One more post from Bob Kendall on the topic of paper Bitcoin ( 
)
Copy-pasting the entire post from his twitter:
Kevin
you’re conflating custody with price discovery.
Yes, spot ETFs hold real BTC in custody. That’s not the question.
The question is whether those coins are removed from the price-setting float.
They are not.
Why:
• ETFs custody BTC via prime brokers
• Authorized Participants hedge ETF exposure with futures, options, and swaps
• Market makers short derivatives against ETF inventory
• The same BTC supports multiple paper claims
Result:
One coin → multiple price claims
That is textbook rehypothecation — even if the underlying asset is “physically held.”
This is identical to gold ETFs:
They hold real bars and yet paper gold trades 50–100× physical supply because price is set in derivatives, not vaults.
Bitcoin now works the same way:
– Futures
– Perpetuals
– Options
– ETFs
– Swaps
All referencing the same underlying BTC.
So scarcity still exists on-chain …
but it no longer exists where price is discovered.
That’s the entire point!
View quoted note →
X (formerly Twitter)
Bob Kendall (The Kendall Report) (@PortfolioXpert) on X
Kevin
you’re conflating custody with price discovery.
Yes, spot ETFs hold real BTC in custody. That’s not the question.
The question is wheth...
