Thread by @alphaazeta

GBTC premium keeps getting crushed and currently sitting close to historical low levels.

Not going to get into details but there’s probably a massive unwind of carry trade happening.

Cont...

I’ve been a critic of services like @BlockFi for a while. Not getting too much into that. And the below is a guess on my part.

But how do you think they can pay an interest on the #btc you deposit in their custody?

coindesk.com/blockfi-takes-…

Given the article above, you can speculate that they take your Bitcoin, convert into GBTC, wait for the lockup period (6 months) and capture the premium.

More info on that trade below:

skew.com/blog/connectin….

What is the risk? Well, for starters, if all depositors ask for their bitcoin back they can’t pay you before the lock up period is over. But I’ll let you figure out if there are other risks.

But let’s just say that the premium they were waiting to capture might soon be a loss.

Is this bullish or bearish for Bitcoin price?

Who knows. Usually arbitrageurs don’t take price risk. They hedge the price with futures. So should be neutral.

But with so many shenanigans happening with hedge funds and liquidations. Who knows where the buck stops.

My advice has been consistent for years.

Buy the real thing. Stack slowly and regularly. Self custody and ignore the short term noise.

You will survive past the traders, the exchanges and others with a short term mindset.