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Coinbase Dispels Bitcoin IOU and cbBTC Rumors

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Coinbase has addressed recent rumors that it was issuing Bitcoin IOUs to BlackRock for its spot exchange-traded fund (ETF) product.

These rumors emerged as TRON blockchain founder Justin Sun criticized the firm’s wrapped Bitcoin product, cbBTC.

Coinbase Clarifies ETF Operations Amid Bitcoin IOU Rumors

On September 14, crypto analyst Tyler Durden suggested that Coinbase was issuing BTC IOUs to BlackRock. This would mean BlackRock could borrow Bitcoin to short it without proving they held a 1:1 ratio.

Durden referenced Cryptoquant data, asserting that Coinbase was the largest buyer and seller at market highs and lows. He speculated that BlackRock might use its position to negatively influence Bitcoin’s price, either by capping it or causing a major pullback.

Read more: How To Trade a Bitcoin ETF: A Step-by-Step Approach

BlackRock Bitcoin ETF Flows
BlackRock Bitcoin ETF Flows. Source: SoSoValue

Meanwhile, Tron network founder Justin Sun further had earlier sparked controversies over Coinbase’s new wrapped Bitcoin product, cbBTC. Sun claimed cbBTC lacked Proof of Reserve, had no audits, and could freeze balances at any time. He described cbBTC as “trust me” Bitcoin, implying that a US government subpoena could seize all Bitcoin held through it.

“cbbtc=central bank btc. There is no more ridiculous combination in the world than putting central banks and Bitcoin together. I imagine this is a day Satoshi Nakamoto could never have envisioned when creating Bitcoin,” Sun added.

Coinbase CEO Brian Armstrong responded to these allegations by clarifying how ETFs function and addressing concerns about cbBTC. He explained that ETF mints and burns typically settle on-chain within one business day. He also noted that the firm’s institutional clients use trade financing and OTC options before settling trades on-chain.

Further, Armstrong stated that his firm was not authorized to disclose institutional client addresses, including those of BlackRock.

“If you want audits, Deloitte audits us annually, we’re a public company. I doubt our institutional clients want people dusting all their addresses, and it’s not our place to share for them. This is what it looks like if you want a bunch of institutional money to flow into Bitcoin,” the Coinbase CEO emphasized.

Coinbase's cbBTC
Coinbase’s cbBTC. Source: Dune Analytics

Regarding cbBTC, Armstrong noted that its users trust a centralized custodian to manage the underlying Bitcoin, and Coinbase has never claimed otherwise.

Notably, other market experts have also refuted the IOU claims. Nate Geraci, president of The ETF Store, dismissed the rumors, emphasizing that the ETFs fully own the assets they claim.

“Whatever Coinbase is or isn’t doing, rest assured the ETFs 100% own underlying BTC. It’s real. And it’s spectacular. That simple. Period. End of story. Heard same thing back in the day w/ physical gold ETFs. Anyone perpetuating this stuff doesn’t understand how ETFs work,” Geraci wrote.

Read more: 7 Best Crypto Exchanges in the USA for Bitcoin (BTC) Trading

Bitcoin ETF Total BTC Holdings
Bitcoin ETF Total BTC Holdings. Source: HeyApollo

Meanwhile, Bloomberg analyst Eric Balchunas pointed out that people find it hard to accept that actual market participants, rather than ETFs, are responsible for Bitcoin’s recent price fluctuations.

“I get why these theories exist and people want to scepegoat the ETFs. [Because] it is too unthinkable that the native HODLers could be the sellers. But they are. The call is coming from inside the house. All the ETFs and BlackRock have done is save BTC’s price from the abyss repeatedly,” Balhcunas stated.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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BlackRock Approved by FCA to Operate as UK Crypto Asset Firm

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BlackRock, the world’s largest asset manager, received approval from the UK’s Financial Conduct Authority (FCA) to operate as a crypto asset firm.

This marks a significant milestone for the investment giant, allowing it to extend its influence in the growing digital asset market.

BlackRock Joins Crypto Elite with FCA Approval in the UK

With this approval, BlackRock can operate its newly launched European Bitcoin exchange-traded product (ETP) as a UK entity.

According to the FCA’s website, BlackRock officially became the 51st company registered as a crypto asset firm on April 1, 2025. The firm joins a select group of financial entities, including Coinbase, PayPal, and Revolut, which have met the FCA’s stringent regulatory requirements.

FCA approves BlackRock registration
FCA approves BlackRock registration. Source: FCA website

BlackRock’s iShares Bitcoin ETP recently launched on the Euronext stock exchanges in Paris and Amsterdam. As BeInCrypto reported, this marked an expansion of the firm’s footprint in the European crypto investment market.

To attract investors, the product was introduced with a temporary fee waiver. It reduced its expense ratio to 0.15% until the end of the year. Once the waiver expires, the fee will revert to 0.25%, aligning with competing products like CoinShares’ Bitcoin ETP.

