Deep state

My guess is that it's contracts for actual bitcoin on Coinbase.

Yeah, I also think that Coinbase (and Binance) are running the fractional reserve playbook. Maybe not as bad as the banks - which have a 0% reserve requirement since COVID - but there is 0% chance they have all the bitcoin that their customers have “bought” using their platforms.

While you're probably right, I don't think they have to "have" the bitcoin. They can facilitate the transaction and the transfer of the key ownership. As defined in the contract.

I’m not saying they’re doing anything illegal. Just risky. Self-custody is critical. At some point people will stop looking at bitcoin as an investment and start considering it a necessity. It will be interesting to see how Coinbase and Binance respond if/when self-custody becomes more of an imperative for bitcoin “investors”.

Didnt coinbase create their own "wrapped" bitcoin chain? Maybe they bought that.

Someone sold onto the market last week, moved a $1bn in value