Earlier this week, crypto analyst Tyler Durden accused Coinbase on X (formerly Twitter) of allowing BlackRock, the issuer of the largest spot Bitcoin exchange-traded fund (ETF), to borrow Bitcoin without providing collateral (IOU: I owe you). This, Durden argued, would allow for market manipulation and profit from the resulting price fluctuations.

Coinbase CEO Brian Armstrong explained that these ETFs are minted, burned, and settled on-chain within a single business day, and institutional clients have the option to use trading finance and over-the-counter options before the trades are fully settled.

Bloomberg ETF analyst James Seyffart dismissed the allegations, stating, "I don't buy into these rumors and conspiracy theories at all. This is just another one in a string of negative comments about ETFs." Seyffart reiterated the need for more issuers, including BlackRock, to share their digital wallet addresses publicly to improve transparency.

Eric Balchunas, Bloomberg senior ETF analyst, criticized the Bitcoin community for blaming the recent market sell-off pressure on ETFs, "instead of introspection." He wrote in an X post: "People who invest in BTC are often skeptical of government and institutions (I get it). However, BlackRock 'is not playing around', and if Coinbase 'is messing around with their Bitcoin', the asset manager will 'go ballistic.'"