I can see that you are participating honestly and sincerely, but, there are some absolutely spectacular misconceptions about Bitcoin and how it works in your reply here.
.There’s no way a nation-state could "naked short" Bitcoin with hundreds of billions. To be able to do that you must control the underlying market, but this is not possible in the Bitcoin ecosystem. Bitcoin’s liquidity It's currently severely limited, and all purchases must take possession of the actual Bitcoin. A transfer must take place. The naked shares cannot simply disappear. And with a $1.9 trillion market cap, trying to short at that scale, in a market with price discovery measured it in minutes instead of days or weeks like gold, such a transaction would spike the price instead of crashing it. Markets don’t work like that—printing infinite money doesn’t mean That there will be Bitcoin out of thin air to buy
Sure, Bitcoin has seen staggering 90% corrections, but those were organic market events, not deliberate manipulation. Reflexivity cuts both ways: panic selling can drop prices, but massive shorting could just as easily trigger a rally. Attempting something like this would probably lead to the short positions getting liquidated, creating a feedback loop that pushes prices even higher.
Bitcoin’s decentralized nature and fixed supply make it hard to manipulate at scale. While there’s always risk in any market, the idea that a nation-state could single-handedly "tank" Bitcoin like this doesn’t hold water.
All of the modern ETF's include provisions for paper in lieu of Bitcoin at a small premium until such time as they can be settle onchain. Ostensibly, this is to allow them to sell BTC-ETF shares and then go find coins on the OTC markets (thus not moving the price), which can often take several days. However, this provision can absolutely be abused. Some ETFs also loan out their Bitcoin to other marketplaces in order to leverage their assets. It is definitely possible in the modern marketplace to do a naked short as long as you have sufficient capital.
I don't think it would be as hard to manipulate as you imply. There simply hasn't yet been such an existential threat to the existing order that would make such manipulation attractive.
Anyway, I stand by my skepticism that many investors aren't considering what I wrote above as plausible, and thus I'm not sure the reflexivity is as serious as was implied.
Sure, that's cool. I'm absolutely not denying that you have a good point. You are absolutely right that in commodity markets like gold and silver, naked short selling involves selling contracts for commodities that the seller neither owns nor intends to borrow, leading to an excess of "paper" claims over the actual physical supply. This practice can artificially suppress prices and create market distortions. Similarly, Bitcoin futures-based ETFs, such as the ProShares Bitcoin Strategy ETF (BITO), hold futures contracts rather than actual Bitcoin. This setup can result in discrepancies between the ETF's performance and Bitcoin's spot price, especially during market conditions like contango, where futures prices are higher than the expected spot price at maturity.
My point revolved mainly around BlackRock's iShares Bitcoin Trust, (IBIT) which is structured as a spot Bitcoin ETF, meaning it holds actual Bitcoin to mirror the cryptocurrency's market price. The fund's assets consist primarily of Bitcoin held by a custodian on behalf of the Trust.
Let's hope we see more spot ETFs entering the market, and that this doesn't explode into a unregulated hellhole.
I can see that you are participating honestly and sincerely, but, there are some absolutely spectacular misconceptions about Bitcoin and how it works in your reply here.
.There’s no way a nation-state could "naked short" Bitcoin with hundreds of billions. To be able to do that you must control the underlying market, but this is not possible in the Bitcoin ecosystem. Bitcoin’s liquidity It's currently severely limited, and all purchases must take possession of the actual Bitcoin. A transfer must take place. The naked shares cannot simply disappear. And with a $1.9 trillion market cap, trying to short at that scale, in a market with price discovery measured it in minutes instead of days or weeks like gold, such a transaction would spike the price instead of crashing it. Markets don’t work like that—printing infinite money doesn’t mean That there will be Bitcoin out of thin air to buy
Sure, Bitcoin has seen staggering 90% corrections, but those were organic market events, not deliberate manipulation. Reflexivity cuts both ways: panic selling can drop prices, but massive shorting could just as easily trigger a rally. Attempting something like this would probably lead to the short positions getting liquidated, creating a feedback loop that pushes prices even higher.
Bitcoin’s decentralized nature and fixed supply make it hard to manipulate at scale. While there’s always risk in any market, the idea that a nation-state could single-handedly "tank" Bitcoin like this doesn’t hold water.
All of the modern ETF's include provisions for paper in lieu of Bitcoin at a small premium until such time as they can be settle onchain. Ostensibly, this is to allow them to sell BTC-ETF shares and then go find coins on the OTC markets (thus not moving the price), which can often take several days. However, this provision can absolutely be abused. Some ETFs also loan out their Bitcoin to other marketplaces in order to leverage their assets. It is definitely possible in the modern marketplace to do a naked short as long as you have sufficient capital.
I don't think it would be as hard to manipulate as you imply. There simply hasn't yet been such an existential threat to the existing order that would make such manipulation attractive.
Anyway, I stand by my skepticism that many investors aren't considering what I wrote above as plausible, and thus I'm not sure the reflexivity is as serious as was implied.
Sure, that's cool. I'm absolutely not denying that you have a good point. You are absolutely right that in commodity markets like gold and silver, naked short selling involves selling contracts for commodities that the seller neither owns nor intends to borrow, leading to an excess of "paper" claims over the actual physical supply. This practice can artificially suppress prices and create market distortions. Similarly, Bitcoin futures-based ETFs, such as the ProShares Bitcoin Strategy ETF (BITO), hold futures contracts rather than actual Bitcoin. This setup can result in discrepancies between the ETF's performance and Bitcoin's spot price, especially during market conditions like contango, where futures prices are higher than the expected spot price at maturity.
My point revolved mainly around BlackRock's iShares Bitcoin Trust, (IBIT) which is structured as a spot Bitcoin ETF, meaning it holds actual Bitcoin to mirror the cryptocurrency's market price. The fund's assets consist primarily of Bitcoin held by a custodian on behalf of the Trust.
Let's hope we see more spot ETFs entering the market, and that this doesn't explode into a unregulated hellhole.