Paper Bitcoin is a term used to describe representations of Bitcoin that exist off-chain and do not correspond to verifiable control of Bitcoin on the blockchain. It generally refers to claims, IOUs, or derivative products that provide exposure to Bitcoin’s price without granting direct ownership of the underlying asset.

The phrase was coined and popularized by the Bugle team during the Paper Bitcoin Summer of 2025, a period in which debates around Bitcoin custody, exchange solvency, and the growth of synthetic Bitcoin products gained widespread attention across the industry.

Meme from Vibes Capital Management from Summer of 2025, featuring Dylan, Steven, and David

Paper Bitcoin can include custodial exchange balances, wrapped assets, exchange-traded funds, and other financial instruments that track Bitcoin’s price but depend on third-party assurances. Critics argue that Paper Bitcoin increases perceived supply, distorts price discovery, and reintroduces counterparty risk.

The concept is often contrasted with on-chain Bitcoin, which can be independently verified and transferred without intermediaries.

See also: Paper Bitcoin Summer, Vibes Capital Management