Topic: Everything you wanted to know about Grayscale BTC Trust but were afraid to ask! - page 14. (Read 16372 times)

this DCG sell off. is not the same thing as proposed last month. where Grayscale would buy back some shares

this is DCG (mother) selling mother shares back to the OTC market. flooding the market thus excess supply, lower demand

seems DCG doesnt have free cashflow to over all of its bills(debts) so is selling off assets including its news media website coindesk

firing employees, selling assets and also sister companies.. seems DCG is not healthy at all

and these shares being sold and coindesk(if sold) wont total the amount needed to clear all debts

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actually come to think of it.. running some scenarios through my head while writing the aboce
imagine DCG had 1000 shares of $7.10 (simplifying the numbers for demo)
which were rated as locking to 1000 x $15.41 of ethereum.

DCG can sell their shares for $7.1k and later if grayscale done the 'share buyback' proposal grayscale can buyback 1000 shares for now under $7.1k (using a loan from DCG)
which then means they 'could ' by disassociating 1000 shares from the trust..  then remove $15.41k of ethereum from the trust

thus keep all other customers locked in whilst freeing up ether for half of ethers price.. but that would involve the second phase(proposed last month(buyback)) happening for them to gain from it

Guess what?
The discount reacted immediately.



No big surprises here, just self-inflicted harm.
Pointing south and heavy.

ethereum (spot) is at a high speculative premium hype price on retail markets(CEX)
whilst bitcoins is still at a low speculative price on retail markets

so a good business plan is for DCG to offload ethereum backed shares(ETHE otc) rather than bitcoin backed shares

(as soon as "unstaking" is allowed on ether PoS there will be a mass sell of correction of eth to its new corrected LOWER value of 95% less than current. so a great time to sel on a high)

DCG has started selling shares of crypto trusts in Grayscale, stating that this is simply a rebalancing of its portfolio. FT says that DCG recently sold shares of the ethereum fund, we are talking about selling 25% of the fund's shares for $ 22 million at several auctions since January 24. The company sells for about $8 per share, the last time DCG sold shares of the ethereum fund was in 2021.

Indeed, why DCG does not allow investors to buy back their shares for coins held in trusts.the answer is simple too much income is generated by interest on asset management.

Source: https://www.ft.com/content/abee7e2e-1d18-4a68-aac5-665869db250f

they dont lose control
CB still have control. the main circulating currency is done via tax, debt, min wage LAWS

what your confused about is the citizen level savings/spending.. which is not central bank control. its the commercial bank service
central banks dont care about that. they only care about making profit at the top end. which they can increasingly do by ridding the 3rd layer services like visa/mastercard and just have a 2 layer system of central-commercial banks

anyway
central banks have wanted to invest in crypto (for their internal investments of corporate profit). central banks dont offer citizen accounts. of fiat or cbdc or crypto. never have
central banks want to hold crypto but were stopped by the IMF/BIS. but that looks to change in 2025

..
separately from that. at the commercial-citizen level. we are seeing big institutions offering crypto gateways/investment schemes and such

we will see more of blackrock/ark doing deals for trusts, mining and exchanging, both at public spot(CEXand DEX) and also at private OTC

now getting to this topics point
while some call grayscale a killer whale. there are bigger whales(blue/humpback) such as ark/blackrock that would love to take over DCG's positions

I am quite familiar with the banking system plumbing, and while I share the usual concerns about CBDC, I am also curious about how the CB’s are going to implement it without damaging the banking system.

