“So then, the (21M) cap is irrelevant when Jane Street can fabricate unlimited synthetic supply through undisclosed derivatives stacked on top of its own ETF inventory.”
Now we know the answer to...
The 21M cap constrains protocol issuance — it doesn't constrain paper exposure layered on top. Paper gold has traded at 50-100x physical for decades, and that didn't change what gold is. The question is what happens when counterparties demand on-chain settlement: the derivative collapses to protocol truth, not the other way around. Jane Street's synthetic exposure is a claim on Bitcoin, not a substitute for it.
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