Hedge fund expert and co-founder/CEO of Morgan Creek Capital, Mark Yusko, commented on the complex ways in which Exchange-Traded Funds (ETFs) impact the price of Bitcoin (BTC).
Yusko’s analysis emphasizes the strategy of manipulating Bitcoin – a strategy reminiscent of traditional Wall Street tactics of driving prices down to acquire assets at a discount. He explains how entities use negative sentiment or direct market actions to lower the price of Bitcoin, allowing them to accumulate more at a lower cost.
According to him, this method is not only widely used but has been perfected in traditional markets over decades.
“The price drops 10% overnight because there is a lot 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 build short positions, you drive prices down so you can buy more at a lower price,” Yusko explains.
He points out another peculiar pattern where significant fluctuations in Bitcoin prices occur outside of normal trading hours.
Yusko attributes this anomaly to strategic actions by large institutional participants who manipulate the closing price of Bitcoin ETFs, thereby affecting the valuation of the asset overnight. This manipulation allows related entities 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 physically owning the asset. Bitcoin futures contracts impact its current value through speculation rather than physical trading.
The separation from physical assets allows market manipulation through speculative trading, distorting the true dynamics of asset supply and demand.
