On Saturday, an unsubstantiated rumor about Coinbase writing Bitcoin IOUs for BlackRock in order to suppress the price of the leading cryptocurrency started spreading like wildfire on the X social media platform.
One social media post, which has contributed to mushrooming the insane conspiracy, managed to accumulate thousands of likes.
The term "IOU," which is an acronym for "I owe you," refers to tokens that are meant to represent a debt to another party. The crux of the recent BlackRock rumor is that the financial giant actually owns such Conbase-issued IOUs instead of physical Bitcoin.
However, multiple experts were quick to clarify that there is not even a modicum of truth to this wild rumor.
Godfrey BenjaminNate Geraci, president of The ETF Store, stated that market participants should rest assured that exchange-traded funds (ETFs) fully own the underlying Bitcoin.
"It’s real. And it’s spectacular. That simple. Period. End of story," he added.
Geraci recalled how the same conspiracy theory emerged with physical gold ETFs back in the day. "Anyone perpetuating this stuff doesn’t understand how ETFs work," he added.
Gamza KhanzadaevMeanwhile, Joe Carlasare, a Chicago-based commercial litigation attorney, has explained that Coinbase, BlackRock, an auditor, two accounting firms, and no fewer than four law firms would all need to conspire in order to pull off such a scheme. The odds of such a scenario appear to be extremely small.
BlackRock's Bitcoin ETF was launched earlier this year to much fanfare alongside a slew of competing products. It has attracted more than $20 billion in year-to-date flows, breaking multiple records.
Vladislav Sopov
Dan Burgin
U.Today Editorial Team