Hedge fund expert and co-founder/CEO of Morgan Creek Capital, Mark Yusko, has commented on the complex methods that exchange-traded funds (ETFs) use to impact the price of Bitcoin (BTC).
Yusko’s analysis emphasizes the strategy of manipulating Bitcoin, a tactic that brings to mind the traditional strategy on Wall Street of driving down prices to acquire assets at a cheaper price. He explains how entities can push down the price of Bitcoin through negative sentiment or direct market actions, allowing them to accumulate more Bitcoin at a lower price.
According to him, this method is not only widely used but has also been perfected in traditional markets for decades.
“The price drops 10% overnight because there’s a bunch of manipulation in the futures market… If you want to buy a lot of something, what do you do? You sell. You tell everyone how bad things are, you create a short position, you drive down the price, so you can buy more at a lower price,” explains Yusko.
He highlights another peculiar pattern, where the price of Bitcoin experiences significant fluctuations outside of regular trading hours.
Yusko attributes this abnormality to the strategic actions of large institutional participants who manipulate the closing price of Bitcoin ETFs, thereby impacting the valuation of the asset overnight. This manipulation allows the relevant entities to profit from the price discrepancies they create.
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This strategy involves the use of the futures market, where traders can speculate on the future price of Bitcoin without actually owning the asset. Bitcoin futures contracts influence its current value through speculative trading rather than physical transactions.
The separation from physical assets allows market manipulation through speculative trading, distorting the true dynamics of supply and demand for the asset.
