Grayscale CEO Michael Sonnenshein Says US Has Chance To ‘Assert Its Dominance’ With Crypto Regulation

September 19, 2023 The Daily Hodl

GBTC ‘discount’ hits smallest since 2021 despite BTC price at 3-month lows

September 11, 2023 Coin Telegraph

Bitcoin

Bitcoin sits in the shade as the GBTC share price creeps ever closer to 1:1 against the BTC price.

Bitcoin (BTC) investment vehicle, the Grayscale Bitcoin Trust (BTC), now trades at just 17% below BTC price parity.

The latest data from monitoring resource CoinGlass confirms that as of Sep. 9, GBTC shares traded at 17.17% less than BTC/USD.

GBTC retraces nearly two years of losses

Bitcoin’s largest institutional investment vehicle, GBTC has seen its fortunes improve significantly since news that BlackRock, the world’s largest asset manager, said that it planned to file an application for the United States’ first Bitcoin spot price-based exchange-traded fund (ETF).

This was music to the ears of Grayscale executives, who were already in the middle of a legal battle with U.S. regulators over turning GBTC itself into a spot ETF.

The U.S. Securities and Exchange Commission (SEC) has yet to approve a single spot ETF application, recently delaying a decision on multiple projects.

Despite this, Grayscale last month won a key face-off with the SEC, securing a welcome industry boost, which further buoyed GBTC price performance.

GBTC shares’ discount to the Bitcoin price — once a surplus referred to as the “GBTC Premium,” was just 17.17% on Sep. 9, marking its best levels since December 2021.

The premium has been negative, known as a discount to net asset value (NAV), ever since. At one point it reached nearly 50%.

*GBTC premium vs. asset holdings vs. BTC/USD chart (screenshot). Source: CoinGlass*

No joy for Bitcoin bulls

GBTC has thus begun to diverge from BTC price strength, with the latter still sloping downhill as it retests levels rarely seen over the past six months.

BTC price traded at under $25,500 at the time of writing, data from Cointelegraph Markets Pro and TradingView showed, with the Wall Street open adding fuel to an already limp market.

As Cointelegraph reported, September tends to be a weak month for BTC/USD, which often loses up to 10%.

“September is historically a pretty bad month for Bitcoin, that's just the facts. October is historically very bullish,” popular trader and analyst CryptoCon told X followers in part of commentary on the day.

CryptoCon added a chart flagging late November as a key time to watch for signs of life on Bitcoin during pre-halving years.

This echoes an existing theory, which specifically gives Nov. 28 as the “bull run launch” date for Bitcoin price once every four years.

*BTC/USD annotated chart. Source: CryptoCon/X*

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Ripple Labs chair slams Biden, Gensler for having ‘screwed up’ on crypto

September 7, 2023 Coin Telegraph

Biden

Ripple Labs chair Chris Larsen commented on the recent cases involving Ripple, Grayscale, and the SEC, arguing it is time for Congress to take the lead on crypto policy.

The United States’ legal system is set to bring the crypto industry “back in the game” after the Biden administration “screwed up” its crypto policy, says Ripple Labs chair and co-founder Chris Larsen.

Speaking to Bloomberg on Sep. 7 about his firm’s July partial win against the Securities and Exchange Commission, Larsen argued the regulator lost on “everything that was important to [it] and important in the regulation of the industry.”

“The U.S. screwed up here on crypto and blockchain policy. This is the beginning now through the courts, unfortunately instead of through regulators, to get that clarity and get us back in the game.”

Larsen also commented on the latest court judgment in favor of Grayscale over its application to convert its Bitcoin (BTC) trust into a spot Bitcoin ETF, noting it “really admonished the SEC [...] in a way that you don't really see very often.”

I sincerely hope we’re seeing the beginning of the end of the SEC’s policy of regulation by enforcement. The Courts are rejecting it, and now it’s time for Congress to take the lead on crypto policy.

