- Adam Back rejects “paper Bitcoin” claims, stating large buyers hold real BTC via custodians, making massive hidden fakes unlikely.
- Lawrence Lepard cites $30B in Bitcoin futures as proof synthetic BTC exists and influences prices without real backing.
Adam Back rejects assertions that “paper Bitcoin” dominates trading activity. The Blockstream CEO states large buyers physically hold their Bitcoin assets through custodians. Back bases his view on observed institutional behavior, arguing that hiding massive synthetic positions remains impractical.
$billions of btc buying price stuck in $100-110k "must be paper bitcoin selling" here's another paper debunk. the guys buying big ticket amounts of btc are taking delivery: storing with custodians. i know a lot of retail are leaving on exchange, but hard to hide that much paper.
— Adam Back (@adam3us) June 28, 2025
Lawrence Lepard presents opposing evidence. The investment manager cites $30 billion in perpetual futures contracts tracked globally. Lepard monitors this data routinely, identifying rapid growth in synthetic Bitcoin exposure.
“It is not hidden. Binance shows $12b of perpetual futures outstanding and worldwide ChatGPT says $30B. That is a lot of paper Bitcoin and that figure has grown rapidly (I monitor it),” Lepard said.
His analysis indicates these derivatives influence prices without blockchain settlement.
Understanding Paper Bitcoin
The term describes Bitcoin derivatives like futures contracts or synthetic assets. These instruments provide price exposure without actual Bitcoin ownership. Critics suggest excessive paper Bitcoin may suppress spot prices despite institutional demand.
Back asserts: “The guys buying big ticket amounts of bitcoin are taking delivery.” He references billions in blocked buy orders between $100,000-$110,000 as evidence of physical accumulation. Conversely, Lepard counters: “Binance shows $12b of perpetual futures outstanding.” He attributes observed price pressure specifically to these paper instruments.
Yes Adam, but it is not hidden. Binance shows $12b of perpetual futures outstanding and worldwide ChatGPT says $30B. That is a lot of paper Bitcoin and that figure has grown rapidly (I monitor it).
— Lawrence Lepard, "fix the money, fix the world" (@LawrenceLepard) June 28, 2025
This divergence highlights uncertainty about Bitcoin’s price formation. Synthetic instruments could potentially mute genuine demand signals if oversupplied. Alternatively, other factors may explain current price levels absent paper Bitcoin dominance. Market traders currently lack consensus on which view reflects reality. Blockchain verification mechanisms do not track off-exchange derivatives activity, creating opacity.
The discussion persists as Bitcoin trades near key thresholds. Resolution requires clearer derivatives reporting or on-chain evidence contradicting either position. Both parties agree, however, that retail investors often leave coins on exchanges—a separate risk factor from institutional custody practices.
Bitcoin Faces Downside Pressure as On-Chain Signals Weaken
Bitcoin currently trades at $108,129.78, showing a small increase of 0.68% over the last day. This price steadiness masks growing concerns from several network measurements. These measurements suggest increasing pressure to sell Bitcoin, potentially leading to a price decrease.
One key measurement, called Apparent Demand, has turned negative. This measurement shows whether new buyers can absorb Bitcoin being sold by miners and long-term holders. The negative reading indicates experienced holders and miners are distributing coins. At the same time, fresh demand appears limited, increasing short-term downside risk.
Miners are earning more than usual, shown by a 25.73% rise in the Puell Multiple to 1.26. This higher profitability often leads miners to sell more Bitcoin to cover costs. Simultaneously, the NVT Ratio has jumped 84.17% to 55.17.
This ratio signals that Bitcoin’s market value is rising faster than the value of transactions processed on its network. This divergence frequently happens before price corrections.
Nearly all Bitcoin holders currently show paper gains. Data indicates 98.82% of Bitcoin outputs are profitable, while only 1.17% show losses. While this seems positive, it also means fewer buyers feel compelled to purchase during dips. Extensive profit-taking can occur when gains are this widespread, weakening potential price support levels.
Exchange activity adds another concern
Bitcoin recorded a net inflow of $57.5 million, a change after a period of outflows. Positive netflows often mean holders are moving coins onto exchanges, possibly preparing to sell. This shift from accumulation to potential distribution could add selling pressure if market sentiment weakens.
Furthermore, active Bitcoin address growth continues to lag the price. The DAA divergence metric remains negative. Historically, this separation between price gains and actual user activity has preceded price pullbacks.
The current persistence of this negative divergence raises questions about the fundamental support for Bitcoin’s present valuation.
