Oddbean

This chart certainly raises questions as to whether or not #BlackRock actually custodies the volume of bitcoins it claims to custody. As far as I understand there is no on-chain proof of the existence of the #BTC from the BlackRock ETF. Isn’t a key tenet of #Bitcoin “don’t trust, verify”? Imagine if BlackRock is running Bitcoin fractional reserves? Maybe we’ve been too complacent by thinking we can let the wolf in and still play the game on our terms. https://image.nostr.build/07662b37c8ddb610871a33366e4e33fdfe017c7fe9ce9e754fcfcc355ba97ebe.jpg

It may be that BlackRock hasn't publicly provided its address(es), but other Bitcoin ETF providers have (like Bitwose, and Grayscale I think), and chain analysis has seemed to identify the addresses. Im not very familiar with this specific organization, it be be likely they are known. https://cointelegraph.com/news/spot-bitcoin-etfs-address-identified-transparency But this is an interesting theory that Spot Bitcoin ETF providers on the whole may be doing reactional reserve. Meaning that they will take money for an ETF, backed by X Bitcoin, but then they don't buy more Bitcoin on the market when they don't take on those additional investors?

If the bitcoins held by one ETF are isolated to one (or several addresses), then it should be fairly easy to identify these addresses. This article suggests that the bitcoins held by BlackRock are hold in one address which would allow us to verify the reserves but the ETF industry still needs to be more transparent and publicly list their addresses.