1/ No, DCG and Genesis can't "dump" GBTC. That's part of their liquidity crisis, but also net good news for GBTC shareholders and FUD fighting.
Why?
In public markets there are rules! ๐
2/ DCG bought nearly $800mm worth of GBTC shares since the premium flipped to a discount in early 2021.
DCG's board authorized up to $1.2bn of share purchases across Grayscale Trusts.
In light of the current liquidity issues, the remainder is likely on hold indefinitely.
3/ This is especially true since DCG/Genesis took possession of *35 million shares* or 5% of the GBTC trust as part of 3AC's liquidated collateral in Q2.
DCG and affiliates now own 10% of the trust shares, but these are highly illiquid.
4/ Why?
Grayscale is not a true "ETF" it's a publicly listed vehicle under something called Rule 144.
Two major affiliate selling restrictions under 144:
+ Notice of Proposed Sales (would spook the market)
+ Cap on sales of 1% of outstanding shares or weekly trading volume.
5/ Given GBTC has a daily volume of ~4.5mm shares that works out to quarterly cap on sales of 2.5mm shares ($23mm / quarter) under the trading test and 6.9mm shares ($62mm / quarter) under the asset test.
The 1% rule is the "greater of the two", BUT...
6/ Since max allowable sales under the 1% test would be 3% of daily volume dumped on the offer side of the book, forced selling by DCG-Genesis would further depress prices AND telegraph sales to the market.
It's *much* more likely DCG-Genesis refinance using GBTC as collateral.
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1/ The reason the election of Kamala Harris would legitimately be the end of the country has nothing to do with her as a person. (If I'm being honest, I would definitely have seven IPAs to her seven glasses of wine, and we'd probably hit it off.)
It's much darker than that.
2/ You have to look at the coordinated information war that has taken place in the past six weeks: the players, the sequence of events, and the outcomes.
If I were part of the "Deep State" or whoever the hell is running the country right now, I would be flexing my muscles...
3/ First, you had a sustained campaign of lawfare against Trump, which culminated in two massive civil suit losses (in Deep Blue NYC), and a sham felony conviction for fraud.
At the same time, the White House, Congress, Media, and others were covering up Biden's dementia.
1/ The FIT21 vote this week will be a big one in DC:
+ We'll see if crypto remains a partisan football
+ It's a legacy defining moment for @RepMaxineWaters
+ Waters vote will likely make or break @hakeemjeffries chance at Speaker of the House for the next Congress.
Why?
๐งต
2/ There's three things you should know about the political dynamics of this vote. I'll unpack them all.
1. SBF embarrassed the Democrats and Waters 2. As Waters goes, so goes the Dem conference 3. Liz Warren's SAB 121 rebuke opens the door for a potential landslide FIT21 win.
3/ First, the SBF picture.
Yes, THAT one.
The truth is that Waters and McHenry have had a cordial relationship, and worked productively together for many years. Their approach to crypto has legitimately been a good faith, bipartisan effort.
3/ For the sake of brevity, I'll skip what you may already know about the origins of money thanks to crypto ("there's this island called Yap"), and anything that you could read about early accounting in that wiki.
I'll skip to the "merchants of Venice" who birthed capitalism.
A close friend of mine (who is liberal) asked me today: โI understand the support for Vivek, but how can you swing over to Trump overnight?โ
I compared Trump to an entrepreneur and comedian, but not in the way that you are thinking.
๐๐ผ
For starters, Trump was right about a LOT of issues. Immigration, NATO, tax reform, China. Just askโฆJamie Dimon:
But the big issue that always comes up is โbut Trump is a jerk / dictator / insurrectionist. Democracy is at stake.โ
If you think J6 was a literal insurrection, the conversation usually stops there. The guy with the horn helmet and face paint did not almost halt democracy.