One more post from Bob Kendall on the topic of paper Bitcoin ( https://x.com/PortfolioXpert/status/2019237396563595317 )

Copy-pasting the entire post from his twitter:

Kevin
you’re conflating custody with price discovery.

Yes, spot ETFs hold real BTC in custody. That’s not the question.
The question is whether those coins are removed from the price-setting float.

They are not.

Why:

• ETFs custody BTC via prime brokers
• Authorized Participants hedge ETF exposure with futures, options, and swaps
• Market makers short derivatives against ETF inventory
• The same BTC supports multiple paper claims

Result:
One coin → multiple price claims

That is textbook rehypothecation — even if the underlying asset is “physically held.”

This is identical to gold ETFs:
They hold real bars and yet paper gold trades 50–100× physical supply because price is set in derivatives, not vaults.

Bitcoin now works the same way:
– Futures
– Perpetuals
– Options
– ETFs
– Swaps

All referencing the same underlying BTC.

So scarcity still exists on-chain …
but it no longer exists where price is discovered.

That’s the entire point!