Crypto: ‘bitcoin Scarcity Is Dead’: Crypto Executives Push Back On Viral Claim

Derivatives don’t mint new Bitcoin, analysts say, pushing back on viral claims that state paper BTC has broken the 21-million cap.

A market analysis viewed almost 5 million times on X states that Bitcoin derivatives have turned the cryptocurrency’s 21-million-supply cap into a “theoretically infinite” one.

Past Bitcoin (BTC) falls had a clear catalyst, but sharp drops in the opening months of 2026 have sparked several theories, ranging from digital asset treasuries (DATs) blowing up under pressure to a lingering hangover from October’s mass liquidation cascade.

Robert Kendall, author of “The Kendall Report,” claimed he cracked it in his viral X post. He argued that Bitcoin’s valuation logic based on fixed supply “died” once cash-settled futures, exchange-traded funds (ETFs) and other financial instruments were layered on top of the asset.

However, executives and researchers across the digital asset industry rejected Kendall’s analysis. Several told Cointelegraph that leverage affects price dynamics without changing Bitcoin’s underlying supply.

Harriet Browning, vice president of sales at institutional staking company Twinstake, told Cointelegraph, “When institutions allocate via ETFs and DATs, they are not diluting scarcity, as there will still only ever be 21 million. They are not minting new Bitcoin.”

“Instead, they are putting Bitcoin into the hands of long-term institutional holders who deeply understand its value proposition, not speculative traders looking for a quick exit,” she added.

When Bitcoin was first introduced to the world, the only way to acquire it was to buy it from other enthusiasts, mine it or trade it for pizza. Soon, crypto exchanges became available and opened retail access to the spot market.

In 2026, investors can also gain exposure through financial products built on spot crypto. To put it simply, Bitcoin now has a paper market of its own. However, skeptics of Kendall’s analysis said that a paper market does not damage Bitcoin’s scarcity.

“Gold has a massive paper market in futures, ETFs and unallocated accounts that dwarfs physical supply, yet nobody argues gold isn’t scarce. Paper claims don’t change the amount of gold in the ground, and the same logic applies to Bitcoin,” Luke Nolan, a senior research associate at CoinShares, told Cointelegraph.

Source: CoinTelegraph