As the bitcoin (BTC) derivatives market expands, a claim has emerged that the 21 million supply cap has effectively been neutralised, but industry experts countered that this confuses the supply structure with price formation.

Cointelegraph reported on Feb. 24 that a recent analysis viewed more than 5 million times on X said the spread of bitcoin derivatives and financial products such as cash-settled futures and ETFs is undermining bitcoin’s fixed-supply-based value. Robert Kendall, author of The Kendall Report, said the emergence of such products means bitcoin’s scarcity is, in theory, no different from an infinite supply.

But digital asset industry officials stressed that while derivatives can affect price volatility and short-term supply and demand, they cannot change the supply itself on the blockchain.

Harriet Browning (헤리엇 브라우닝), vice president at Twinstake, said that even if institutions invest in bitcoin through ETFs or a digital asset treasury (DAT), no new coins are issued. She said the 21 million cap remains valid. She assessed that recent trends are instead strengthening inflows of funds with a long-term holding bias rather than short-term speculative players.

Luke Nolan (루크 놀란), head of research at CoinShares, also cited the gold market as an example. He said gold also has a huge "paper market" with futures, ETFs and unallocated accounts, but that does not change gold reserves underground. He said the same logic applies to bitcoin.

Bitcoin’s issuance is limited by code to 21 million coins. New coins are issued about every 10 minutes in the form of mining rewards, and those rewards follow a "halving" structure that cuts them in half every four years. As of February 2026, about 19.99 million BTC is estimated to have been mined, but there is also the possibility that up to 4 million coins have been permanently lost due to forgotten passwords or an owner’s death. This means the effective circulating supply could be smaller.

Some analysis also says the core of the dispute lies not in supply but in changes to the price discovery mechanism. In recent years, derivatives trading volume has often exceeded spot volume. In late 2023, CME Group’s bitcoin futures ranked first by open interest, and since then ranking competition among global exchanges has continued.

Browning outlined 3 channels through which derivatives and ETFs affect the spot price. First, when a gap opens between prices formed in the futures market and the spot price, arbitrage occurs and generates spot demand. Second, if banks sell bitcoin-linked products, they create spot demand by buying physical bitcoin through ETFs to hedge. Third, changes in funding rates in the perpetual futures market can spur arbitrage and lead to spot buying or selling.

Nima Beni, founder of crypto leasing platform BitLease, also said derivatives simply allow investors to gain exposure without directly holding bitcoin and do not change the supply cap. Kendall also clarified that his claim did not mean "erasing the blockchain’s scarcity." He said he was pointing out that derivatives change the way the marginal price is set.

Ultimately, the shared understanding on both sides is clear. Bitcoin’s 21 million cap does not change technically. But as ETFs, futures and structured products spread, the path and leadership of price formation are increasingly shifting to derivatives markets linked to traditional finance. Supply remains the same, but the way value is negotiated is evolving rapidly.