Bitcoin Investment Trust (GBTC)

Grayscale met privately with the Securities and Exchange Commission last week in an effort to persuade the regulator to approve the conversion of its flagship fund into an ETF. Turning the Grayscale Bitcoin Trust into a NYSE-traded ETF would broaden access to bitcoin and enhance protections while unlocking up to $8 billion in value for investors, according to a 24-page presentation. The deadline for the SEC to approve or reject Grayscale’s application is July 6. Grayscale contended that a spot bitcoin ETF is “no riskier” than futures-based ETFs, because the two markets are both affected by the underlying price of bitcoin and track each other closely.

The firm also took pains to outline its increasing disclosures tied to GBTC and its network of partners, including BNY Mellon and Coinbase, who are ready to help its conversion process.

If this is the lead up to a major crash then this sector seems as ripe for severe price discovery as any other.

Then see how many stablecoins continue to exist, and that loss of trust has already shown how easily it can take down the rest of the sector.

The systemic and counterparty risk which has built up in these digital tokens is substantial. Reminds me of how the dot-bombs and housing proved to be tied into everything, so the contagion was not contained, no matter what assurances were given along the way.

Really not trying to spread doom or FUD, and see it as a potential for extreme entry points, and certainly trading this recent low, already taking profits.

I mention all this because the entire market appears on the edge of something epic. This sector just happens to carry more risk than others, as it has no central bank trying to keep it liquid and is still barely regulated.

Even if the market avoids extreme price dislocation, in the 2018 reset, the digital assets lost about 50% once they broke below support.

The Nasdaq has been destroyed. People who simply look at the VIX are NOT seeing the capitulation, IMHO. However, this is part of the problem because buyers who want to buy are still timid, and maybe for good reason. The indicators of capitulation are there, and shorts could easily get caught flat-footed if they haven't started covering. But buyers want clear capitulation, and the atmosphere really hasn't changed to give them confidence either. War (that could escalate to weapons of mass destruction), inflation (that could get worse due to energy prices, wheat shortages, and supply constraints), rate increases by the FED (that could hurt future profits) are ALL STILL THERE. If we get a slow decline over the next several months, recession becomes in the cards. The market is ugly right now. Greed and fear drive most everyone's decisions, so at some point a relief rally is going to shake up things in the near term. Prices look extremely attractive from where they once were, though there are a number of companies that deserve the huge decline as the pandemic hysteria fades.

Bitcoin is back in Breakdown.....
Exit Number is $29, 533.22.

No Copy and Paste!

Instead of selling Bitcoin to raise money, firms like Marathon Digital Holdings Inc. are selling Bitcoin call options to wring money out of their holdings, turning to a yield-generating strategy deployed throughout conventional finance.“Bitcoin miners are some of the most voracious yield seekers in the market today,” said Joshua Lim, Genesis Global Trading, which offers options overwriting strategies. “When Bitcoin is in a range-bound market, this type of yield-generating strategy will outperform a mine-and-hold or mine-and-liquidate strategy,” Lim said. “However, in an upward trending market, miners will give up any upside performance beyond the strike of the calls they are selling.”