When I told you CB are against BTC or crypto I was indeed referring to the loss of control embedded in this choice: CB don’t want to give up the very powerful monetary policy control.

here is the thing
central banks are the mother cash provider to commercial banks and sister to the tax - treasury..
central banks are not the banks that customers have accounts with
they print the money. but dont give it to citizens direct

when commercial banks make mortgage agreements(in digital account balance) the COMMERCIAL BANK has to hold a % of paper money to keep ATM's filled to meet any expected cash daily withdrawals. meaning central banks only make profit to fill the treasury when commercial banks make debt
central banks make NO profits(to put into treasury) when people move their bank balance via visa/mastercard

the IRS get taxes when money moves between users(income/gains) and yes the IRS get taxes on gains of crypto. so crypto is not a threat its actually peoples reliance on visa/mastercard that has reduced central banks profits for treasury

which is why central banks want to bring the "fast payments"/"tap and pay" into the fold of central-commercial banks. rather than the likes of visa/mastercard who are making 2% tx fee where banks get nothing

central banks also. had international rules (IMF/BIS) where they could only hoard certain currency as reserves(leaning favour to the petro dollar) it was the central banks that begged BIS for a 5% ability to hoard decentralised cryptos like btc. and a random % of certain stable coin. where by the BIS compromised in the draft protocol for 2025 to be 2% (currently 0% still)

so its not the central banks hate of crypto. its their aversion to risk due to their BIS rules they follow
and again the central bank hoard of crypto is not about consumer level/retail service offering to customers of btc. its the central bank internal investment for the central bank profiting(adding more value to the national treasuries)

central banks are a business, but so is the IRs . and together they only make profit to feed the treasury when money moves/is swapped(wire transfers and debt creation). they dont make money on people saving it or microspending it on debit cards. so if people are trading currencies via wire transfering fiat to create another persons/businesses 'income' to increase. and creating debt. then central banks get profit

they dont see crypto "taking over" fiat/cbdc becasue of min wage, tax, fines, debt laws that keep fiat/cbdc in circulation

they see crypto as a open option currency to move in and out of. meaning wire transfer commercial bank payments to make and destroy account balance meaning  destroying 'cash' for free to then make commercial banks buy fresh 'cash' and IRS tax on those incomes when swaps are done

I have very strong view against this projection. Central banks are known for having a very strict tolerance for those to try to steal the power from them. So I don't expect them adopting bitcoin as it would be a self-inflict damage.  

we have had a decade of whales trying to poke their finger in and dig into the majority of businesses/services of bitcoin. (DCG, silvergate and a few other names)

i think the next generation of institutions/whales are starting to dig their fingers into the previous
the next ones go by the name of blackrock Ark and a few other names

then from 2025 we will see the central banks being able to hoard and grab bitcoin as business reserve(though current drafts only allow 2-5% of there collateral/reserves to be bitcoin)

That is a description of a ponzi scheme and it appears that this bear market is where it will prove if GBTC is one or not.

I reckon the cryptospace might be waiting for 2 more VIP terminations or bankruptcy before the end of the bear market. The list of VIPs is Changpeng Zhao of Binance, Barry Silbert of Grayscale and Michael Saylor of Microstrategy. There will be only one winner and it appears that it might be Michael Saylor hehehe. I have mentioned this already, Binance might be more in danger of insolvency than speculated.

I do agree with his points: the SEC is delaying a long overdue decision and acting against the interest of potential subscribers. The final decision, be it either approval or explicit denial (as an hyperbole), should have been made months ago.

Now a little bit about what concerns Grayscale. So Grayscale CEO Michael Sonnenshein gave a short interview to CNBC after his speech in Congress, where he says that he is optimistic about the upcoming March 7 court hearings in the Grayscale v. SEC case, a decision on which is expected in Q2 or Q3 this year. A rather stingy interview about the meeting of Michael Sonnenshein with congressmen of both chambers regarding the protection of investors' interests related to the SEC's refusal to convert the Grayscale bitcoin trust into an ETF, but let's hope that after the meeting the CEO has grounds for optimism.

https://www.youtube.com/watch?v=RQfxappCEFo

It will be interesting to hear from our resident Greyscale expert @filippone  whether he thinks the Genesis bankruptcy is going to take them down as well, or at least their fund. Considering that there is (yet another) $10 billion of money due to investors.

