Topic: Everything you wanted to know about Grayscale BTC Trust but were afraid to ask! - page 2. (Read 17106 times)

LOL!



Of course, if you have outflows but the Bitcoin price keeps growing, in the end, your asset under management won't decrease, as the effect on price would offset that from the outflows.
Corollary: if the price increases, it would offset also the decrease in fees. Hence, Grayscale has little incentive to lower it.

Flows in GBTC are abating. Yesterday, we had a record-low outflow in GBTC, with the usual turnover on the other instruments.
Spreads to NAV are closing, liquidity is improving and spreads from market makers are becoming tighter.
All this highlights the situation normalising around GBTC, and they are becoming less relevant as we go on.
This is true until Genesis decides to dump their bag, of course.

the FTX related stuff was the "contagion"
this new buzzword "daisy-chain" appears to be another ordeal which silbert feels needs a new name

i guess its because its due to his company having so many sister companies playing in his backyard that the effects of one affect another and another and it comes round full circle like a necklace(daisy chain)

(satire analogy)
i can imagine silbert one day imagined his companies as daisys and imagined SEC gensler as the bully/crush.. so plucking at each daisy in his chain.. "he loves me, he loves me not, he loves me, he loves me not" when evaluating business risk of each company in DCG portfolio

as for grayscale. they are not sending coin to coinbase. they are releasing coin from coinbase.. literally every day
that said. last reports were of a 3394minus outflow
and 4018 is not much when talking about the scales they have. and the debts DCG have
~$200m (4018 at $50k) vs dcg $3b

4000btc is not even a quarter of their fee's for 2023 (grayscale earned like 16k coins in just fee's in 2023)

also worth noting. a $52k-$51k (2% change) is not a "dump", thats just daily opportunity

@franky1. However, the daisychain has ended already after the bankruptcy of FTX. Many founders have retired or were forced to leave their positions. The only original crypto rulers that are still running their exchanges and operations might be 2 only, Brian Armstrong and everyone's idol the announcer of announcements Justin Sun hehehehe.

In any case, Grayscale sent 4018 bitcoins to Coinbase according to some news articles. This might be the cause of the latest dump or this dump presently might only be the fear of the real dump.

both in criminal trouble
no surprise, with multiple cases involving DCG and its many sister companies.
before FTX got infamous DCG even had FTX listed on DCG portfolio.. so DCG invested directly with FTX
(from memory: i think it was about $250k direct equity investment of FTX in july 2021 + then offered $xxxm of loaned/collateral within FTX)

as for "daisy chain"... i guess the "contagion" is no longer trendy

It is very head scratching to witness this happen to Barry Silbert. I certainly thought he would be one of the founders that would be remaining in the cryptospace until he retires because of old age. It appears he was part of the daisy chain of lenders and borrowers that he mentioned on 2021. Also, what was he implying when he tweeted to Sam Bankman Fried that it is his turn hehehee.

https://www.wsj.com/articles/genesis-wins-dispute-with-gemini-over-ownership-of-grayscale-bitcoin-trust-shares-d035c006

so dcg/genesis lost $1.2b in january due to the genesis ftx fiasco. and now gained $1.2b in the genesis earn fiasco
but now owes an extra $2b (was 1 then $3b as reported by attourney general) in the genesis/gemini fiasco

31.2m shares at @0.00089309btc= 27,864btc now back in the control of DCG(via genesis sister), lets see how fast they dissolve  the shares and cash out the coin.. after all genesis is in bankruptcy administration so cant hoard it and continue business

(sidenote. DCG had 36m shares(declared) pre ETF launch which sold off to pay FTX now they have sister company genesis with 31.2m shares(officially declared last week))

@franky1. Bitcoin's new mayor, Larry should make an offer to Barry, DCG, Gemini and propose a rescue package to buy their 40,000 coins over the counter. Larry Fink and Blackrock would certainly have their cake and eat it too. They get more coins lower than the market price and the news of no dump would certainly bring more bullishness on the market.

doubt it would cause enough fud to make market go negative to FTX extremes, especially when news is already public and we seen btc top $50k.. we wont see a market bottom due to that  AG announcement
all its doing is basically saying DCG will have to pay back $3b instead of $1b. so we will just see grayscale get rid of another $2b of assets (40,000btc)

Thank you. Yes this will certainly cause fear, uncertainty and a big dump if this news becomes the next big storyline in the cryptospace hhehehe. Will this have an attention from the community similar to FTX?