Thanks @EdLudlow @technology for the chat! https://t.co/3gZOR4lq5J
— Chris Larsen (@chrislarsensf) September 6, 2023

Larsen argued the ruling was proof that SEC chair Gary Gensler knows crypto laws aren’t clear and simply likes the lack of clarity so “he can go after anybody and make up the rules as he goes along through bullying.”

“That's not the American way. We should have clear rules from the legislatures, not through these unelected, power-hungry and really misplaced decision-makers that you see in Gary Gensler.”

Gensler has however previously claimed that the crypto market is full of “fraudsters” and “Ponzi schemes” and that the SEC’s securities laws would help to clean it up.

Biden ‘killed’ San Fran blockchain hub

In another part of the interview, Larsen claimed Biden’s crypto policies “pretty much killed” San Francisco from being the “blockchain capital of the world” despite Silicon Valley’s tech hub reputation.

“We owned it and we don't anymore because the Biden administration, for whatever reason, decided they wanted to push this industry offshore,” Larsen added.

“That was a missed opportunity. It's really unfortunate. Hurt the city.”

He pointed to London, Singapore and Dubai as global blockchain capitals for their “clear rules that protect consumers and also celebrate innovation.”

“Why isn't America leading that call?” Larsen asked. “That's what we've always been, and we've got to get back to it.”

Magazine: Opinion: GOP crypto maxis almost as bad as Dems’ ‘anti-crypto army’

VanEck, ARK filings ‘officially’ start clock for spot Ethereum ETFs: Analyst

September 7, 2023 Coin Telegraph

19b-4 Form

Bloomberg ETF analyst James Seyffart expects more spot Ethereum ETFs to be filed in the coming days.

The race for the United States’ first spot Ethereum exchange-traded fund has officially begun after new 19b-4 filings by the Chicago Board Options Exchange (CBOE), which will "ultimately start the clock" for an SEC decision.

On Sept. 6, the CBOE filed two 19b-4 applications to the United States securities regulator, requesting for the ARK 21Shares Ethereum ETF and VanEck Ethereum ETF investment products to be listed on CBOE’s BZX Exchange.

In a series of tweets, Bloomberg ETF analyst James Seyffart noted that as opposed to the previously submitted S-1 filings, the 19b-4 filings mean that the countdown for a decision by the SEC is now in motion.

“The Spot #Ethereum ETF Race is officially on,” Seyffart declared, estimating a final deadline around May 23, 2024.

The Spot #Ethereum ETF Race is officially on. It's early but i'd estimate a final deadline on these applications to be around ~May 23, 2024.

Notably, we didn't see a VanEck spot Ethereum ETF S-1 from VanEck earlier because they filed for this thing all the way back in 2021!! pic.twitter.com/jLve8PpPrE
— James Seyffart (@JSeyff) September 6, 2023

A 19b-4 form is filed by self-regulatory organizations — such as a stock exchange — to request a rule change to the U.S. Securities and Exchange Commission, while an S-1 filing only indicates a firm’s intention to list a particular investment product on a national exchange.

The securities regulator is now obligated to review the 19b-4 filings and make a decision, though the SEC can also delay the decision as it has for spot Bitcoin ETFs.

ARK Invest and 21Shares teamed up to file an S-1 to the SEC on Sept. 6, though VanEck’s S-1 filing dates back to July 2021.

Late to the party? We filed our S-1 for a Spot Ether ETF back on 5/7/2021. https://t.co/hYE6TG90Q3
— VanEck (@vaneck_us) September 6, 2023

Meanwhile, Seyffart expects more spot Ethereum ETF filings to come in the coming days.

How long before we see a 19b-4 from @Grayscale to convert $ETHE into an ETF? https://t.co/078sm9FNlF pic.twitter.com/pzSEcMrtZB
— James Seyffart (@JSeyff) September 6, 2023

On Aug. 17, the securities regulator reportedly signaling its intention to approve Ethereum Futures investment products while several firms including Grayscale Investments and BlackRock are currently fighting to get a spot Bitcoin ETF approved.

