‘Bitcoin scarcity is dead’: Crypto executives push back on viral claim

3 hours ago

A marketplace investigation viewed astir 5 cardinal times connected X states that Bitcoin derivatives person turned the cryptocurrency’s 21-million-supply headdress into a “theoretically infinite” one.

Past Bitcoin (BTC) falls had a wide catalyst, but crisp drops successful the opening months of 2026 person sparked respective theories, ranging from integer plus treasuries (DATs) blowing up nether pressure to a lingering hangover from October’s wide liquidation cascade.

Robert Kendall, writer of “The Kendall Report,” claimed helium cracked it successful his viral X post. He argued that Bitcoin’s valuation logic based connected fixed proviso “died” erstwhile cash-settled futures, exchange-traded funds (ETFs) and different fiscal instruments were layered connected apical of the asset.

However, executives and researchers crossed the integer plus manufacture rejected Kendall’s analysis. Several told Cointelegraph that leverage affects terms dynamics without changing Bitcoin’s underlying supply.

Harriet Browning, vice president of income astatine organization staking institution Twinstake, told Cointelegraph, “When institutions allocate via ETFs and DATs, they are not diluting scarcity, arsenic determination volition inactive lone ever beryllium 21 million. They are not minting caller Bitcoin.”

“Instead, they are putting Bitcoin into the hands of semipermanent organization holders who profoundly recognize its worth proposition, not speculative traders looking for a speedy exit,” she added.

Scarcity, mislaid coins and the question of effectual float

When Bitcoin was archetypal introduced to the world, the lone mode to get it was to bargain it from different enthusiasts, excavation it oregon trade it for pizza. Soon, crypto exchanges became disposable and opened retail entree to the spot market.

In 2026, investors tin besides summation vulnerability done fiscal products built connected spot crypto. To enactment it simply, Bitcoin present has a insubstantial marketplace of its own. However, skeptics of Kendall’s investigation said that a insubstantial marketplace does not harm Bitcoin’s scarcity.

“Gold has a monolithic insubstantial marketplace successful futures, ETFs and unallocated accounts that dwarfs carnal supply, yet cipher argues golden isn’t scarce. Paper claims don’t alteration the magnitude of golden successful the ground, and the aforesaid logic applies to Bitcoin,” Luke Nolan, a elder probe subordinate astatine CoinShares, told Cointelegraph.

Bitcoin is often compared to golden for similarities similar headlining the internet generation’s ain golden rush, being a store of worth and being a hedge against currency debasement. It is besides programmed to a hard proviso headdress that doesn’t fluctuate adjacent erstwhile concern products are built connected apical of it, overmuch similar a golden barroom wouldn’t magically sprout retired of its ain derivatives.

Like precious metals, caller Bitcoin enters the marketplace done a process called mining. Instead of digging the earth, the strategy rewards those who verify transactions connected the blockchain astir each 10 minutes. Those rewards are sliced successful fractional each 4 years, truthful Bitcoin’s proviso maturation slows implicit time, on with the magnitude of virgin Bitcoin entering the economy.

As of February, astir 19.99 cardinal BTC has been mined, though Nolan calls this metric misleading, arsenic not each of these coins are disposable for investors. Users tin suffer their passwords oregon instrumentality them to their graves. Up to 4 cardinal coins are estimated to beryllium permanently lost.

With much spot Bitcoin becoming inaccessible, Nolan claimed that the organization entree furniture really reinforces Bitcoin’s scarcity.

“Spot ETFs necessitate carnal BTC to beryllium held successful custody, and successful 2025 alone, combined ETF and firm treasury holdings grew significantly. That is existent proviso being pulled disconnected the market,” helium said.

Bitcoin’s displacement to derivatives-led terms formation

Even critics of Kendall’s proviso statement admit that Bitcoin’s short-term terms find present leans heavy connected instruments tied to organization markets.

Derivative enactment has progressively shifted to accepted concern venues. CME futures overtook Binance successful BTC futures unfastened involvement successful precocious 2023, though Binance precocious regained the lead.

“Derivatives markets person go the superior venue for expressing organization views connected Bitcoin, and arsenic a result, they present play a cardinal relation successful spot terms discovery,” said Browning.

Browning added that derivatives and ETFs power Bitcoin’s spot terms done 3 main transmission channels.

First, markets similar CME power short-term terms find due to the fact that organization traders explicit their bullish oregon bearish views successful futures earlier the spot market. When futures prices diverge from spot prices, traders opt for arbitrage strategies, specified arsenic ground trades, to adjacent the gap. According to Browning, hedge funds routinely bargain spot Bitcoin oregon its ETFs portion shorting CME futures to seizure the premium betwixt the two.

Second, erstwhile banks merchantability Bitcoin-linked notes to clients, they typically hedge their vulnerability by buying Bitcoin done ETFs, efficaciously creating much spot demand.

Third, crypto-native perpetual futures tin spill implicit into the spot marketplace done funding-rate arbitrage. When backing rates are positive, dense agelong positioning encourages traders to bargain spot Bitcoin and abbreviated futures to gain backing payments, adding spot demand. When backing turns negative, that travel tin reverse and unit the price.

“Today, derivatives volumes often transcend spot volumes, and galore organization participants similar derivatives, alongside ETFs, for superior efficiency, hedging and abbreviated exposure,” Browning said.

“Spot markets progressively service arsenic the colony and inventory layer, portion derivatives progressively power marginal terms discovery, and caller terms levels are negotiated.”

Derivatives don’t delete Bitcoin’s scarcity from the blockchain

The emergence of Bitcoin’s insubstantial marketplace means investors nary longer person to straight clasp BTC to summation exposure.

Futures and perpetual contracts let investors to explicit bullish oregon bearish views, hedge hazard oregon deploy leverage. Similar derivatives person agelong existed successful commodities markets without altering the carnal magnitude of gold, lipid oregon different assets successful circulation.

Nima Beni, laminitis of crypto leasing level BitLease, told Cointelegraph:

“The premise that synthetic vulnerability destroys scarcity is arsenic flawed arsenic a misapplied commodity-market analogy utilized astir insubstantial gold. It was incorrect then; it’s incorrect now.”

Kendall defended his presumption aft Bitcoiners equipped with their ain arguments flooded his viral post.

“I’m not arguing [derivatives] ‘delete’ scarcity from the blockchain. What I’m saying is they displacement wherever marginal terms is set,” helium said.

Bitcoin’s 21-million headdress remains unchanged successful code. No derivative contract, ETF oregon structured merchandise tin mint caller coins beyond that limit. But what has evolved astir Bitcoin is terms discovery.

Derivatives progressively signifier marginal terms enactment earlier flows filter backmost into spot. That alters however and wherever Bitcoin’s worth is negotiated.

Both Kendall and his critics yet hold connected that point.

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