However, I would not be shocked if mayor Larry Fink wants a big dump on the market to occur. He will be there happy for everyone to dump on his face with his mouth open.

he is talking about
https://ag.ny.gov/sites/default/files/2024-02/genesis-amended-complaint.pdf

Link or it didn't happen..


Yes. .I know you are saying "rumors," but still that is pretty vague...

What happened?  A little birdie told you?

 

the initial case was about $1b of crypto being abused and lost.. the expanding case is about another $2b of money that was supposedly involved in the scheme that was abused and lost, where investors promises were broken.

if DCG has to find another $2b to make customers whole under its court order charges which resulted in a fine only being $21m IF investors are made whole.. will cause DCG to need to sell off more assets to cover that new expanded cost it needs to cover

the specifics of the "fraud" were relating to how the promotions of the scheme were advertised.
simply that it was advertised like standard bank savings account that earned specific amount of interest and funds guaranteed/insured
where as reality was it was more of a investment/leveraging scheme where funds were not guaranteed/insured and people could lose and gain

According to some rumors, the New York State Attorney General's office will be expanding the civil lawsuit against the Digital Currency Group and there will also be a case against Gemini. This is head shaking because there are allegations that Barry Silbert, Digital Currency Group and Gemini commited fraud on their customers.

This might cause more dumps on GBTC? The skeptical me thinks Larry Fink wants cheaper bitcoins heheehhe.

last update here of mine was
25th jan: GBTC holdings: 523,516
latest update is
10th feb: GBTC holdings: 466,534

12 business days(excludes weekends) is a average outflow of 4,748.5btc
(i wasnt doing daily checks on GBTC in the last fortnight)

blackrock thursday evening
82,515.95
vs friday evening
87,779.83
shows blackrock is accelerating inflows(5,263btc).
blackrock was previously only daily buying of $100m which averaged about <2400btc

Yesterday, the ETF registered a record high inflow, while Grayscale had a record low outflows.
GBTC had an outflow of only 51.8 million, the lowest on record.
Bleeding is stopping?
I guess it is at least slowing, while the ones that really wanted to exit have already done so.

Lowest outflows today for GBTC: only 73 million left GBTC.
I am still waiting for the other data point.
Recently, a slow day in outflows has also been a slow day in inflows. Let's see if it is the case as well.

To my personal spider-sense, GBTB is almost halfway through selling: the second half of flows might be more balanced from the first investors who wanted to rush out of the GBTC investment. This kind of actor doesn't really care about the net PNL, rather than all the other characteristics such as liquidity and AP dealers involvement.

You are not really pointing out any place that is contradictory and/or confusing, except maybe you are making it confusing in your own way of clarifying and confusing at the same time (a unique franky1 talent... hahahahha).

1) I think that any business should have goals to maximize their profits, and surely if they have gotten themselves into somewhat of a financial pickle, then they could engage in a variety of tactics that involve both selling some of their own GBTC shares, but also keeping the fees up on everyone still brings in way more fees (even with a so far bleed off of 21.5% of their funds - if we use your numbers).

2) I am not clear exactly how many shares of the 138k BTC would have had been Grayscale's, and maybe it is not even close to 50k BTC that they have sold, but others are selling their own GBTC shares and so then Grayscale has to sell the underlying bitcoin when such sales happen from their various clients.

I am pretty sure that there were already estimates that GBTC would end up losing around 25% of its holdings in a fairly short period of time once the competitive products were offered, so it is almost as if we are in the ballpark of that earlier estimate, and maybe it ends up getting up to 30% to 40% of the total AUM lost, in the next 3-4 months, that is still not going to be any kind of major catastrophe for Grayscale, and they likely are still doing better by keeping their fees at 1.5% for the whole year, or maybe they will reduce them at some point later down the road, but they may well still be better off to do a more gradual reduction in their fees rather than engaging in the race to the bottom that the newbie entrants seemed to have had tried to inspire, in which Grayscale likely does not need to play that game, even though they are getting a lot of negative press in the last 2-3 weeks.

the alistair milne tweet.. doesnt make sense

he explains
'DCG has ~$2b of debt.. so needs high fees to use high fees to pay off debt'
'DCG has ~$2b of debt.. so needs to sell $2b of its locked coin to pay off debt'
all in the same tweet..

however even at a discount lets say $40k/btc
selling just 50,000btc would cover $2b
however grayscale dropped by over 100k and still dropping. (502k from over 640k = over 138k)
or in fiat terms they took $5.5b+ out of their own game

its not a high fee to use fees to pay debt. its a high fee to create a closed door to not introduce new share buckets to compete with the need for grayscale to sell its own shares and then relinquish control of those coins