The price of bitcoin has dropped 72.9% in USD value since the crypto asset’s all-time high ten months ago and recently, bitcoin’s been trading for just under $19K per unit. This week two prominent crypto market influencers have been discussing how governments could suppress bitcoin markets by shorting the crypto asset. However, one of the individuals notes that the odds of doing so are “in the 0%-1% range.”
‘Enough Shorts in the System to Suppress Price’
Bitcoin’s price has been lower this week following the initial drop after the U.S. consumer price index (CPI) published last Tuesday which showed inflation was higher than expected. Moreover, the crypto economy, in general, could see another leg down after the U.S. Federal Reserve raises the benchmark bank rate.
The Crypto Fear and Greed Index (CFGI) shows sentiment has dropped from “fear” to “extreme fear” over the last day. On Saturday, the bitcoin analyst Willy Woo published a thread about the possibility of unlimited fiat and derivatives markets suppressing bitcoin prices.
The thread, called “A dummies guide to selling 42 million BTC,” talks about how Arthur Hayes created the first “BTC casino that real people used, trading billions per day.” Woo remarked that “Arthur gloriously opened the way for us to sell 10 BTC even when we only had 1 BTC — We just need people to take the other side of our bet,” Woo added.
After describing how Hayes created Bitmex in his own fashion, Woo discussed how CME Group, the world’s largest derivatives exchange, “launched a BTC casino where you could front USD to play.”
“Wall Street hedge funds loved that,” Woo’s Twitter thread notes. “What’s the limits on selling BTC now? Unlimited. Fiat is unlimited.” Woo further detailed that BTC had a $0.37 trillion market cap while the U.S. dollar is around $22 trillion.
The analyst added that $1.1 trillion was created during the last year and said the “theoretical shorting power with fiat” is colossal and that it’s “billions of BTC.” Woo stressed:
BTC doesn’t have to be killed, it just needs enough shorts in the system to suppress price. Without a large market cap, BTC doesn’t get to make global impact.
Taming Bitcoin
Woo isn’t the only person to discuss matters in this way, as a number of crypto proponents have said that bitcoin derivatives markets and even exchange-traded funds (ETFs) could harm BTC’s value. This fear has scared investors well…
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