The iShares Bitcoin ETP is designed for institutional and informed retail investors. It offers a regulated and cost-effective way to gain exposure to Bitcoin. This move also positions BlackRock as a leader in the European digital asset space, catering to the growing demand for crypto-based financial products.

Meanwhile, the FCA has faced criticism for its cautious approach to crypto regulation. It has only approved around 9% of all applicants seeking registration as crypto asset firms.

“This low level of application approval signifies potential concern for the UK’s ambition to become a crypto hub,” Alan Vey, founder of web3 firm Aventus and a former Brevan Howard developer, said recently.

The regulator has defended its strict policies. A statement on its website articulated that many submissions lack essential information or fail to meet compliance standards.

“We have rejected submissions that didn’t include key components necessary for us to carry out an assessment, or the poor quality of key components meant the submission was invalid,” the FCA wrote.

Therefore, BlackRock’s FCA approval is not a mean feat. It marks another step in the mainstream adoption of crypto. With the UK now part of BlackRock’s growing crypto asset operations, the firm continues to push forward in integrating Bitcoin into traditional finance (TradFi).

BlackRock also manages approximately $12 trillion in assets (AUM) and continues actively expanding its crypto market presence. It launched its iShares Bitcoin Trust (IBIT) in the US in January 2024. The financial instrument has since grown into the largest US spot Bitcoin ETF, managing nearly $49 billion in assets.

BlackRock’s IBIT AUM
BlackRock’s IBIT AUM. Source: SoSoValue

Moreover, the surge in institutional interest in Bitcoin ETFs has been remarkable. In just one year, US spot Bitcoin ETFs have attracted over $95 billion in investments, SoSoValue data shows. This highlights the increasing demand for regulated Bitcoin investment vehicles.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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What It Means for Bitcoin

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An expert has cautioned that the reverse yen carry trade is currently unfolding, albeit at a slower and more controlled pace.

This could have significant implications not only for traditional financial markets but also for cryptocurrencies like Bitcoin (BTC).

Why Investors Should Pay Attention to the Yen Carry Trade?

For context, the yen carry trade is a strategy in which investors borrow yen at low interest rates and invest the funds in higher-yielding assets, such as the US dollar or technology stocks. The goal is to profit from the difference in interest rates.

Nonetheless, this strategy’s risk arises from currency fluctuations. If the yen appreciates, investors converting the investment back to yen to repay the loan may see reduced or eliminated profits.

According to Michael A. Gayed, this scenario appears to be materializing now. 

“The problem today is that those borrowing costs are starting to get more expensive. Traders who were able to access virtually free capital for years are now finding themselves sitting on costly margin positions that they’re potentially being forced to unwind,” he said.

In his recent report, Gayed explained that rising borrowing costs compel traders to offload dollar-denominated assets. This, in turn, heightens market volatility and depresses the prices of risk assets.

yen carry trade Dollar to Yen Exchange Rate
Dollar to Yen Exchange Rate. Source: The Lead-Lag Report

Notably, this happened last year as well. Gayed pointed out that in August 2024, the Bank of Japan’s decision to raise interest rates twice sparked a significant rally in the yen. Yet, at the same time, the S&P 500 saw an approximate 10% correction.

He added that the subsequent rebound alleviated investor concerns. Nevertheless, he believes the real issue is that the situation was never fully resolved. 

“Big carry trade unwinds don’t just last a couple of weeks, and conditions are suddenly normalized,” Gayed stressed.

He added that the current market conditions resemble a similar situation. Notably, the Japanese 10-year yield has surged to 1.56%, the highest since 2008. As these yields climb, the yen strengthens, and the carry trade dynamics begin to shift. 

“The 10-year yield continues to climb higher and close the interest rate differential on comparable 10-year US Treasury yields. That’s going to continue fueling strength in the yen that may continue into the later stages of 2025. And as long as the yen continues to strengthen, whether it’s quickly and slowly, that’s going to keep unwinding any outstanding carry trade that’s still out there. And it’s probably a lot,” he stated.

Moreover, Gayed suggested that the Bank of Japan will likely continue raising rates. Meanwhile, the Fed might possibly lower them in the coming months, further solidifying his outlook.

He also focused on the correlation between the S&P 500 and the yen. Gayed noted that the yen’s rise preceded the recent S&P 500 pullback by several weeks. 

The correction could also be linked to an anticipated US growth slowdown and potential tariffs. Yet, he emphasized that the reverse carry trade is particularly risky due to its potential to escalate quickly, especially in the current macroeconomic climate.

“The market is plenty capable of correcting on its own, given the fears associated with tariffs and slowing economic growth. If you add people being forced to sell their US equity holdings in order to close out their short yen positions on top of that, it’s easy to see how a bad situation quickly becomes worse. And it’s already happening. Japan is still the real risk,” he claimed.

Now, the question is, why will this impact Bitcoin? Given its close correlation with the S&P 500, a correction in the latter could spell trouble for BTC. Analyst Lark Davis pointed out that Bitcoin and the S&P 500 have been closely linked since 2023.

