Bitcoin Price Debate: Paper Bitcoin Exists or Not

Generated by AI AgentCoin World
Monday, Jun 30, 2025 8:38 am ET1min read
BTC
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Adam Back, a prominent figure in the early history of

Bitcoin
and the creator of Hashcash, has addressed the growing controversy surrounding the concept of "paper Bitcoin." This term refers to Bitcoin that is not backed by actual BTC on the blockchain, including futures, synthetic assets, or contracts that promise exposure to Bitcoin without holding the
real asset
. Some members of the crypto community believe that this "fake" BTC is flooding the market, potentially suppressing Bitcoin's price despite strong institutional demand.

Back took to social media to dismiss the idea of paper Bitcoin, asserting that large buyers are actually taking delivery and storing their BTC with custodians. He argued that hiding billions of fake BTC is not realistic and that if such a large amount of synthetic BTC existed, there would be visible signs. Back's stance is that the institutional buyers are genuinely holding their Bitcoin, which contradicts the notion of a market flooded with paper Bitcoin.

However, not everyone agrees with Back's perspective. Lawrence Lepard, an investment manager and author, countered by pointing to large futures positions as evidence of the existence of paper Bitcoin. Lepard highlighted that Binance shows $12 billion of perpetual futures outstanding and that the global figure is around $30 billion. He argued that these numbers represent synthetic BTC impacting the market without ever touching the blockchain, suggesting that the data supports the presence of paper Bitcoin.

This debate is significant because it touches on the fundamental question of how Bitcoin's price is being shaped in real time. If the market is indeed full of paper Bitcoin, it could be muting real demand and suppressing the price. Conversely, if paper Bitcoin is not a significant factor, other forces might be at play in keeping the price in check. As Bitcoin continues to hover near key levels, the community remains divided on this issue, and questions about the authenticity of the market's Bitcoin supply are likely to persist.