• Markets
  • Crypto
  • Web3
  • Culture
  • Opinion
  • Politics
Subscribe
  • Login
  • Register
No Result
View All Result
  • Markets
  • Crypto
  • Web3
  • Culture
  • Opinion
  • Politics
No Result
View All Result
No Result
View All Result

Grayscale’s Ethereum Price Falls Below $700, Bitcoin to $9,000

19/11/2022 13:48
No comments
GBTC price, Nov 2022

GBTC price, Nov 2022

2017 is in full swing at Grayscale where one bitcoin is just about over $9,000, a price level first reached to a wide applause of memes about five years ago.

Ethereum is not faring much better, with it going for $660 at Grayscale’s Ethereum Trust (ETHE), a price 45% below the global market rate of $1,200.

That makes this the worst year ever for the Grayscale trusts since they first launched in 2013, and sentiment has gotten worse still after Genesis paused withdrawals.

ETHE price, Nov 2022
ETHE price, Nov 2022

They’re a Digital Currency Group (DCG) subsidiary, as is Grayscale. Genesis had a $170 million exposure to FTX, but considering the vast holdings of DCG, you’d think they’re small potatoes.

Barry Silbert, its CEO, could himself perhaps cover that $170 million as he is worth $2 billion, but the fact they haven’t been able to do so far may well indicate DCG is running a tighter ship than it might appear.

Growth in their products has stalled and even contracted with the bear beginning to bite while sharks go hopping from project to project to see what might fall.

“Due to security concerns, we do not make such on-chain wallet information and confirmation information publicly available through a cryptographic Proof-of-Reserve, or other advanced cryptographic accounting procedure,” Grayscale said.

That courted some ridicule because public key cryptography means you can safely share your public key, except this isn’t Grayscale’s policy but Coinbase’s, their custodian.

Coinbase has always refused to publish their public addresses. Unlike many other exchanges that have one or a few big cold wallets, Coinbase chops up theirs in tons of addresses with balances of 5,000 to 10,000 BTC.

A few years ago it might have been difficult to find them, but nowadays we’d be surprised if some on-chain analysts did not have them neatly mapped out in all their fine glory.

If the public really wanted such Proof of Reserves, therefore, they can go draw nice charts of all addresses with balances of exactly 5,000 or 10,000 and label them as Coinbase.

There’s about at least 100 of them, certainly 50, with it unclear this ‘security concern’ really still holds, but this has always been Coinbase’s policy of security through obscurity.

No one is seriously speculating that GBTC does not have the 633,000 bitcoins however, although proof for such things is better than ‘trust us,’ with the speculation being more on whether they’ll have to dissolve the trust.

A trust as you might know is a vehicle from the Chancellery court where the owner in possession has obligations towards the legal owner. Grayscale in this case has obligations towards the GBTC shareholders who are the actual owners of the coins even though Grayscale possesses them.

Grayscale therefore has to act in their best interest, with the question being whether dissolving the trust would be in their best interest especially when there’s the alternative of suing SEC, as Grayscale has, to grant the ETF conversion for the trust.

Arguably that ETF conversion is better for these shareholders, and since Grayscale receives a 2% annual management fee, they probably won’t dissolve effectively their business unless they absolutely have to.

Compartmentalizing Genesis Capital however has turned out to be a lot more difficult than they might have initially thought.

DCG tried to paint Genesis Capital as a completely different, isolated thing out there which has nothing to do with these other things, yet in the market the pause of withdrawals at Genesis is reflecting on DCG, on Grayscale and on all their other products because they are the owners or share the same owners.

In addition it is quite unclear why they have allowed this discount to develop to such an extreme level.

It isn’t entirely new as the premium was extreme too and Grayscale tried to do something about it by buying some $750 million worth of GBTC last year, but the discount has only gotten worse since.

The company is therefore in some difficulties as its lending unit suspends normal operations, with it to be seen whether sharks will hop from here, or circle.

Related Posts

Crypto art

Can Ethereum’s Variable Tokenomics Address Inflation?

MicroStrategy HQ

MicroStrategy Increased Bitcoin Holdings

BlackRock ETF Tokenized on Uniswap

Nationwide Restricts Payments to Binance

Load More
  • Trending
  • Comments
  • Latest
Backed Finance tokenizing stocks, Feb 2023

BlackRock ETF Tokenized on Uniswap

HSBC's HQ at Canary Wharf in London

HSBC Looks to Expand to Crypto

Fed's balance sheet, Jan 2023

Fed Burns Half a Trillion

Investors cash levels reach all time high, Jan 2023

Investors Are Sitting on $5 Trillion

Crypto art

Can Ethereum’s Variable Tokenomics Address Inflation?

MicroStrategy HQ

MicroStrategy Increased Bitcoin Holdings

Backed Finance tokenizing stocks, Feb 2023

BlackRock ETF Tokenized on Uniswap

A Nationwide bank branch

Nationwide Restricts Payments to Binance

Comments

Latest News

  • Can Ethereum’s Variable Tokenomics Address Inflation?
  • MicroStrategy Increased Bitcoin Holdings
  • BlackRock ETF Tokenized on Uniswap

About Trustnodes

Terms of Service

Privacy Policy

Our Ethics and Values

Trustnodes Newsletter

(You have to be a paid subscriber)

Trustnodes © 2017-2023. All Rights Fully Reserved. For any Enquiries contact@trustnodes.com RSS Feed

No Result
View All Result
  • Login
  • Sign Up
  • Cart
  • Markets
  • Crypto
  • Web3
  • Culture
  • Opinion
  • Politics

Trustnodes © 2017-2023. All Rights Fully Reserved. For any Enquiries contact@trustnodes.com RSS Feed

Welcome Back!

Login to your account below

Authenticate with MetaMask Loading...

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

*By registering into our website, you agree to the Terms & Conditions and Privacy Policy.
All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?