Bitcoin and S&P 500 correlation
Bitcoin and S&P 500 correlation. Source: X/LarkDavis

“So as we’re trying to determine where Bitcoin goes from here, the unfortunate truth is that it all probably depends on what happens to the major stock indices,” he noted 

Davis also advised crypto investors to monitor the broader economy, the stock market, and the M2 money supply, both in the US and globally.

For now, the largest cryptocurrency continues to navigate volatility ahead of President Trump’s tariff announcement. In fact, BeInCrypto reported that spot Bitcoin ETFs have recorded outflows for three consecutive days.

Bitcoin Price Performance
Bitcoin Price Performance. Source: BeInCrypto

On the price front, Bitcoin has dipped 3.1% over the past week. At press time, the coin was trading at $85,042, representing small gains of 0.8% over the past day.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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Bitcoin to $250K? Hayes Links Price Surge to Fed’s QE Move

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Arthur Hayes, former CEO of BitMEX, has predicted that Bitcoin (BTC) could soar to $250,000 by the end of the year.

However, this prediction is contingent on the US Federal Reserve (Fed) shifting its monetary policy toward Quantitative Easing (QE).

Bitcoin to $250,000, Hayes Predicts

Hayes argues that a halt in Quantitative Tightening (QT) and a return to liquidity injections would trigger a substantial Bitcoin rally.

“If my analysis regarding the interplay of the Fed, Treasury, and banking system is correct, then Bitcoin hit a local low of $76,500 last month, and now we begin the ascent to $250,000 by year-end,” read an excerpt in his latest blog.

This prediction hinges on his belief that central banks, particularly the Fed, will be forced to intervene to support financial markets, ultimately driving Bitcoin higher.

Further, the BitMEX co-founder directly ties Bitcoin’s potential price movement to the Fed’s approach to monetary policy. He argues that the central bank’s response to mounting fiscal pressures will lead to an end of QT and a de facto return to QE.

“Powell proved last week that fiscal dominance is alive and well and that he will do whatever it takes to ensure the Treasury can fund itself at reasonable rates. Therefore, I am confident QT, at least regarding treasuries, will stop in the short to medium term,” Hayes added.

Based on these, Arthur Hayes sees this as a pivotal moment for Bitcoin, emphasizing that the pioneer crypto would “scream higher once this is formally announced.”  

Hayes also reinforced his confidence in the prediction, stating that his Bitcoin target is attainable as the bond market, banks, and Congress (which he terms BBC) will pressure the Fed into action.

British financial expert Raoul Pal supports the thesis of a bullish outlook for Bitcoin price. The former Goldman Sachs executive pointed to macroeconomic indicators that suggest a Bitcoin rally is imminent.

Raoul Pal shared a chart correlating the global M2 money supply and Bitcoin’s price. Based on history, Bitcoin tends to rise around 10 weeks after M2 increases, with Pal’s analysis suggesting that Bitcoin may soon enter a bullish phase.

“The waiting game is almost over…the 10-week lead is my preferred… but,” Pal remarked.

Bitcoin vs Global M2 Supply
Bitcoin vs Global M2 Supply. Source: Raoul Pal on X

QCP Capital’s Stagflation Warning

Adding another layer to the macroeconomic picture, analysts at QCP Capital warn that if stagflation takes hold, the Fed could lean toward hiking rates instead of cutting them. Such an action would complicate the bullish outlook for Bitcoin.

“Markets continue to price 2.5 cuts in 2025. The Fed finds itself in a tight corner with consumer confidence and soft data coming in weak which may portend weaker GDP in Q2. At the same time, tariff-induced inflationary pressures could start building after April 2,” the analyst wrote.

The optimism comes despite Bitcoin logging its worst first quarter (Q1) performance in seven years. This notwithstanding, analysts point to a bullish momentum, suggesting that a price recovery is on the horizon.

“Sellers have dried up, and buyers seem comfortable with current price levels – setting the stage for a structural supply shortage. April-May could turn into a consolidation zone – a calm before the next impulse,” stated market analyst Axel Adler Jr. 

Veteran investors are also increasing their Bitcoin holdings, signaling a phase of accumulation that often precedes strong price rallies. Market data also indicates that declining selling pressure from Bitcoin holders is paving the way for a potential push toward $90,000.

Bitcoin (BTC) Price Performance
Bitcoin (BTC) Price Performance. Source: BeInCrypto

Meanwhile, Standard Chartered has noted Bitcoin’s growing role as an inflation hedge. This further solidifies the pioneer crypto’s place as a macroeconomic asset in uncertain financial times.

Nevertheless, as macroeconomic concerns continue challenging Bitcoin’s attractiveness, Gold is progressively presenting as an alternative store of value. BeInCrypto also reported that gold is outshining Bitcoin as a haven amid Trump’s 2025 tariff chaos.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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