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GBTC vs DeFi circa Feb 15, 2021

Discussion in 'The Kruse Longevity Center' started by Jack Kruse, Feb 15, 2021.

  1. Jack Kruse

    Jack Kruse Administrator

    DeFi is exploding. It will have growing pains but protocols that continue to capture cash and remain sticky for that cash will reap rewards in coin prices. This represents more money that most money centers banks move.

    [​IMG]

    Just how much money is Uniswap really moving?

    Grayscale has 30 Billion AUM and everyone thinks they are doing great. Uniswap is three times that volume in way less time. That tells you about the power in the DeFi monetary network. Remember Grayscale is fiat-based and centralized.


    Why the FED MOVES OF 2021 are killers for fiat?

    Billionaires can escape taxes, but they can't escape inflation. That's why Mr. Saylor and Elon Musk needed Bitcoin in their treasury.
    I believe everyone needs it because of the 20% depreciation that is happening to our money now.
    Here is a great take on the dangers of using history as our guide:
    Hindsight, the ability to explain the past, gives us the illusion that the world is understandable. It gives us the illusion that the world makes sense, even when it doesn’t make sense. That’s a big deal in producing mistakes in many fields.
    Here’s a useful analogy: Essentially the Fed is driving the car, which is the economy, only using the rearview mirror which is foggy, and the front windshield is opaque (you can’t see the future). How could the Fed possibly drive the car with any accuracy? What if we just let the car self adjust to the conditions of the road?
    History cannot be interpreted without the aid of imagination and intuition. The sheer quantity of evidence of how money-printing/debasement hurt the taxpayer is so overwhelming that selection is inevitable.
    This will drive the decentralization movement in all areas of our society soon. Decentralized medicine is my specialty. Money printing causes medical problems because health and wealth are linked. When we get to Biden and Harris's real plan of UBI, you will need BTC in a big way. Here is another warning for my non-member friends. It is time for many of you to join my tribe to stay out in front of the coming tsunami. https://www.coindesk.com/grayscale-bitcoin-trust-explained
     
  2. Jack Kruse

    Jack Kruse Administrator

    Osprey Bitcoin Trust (OBTC), a challenger to Grayscale Bitcoin Trust (GBTC), has begun trading on the over-the-counter (OTC) market. OBTC boasts a lower 0.49% management fee compared to GBTC's 2% annual fee, but the product levies additional charges, including custody and legal fees.

    https://finance.yahoo.com/quote/OBTC/
     
    John Schumacher and JanSz like this.
  3. Jack Kruse

    Jack Kruse Administrator

  4. Jack Kruse

    Jack Kruse Administrator

    Some of the ETH 2.0 smart contracts operating at a significant scale, automating away parts of traditional finance such as automated market makers. Aave is one. Are there risks? Yes. The stable coin they use in these operations is UST. UST is under attack from the SEC now. DeFi and ETHER are linked to what happens with Tether. If Tether goes down, DeFi collapses, and ETHER will be a Hindenberg. DeFI has 10 B of UST locked as collateral right now in 2/2021
     
  5. JanSz

    JanSz Gold

    If Tether goes down, DeFi collapses, and ETHER will be a Hindenberg.
    -----------------------------------------------------------------------------------------
    How would that affect BTC?

    ....
     
  6. Jack Kruse

    Jack Kruse Administrator

    UST only is tied to 25B of BTC foundation. BTC is now close to a Trillion dollars......so UST is a non issue for BTC. For ETH it is a big deal.
     
  7. Do we have an idea when BlockFi Trust fund may come available on the exchange - days, months, ... ?

    https://www.nasdaq.com/articles/blockfis-bitcoin-trust-takes-aim-at-gbtc-2021-02-09
     
  8. Jack Kruse

    Jack Kruse Administrator

  9. caroline

    caroline Moderator

    Zac Prince is really easy to listen to, and makes it all very clear.
     
  10. JanSz

    JanSz Gold

    How often are you losing car keys or misplacing them in a way that you can't get them for few days?

    ....
     
    John Schumacher likes this.
  11. caroline

    caroline Moderator

    Tony does this all the time....not for a few days tho - just can't find his keys when he needs them. I have helped him to be more focused on one thing at a time so he has a place where his keys go and then I holler at him if they aren't there when he needs them!
    Then there was the time we both forgot where we actually put the car keys and we had to get a new set - $250.00. Good lessons aren't cheap!
     
    Alex97232 likes this.
  12. Jack Kruse

    Jack Kruse Administrator

    Now n June of 2022:The goals of DeFi are noble, but the failure of cryptos like Terra has shaken the confidence of the entire industry and is causing many to consider whether we might best achieve true decentralization via LiFi ("Lightning Finance") on the #Bitcoin[​IMG] network.
     
  13. Jack Kruse

    Jack Kruse Administrator

    Shitcoins recreate the legacy of fiat fraud for a digital age. So whoever pushes you a shitcoin realizes what their mindset is.
     
    GavinH likes this.
  14. Jack Kruse

    Jack Kruse Administrator

    SEC REJECTS GRAYSCALE’S SPOT BITCOIN ETF APPLICATION -COINDESK
     
  15. JanSz

    JanSz Gold

    Are you still of opinion that holding GBTC is ok?

    ...
     
  16. Jack Kruse

    Jack Kruse Administrator

    Yes. I think the SEC is GBTC's real problem.
     