anything where a company of any kind is too eager to say "yes we accept your money" but then does not allow redemptions/refunds and say "go find another fool to take the shares off your hands.." is scammy, well not really a good service to trust atleast

heck even the ETH merge became awful by letting people easily stake. but then not having code to unstake where users have to find other market methods to swap between themselves while stuck in stake
(oh await the price bubble correction when unstaking code is activated, ETH price is too inflated bubble for its new 99% lower base bottom value due to becoming PoS instead of PoW costing)
....
if say years ago any CEX allowed fiat deposits to buy BTC. but didnt allow trading-out to get fiat back out from same CEX. ..those CEX would look more scammy
..
when madoff done his ponzi where he didnt allow redemptions. he could have easily avoided alot of prison by just telling his customers to trade share ownerships amongst themselves if they wanted to exit whilst still allowing madoff to refuse to offer redemptions direct

It appears the loan that the Digital Currency Group has received from Genesis Global is being used to give the early investors the liquidity they need to cashout from their original investment in DCG. Where did the $900 million that was sent to Genesis Global come from? From Gemini. Where did Gemini get the $900 million they sent to Genesis Global? From Gemini Earn depositors.

I am not calling DCG a ponzi scheme, however, it appears that it is becoming one or has become one already.

thats barrys game though

setting up businesses, trusts and shell companies is a way a human can say "i didnt do it" by saying "it was company X"


notice when times are good he calls out how the companies are part of the group and he has offered them advice and instructions on business strategy and proposals..
when things are bad he highlights how they have their own management teams and make their own decisions and how he even as a board member was not involved in said decisions

even in his latest announcements you can see him do it
says he is not involved in genesis bankruptcy negotiations with creditors.. but then says how DCG is

he cant help himself to pretend he had no involvement but at same time be involved

https://dcgupdate.com/ - jan 20th letter
FLIP
FLOP

FLIP
FLOP

oh and by the way
https://dcgupdate.com/ - jan 10th letter
the underline sounds like "grayscale" to me.. funny how he doesnt want to direct name drop where most of DCG loan funnelled funds went to

The comedy show in the cryptospace continues hehehe. On June 25, 2021, this was Barry Silbert's tweet. Was he implying that his companies were not part of the daisy chain of borrowers and lenders or was he implying that he was part of it but he is not a part of the weak link? It appears he is very much mistaken if he was implying that he was not part of the weak link and he was lying if he was implying that he was not part of the daisy chain.



There is a daisy chain of borrowers and lenders in the crypto space -- most well capitalized, but some are not

Lots of leverage still in the ecosystem...including in some non-obvious places

Important to understand counterparty risk and where are the weak links in the chain

Source https://mobile.twitter.com/barrysilbert/status/1408191462324441092



In any case, the cryptospace comedy show might end with Justin Sun as the king of the cryptospace hehehehehe.

There is no exact data on where Genesis Global invested, but one thing is for sure that they confirmed themselves is the loss of hundreds of millions of dollars due to loans provided to the bankrupt crypto-hedge fund Three Arrows Capital, even in the report for Q3 2022 Genesis Trading there is no breakdown by individual positions, just general figures such as "The Genesis Credit Department has provided loans in the amount of about $8.4 billion"

https://info.genesistrading.com/hubfs/quarterly-reports/2022/Genesis22Q3QuarterlyReport.pdf

Upd: What is interesting is that DCG owes its Genesis subsidiary $1.65 billion. includes loans in the amount of $575 million, due in May 2022, and a promissory note in the amount of $1.1 billion, due in June 2032

https://www.coindesk.com/business/2023/01/20/digital-currency-group-owes-subsidiary-genesis-global-over-165b/

Gemini to earn yield for depositors from their Earn product, sent the coins to Genesis Global as the source of yield. However, it appears that Genesis Global sent those coins to Digital Currency Group in exchange for a promissory note.

This is very head scratching because what would Barry Silbert do when Genesis Global has filed for bankruptcy already? Will he sell GBTC to honor the promissory note? What would happen to the coins behind GBTC?

I learned a lot of useful things, thank you