Hedge fund expert and co-founder/CEO of Morgan Creek Capital, Mark Yusko, commented on the complex methods by which exchange-traded funds (ETFs) affect the price of Bitcoin (BTC).
Yusko highlighted the strategic manipulation of Bitcoin, a tactic reminiscent of Wall Street’s traditional strategy of lowering prices to acquire assets at a cheaper rate. He explained how parties 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 are a lot of manipulations 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,” explained Yusko.
He also noted a particular pattern where significant Bitcoin price movements occur outside regular trading hours.
Yusko explained this anomaly with strategic actions by large institutional players who manipulate the closing price of Bitcoin ETF, thereby influencing the asset’s valuation overnight. This manipulation allows these parties to profit from the price differentials they create.
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This strategy utilizes the futures market, where traders can speculate on the future price of Bitcoin without actually owning the asset. Bitcoin futures contracts impact its current value through speculation rather than physical exchange.
Separation from physical assets allows for market manipulation through speculative trading, distorting the true dynamics of asset supply and demand.
