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Bitcoin analyst Willy Woo highlights a significant challenge currently facing BTC, potentially hindering its future growth prospects. In a recent presentation at TOKEN2049, Woo unveiled a chart demonstrating the growing disparity between “paper” , referring to derivative instruments representing BTC, and the actual readily tradable coins. He observes that the ratio of “paper BTC” (encompassing the cumulative value of futures contracts) compared to the genuinely liquid and actively traded BTC has reached a level where approximately 20-30% more BTC is being actively traded in derivative markets. This development, he argues, counteracts the bullish supply shock. Woo’s concern centers around the expanding presence of Bitcoin derivatives, which, in his view, are siphoning away from the core BTC market. This shift, he believes, is enabling price manipulation and resulting in weaker market rallies. The analyst this situation to the relative abundance and accessibility of US dollars (USD) in contrast to BTC. He contends that the futures and derivatives markets empower institutional players to significant amounts of capital, permitting them to exert artificial selling pressure on Bitcoin. Woo characterizes the proliferation of these markets as a primary adversary of Bitcoin, pointing to their role in dampening the magnitude of BTC’s price surges compared to its early years. Woo further his viewpoint by underscoring the outsized trading volumes in the futures markets compared to the spot markets. He asserts that as long as this imbalance persists, the behavior of spot markets will remain influenced by the gravitational pull of futures markets rather than the reverse scenario. Consequently, Woo believes there is a deliberate strategy to delay the introduction of a spot exchange-traded fund ( ). He argues that for the past seven years, the development of spot market liquidity has been stunted while futures markets have flourished, considerably outpacing their spot counterparts in terms of growth and trading activity.
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