    JanSz likes this.
  17. ND Hauf

    ND Hauf Pleb

    SEC = Stop Economic Creativity
     
    caroline likes this.
  18. Jack Kruse

    Jack Kruse Administrator

  19. Jack Kruse

    Jack Kruse Administrator

    There’s a bureaucratic civil war ongoing within the US Government to regulate Bitcoin. In the broadly pro-Bitcoin camp sits the Commodity Futures Trading Commission (CFTC), which takes a favorable stance toward convertible digital currencies. In the trenches on the other side, the Securities and Exchange Commission (SEC) is assembled and making the battle increasingly difficult for the maxis. Gary Gensler has been steadfast in opposition to certain policy decisions that Bitcoin enthusiasts have been pushing for. In 2014, the CFTC determined Bitcoin to be a commodity under the Commodity Exchange Act and has since brought a mix of enforcement actions against clearly fraudulent behavior while also working to develop a legal framework to allow for trading in Bitcoin futures.
    Because of the CFTC’s support and desire to provide regulatory clarity, there exists in the US today a vibrant futures market in Bitcoin. There are even several Bitcoin futures ETFs that trade on the stock market, including the popular ProShares Bitcoin Strategy ETF.
    Since its launch last fall, BITO has traded with a 95%+ correlation to the spot price of Bitcoin, giving retail investors the opportunity to speculate in the digital commodity using their brokerage accounts, as they would any other stock.
    Missing from the suite of US investor options is a direct Bitcoin spot market ETF and getting one approved has been a high-priority goal of the Bitcoin community for years. Given the existence of BITO, why is this an urgent issue for them and why doesn’t one already exist?

    Your government is at war with you and your money. That is why they are gunning for BTC now. BTC represents the anti-

    For answers, we must first understand the critical difference between Bitcoin futures and spot ETFs. Once that becomes clear, the mystery over why spot ETFs are urgently needed – and why Gensler keeps opposing them – becomes apparent.
    While Bitcoin futures contracts reference the price of Bitcoin and can be used to speculate on the commodity, they are settled in cash. The price of Bitcoin is just a benchmark used to facilitate trading between speculators. These futures sit outside the crypto universe.

    When an investor takes a position in a futures contract, they deposit US dollars in their account as margin. So too does the investor on the other side of the trade. As the price of Bitcoin fluctuates, one side wins and the other loses, but everything is settled in dollars.

    At no time do US dollars leave the real economy as a direct consequence of this trade. The winning side collects more US dollars, and the losing side ends up with less, but the direct flow of fiat never enters the crypto universe.
    To be sure, investors making bets in the futures markets may also take offsetting bets directly in the crypto universe, but the futures trades themselves – in isolation – begin and end in totally regulated accounts, complete with thorough KYC/AML protections.
    Now consider the flow of fiat for Bitcoin spot ETFs. These proposed products are designed to buy and hold Bitcoin directly, injecting much-needed US dollars (cough, exit liquidity) into the crypto universe. Inflows to a spot ETF would move US dollars directly into Bitcoin.
    And therein lies the critical difference between the two products, and why, in our estimation, Gensler is blocking these applications. Gary Gensler can be accused of many things but being ignorant of how crypto markets work is not one of them.

    When Gensler rejects these spot ETF applications, he always states that the application “does not sufficiently contest the presence of possible sources of fraud and manipulation in the bitcoin spot market generally that the Commission has raised in previous orders.”

    He also specifically points to “manipulative activity involving the purported ‘stablecoin’ Tether (USDT).” This is remarkably clear language. As long as Gensler is chair of the SEC and Tether is still a thing, there will be no spot Bitcoin ETF, as Grayscale learned this week. The government is going after stablecoins and I believe the reason is they want UST to be the collateral to all stablecoins because it creates a chronic need for US debt. That is how the government plans to keep fiat alive and slow the adoption of Bitcoin globally. They want to protect the hegemony at all costs.

    The Grayscale Bitcoin Trust is a private, open-ended trust that trades on OTC markets under the ticker GBTC. Because shares are created via private placement and there is no redemption mechanism, GBTC can trade far outside of its net asset value.
    At first, GBTC traded at a significant premium to the value of its Bitcoin holdings. Now, it trades at a remarkable 34% discount. One way to solve this problem is to convert GBTC to a spot ETF, which would allow arbitrageurs to work their magic.

    Grayscale applied with the SEC to convert GBTC to spot ETF. They went on a public relations campaign and encouraged Bitcoin enthusiasts to flood the SEC with supportive comments. None of it worked. On Wednesday, Gensler rejected their application.
    Grayscale immediately sued the SEC. It filed a petition challenging Gensler’s decision with the US Court of Appeals, accusing the SEC of acting “arbitrarily and capriciously.” This will take years to adjudicate, and almost certainly harden Gensler’s stance further against conversion until the government gives up its fight against Bitcoin.

    Until the stablecoin issues are dealt with, Bitcoin exchanges around the world firm up KYC/AML, and the crypto universe submits to a regulatory authority, Gensler will never approve a spot Bitcoin ETF. The next two years Gensler will force many hands. He won't be in government past 2024.
     
    GavinH, JanSz and caroline like this.
  20. JanSz

    JanSz Gold

    Does or how all above affects price of Bitcoin?

    ..

    ........
     

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