Mark Yusko, hedge fund expert and co-founder and CEO of Morgan Creek Capital, commented on the complex methods that exchange-traded funds (ETFs) have on the price of Bitcoin (BTC).
Yusko emphasized the strategic manipulation of Bitcoin, a tactic reminiscent of Wall Street’s traditional strategy of lowering prices to buy assets at a cheaper price. He explained how entities can lower BTC prices through negative sentiments or direct market actions, allowing them to accumulate more at lower prices.
According to him, this method is not only widespread but has also been perfected over decades in traditional markets.
“Prices drop 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 it is, initiate short positions, push the price down so you can buy more at a lower price,” Yusko explained.
He also noted a peculiar pattern where significant price movements of Bitcoin occur outside regular trading hours.
Yusko explained this anomaly with the strategic actions of large institutional players who manipulate the closing price of Bitcoin ETF, thereby influencing the asset’s valuation overnight. This manipulation allows these entities to profit from the price differentials they create.
Read more:
$54.5 Billion Withdrawn from Bitcoin ETF: How Far Can the Price Go?
This strategy utilizes 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 speculation rather than physical exchange.
The separation from physical assets enables market manipulation through speculative trading, distorting the true dynamics of supply and demand for the asset.
