If BTC fell overnight, they buy. This creates a predictable pattern: overnight gains tend to get partially faded, overnight losses tend to get partially supported. But it is not a form of market manipulation. It’s merely the mechanical consequence of a 24/7 asset meeting a market that only operates 6.5 hours a day.

Why does this context around crypto ETF market structure matter for a professional investor seeking exposure to this asset class? For two reasons: 

1. Bitcoin’s supply cap cannot be manipulated

There is a view that the use of derivatives can “break” Bitcoin’s 21 million supply cap. This shows a fundamental misunderstanding of how these instruments work and have worked for over 150 years. Every derivatives contract has two sides—a long and a short. These contracts don’t create new BTC any more than an options contract on Apple stock creates new Apple shares. Market makers who sell options hedge by buying or selling actual BTC in the spot market or ETFs, directly transmitting demand to the base layer. A well-functioning derivatives market doesn’t dilute supply. It accelerates price discovery.

 

2. Crypto’s market structure is rapidly maturing 

 

Until bitcoin ETFs were launched in early 2024, there were few ways for investors to hedge their risk and exposure to crypto. With the launch of ETF options and other derivatives, crypto is now not only becoming more embedded into traditional financial market infrastructure, but it is evolving into a highly liquid asset class that is allowing for strategies that employ a variety of risk and hedging strategies. As I noted last month, the partnership between Nasdaq and CME on the Nasdaq CME Crypto Index is a perfect example of this maturation. Traditional financial market plumbing is coming to crypto at a rapid pace, and investors in ETFs should benefit from lower spreads, higher liquidity, and more product choices. And, just last week, CME announced that crypto futures will begin to trade 24/7 later this year. This development, among many others, is a clear sign that crypto is disrupting traditional models, and we think this will ultimately benefit investors.     

 

The crypto thesis remains strong 

Crypto markets, like other financial markets, aren’t perfect. But the real source of price instability isn’t regulated ETF market makers running textbook arbitrage strategies. This is much more likely driven by overall supply and demand dynamics, but also the unregulated offshore derivatives markets with opaque mechanics and limited oversight. This is part of the reason why we believe it is so important for the US Congress to approve digital asset market structure legislation (CLARITY Act). Investors deserve more clarity and certainty around the regulation of this industry and the financial markets built around it.  

In the meantime, conflating normal market structure with price manipulation doesn’t protect investors—it misleads them. And it distracts from the structural issues that actually deserve scrutiny. Liquidity is central to well functioning capital markets and the market structure around ETFs helps ensure this liquidity doesn’t dry up. The firms running market-making operations for these products are making them tradeable for the millions of investors now accessing crypto through ETFs in their brokerage accounts.

The ETF infrastructure connecting to traditional markets is working as designed and we’re optimistic the CLARITY Act will be approved in the coming months and provide even more regulatory certainty for this space.

Speculation around market manipulation can make for great engagement on social media. Market structure is boring. But boring is what builds functioning and deeply liquid markets. And this is exactly what crypto needs to fulfill its potential as a legitimate asset class.

 

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^{NCIQ: Effective January 20, 2026, the Fund changed its name from Hashdex Nasdaq Crypto Index US ETF (NCIQ) to Hashdex Nasdaq CME Crypto Index ETF (NCIQ)}

^{Effective January 20, 2026, the index changed its name from Nasdaq Crypto Index (NCI) to Nasdaq CME Crypto™ Index.}

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