Magazine: How to protect your crypto in a volatile market — Bitcoin OGs and experts weigh in

Grayscale Bitcoin Trust’s alleged wallet addresses released by Arkham

September 6, 2023 Coin Telegraph

Arkham

The blockchain analytics firm claims Grayscale is the world's second-largest BTC entity.

Blockchain analytics platform Arkham Intelligence claims to have identified the addresses of the Grayscale Bitcoin Trust. The trust consists of more than 1,750 addresses holding a total of over $16 billion worth of Bitcoin (BTC), according to a Sept. 6 thread on X (formerly Twitter). Arkham claimed that Grayscale is “the 2nd largest BTC entity globally.”

Breaking: Arkham has identified the Grayscale Bitcoin Trust’s holdings on chain.

It is the 2nd largest BTC entity globally, holding >$16B of BTC.

Though Grayscale publicly reports balances, they have refused to identify the on-chain addresses of the trust. https://t.co/uEN4kNldpm pic.twitter.com/p9GfrthoKR
— Arkham (@ArkhamIntel) September 6, 2023

The Grayscale Bitcoin Trust holds over $16 billion in BTC. Its issuer, Grayscale, is currently battling with the U.S. Securities and Exchange Commission (SEC) as it attempts to transform the trust into an exchange-traded fund (ETF).

Members of the Bitcoin community have long speculated about where Grayscale keeps its huge stockpile of BTC. Grayscale has so far refused to provide the addresses of its wallets, citing “security concerns.” Some Twitter users have criticized Grayscale for not releasing the addresses, accusing them of carrying less Bitcoin than they claim.

A search for “Grayscale Bitcoin Trust” within Arkham on Sept. 9 revealed the following five addresses:

16vd2YfcGK9mw3GZXzL5o23m7gdBGXKHNz
1GRGfd3TtBA2vMjoHH3hVpE6CRx5nZ1YJp
15gioFeKnUjerTQ9LYNreW3Bt9kn9xrTU4
1DtdMtJL2zggkoFPDbEbM2Ja1EYH8LeH9B
1CU9gusmCCfCjsmGatxbzvXLqoisgnaV9n

The first three addresses hold roughly $51 million worth of Bitcoin in total, according to Arkham. The last two hold no funds but do show transactions coming from other Grayscale Bitcoin Trust addresses, including 1L8k2SD9sdTTzdDxA19QdobLbUyKyV2RVi and 1CS1M4oVbcFnZjZ5hU5bk6vLi2Q5VSsmpX. Arkham does not provide a full list of addresses for the Grayscale entity, but it does label each Grayscale address clearly as part of the transaction history of each wallet.

Grayscale’s entity page on Arkham shows it is carrying 627,779,000 BTC valued at over $16 billion.

*Grayscale Bitcoin holdings. Source: Arkham.*

This is similar to the amount claimed on Grayscale’s website, implying that it does have enough Bitcoin to satisfy withdrawals.

Arkham has often come under criticism for revealing private information about blockchain users, as some Twitter users have labeled it a “snitch-to-earn” platform. However, the platform’s CEO has argued the company is only trying to even the playing field between big institutions and smaller players who would otherwise lack information.

Grayscale asks SEC to meet on ‘way forward’ for Bitcoin ETF conversion

September 6, 2023 Coin Telegraph

Bitcoin

“We believe the Trust’s nearly one million investors deserve this fair playing field as quickly as possible,” Grayscale's lawyers wrote to the regulator.

Grayscale has told the Securities and Exchange Commission it has no legal reasoning left to block the conversion of the asset manager’s flagship Bitcoin (BTC) fund to a spot exchange-traded fund (ETF).

On Sept. 5, Grayscale’s lawyers sent a letter to the SEC requesting the pair meet to discuss the next steps following the regulator’s court loss regarding the conversion of the Grayscale Bitcoin Trust (GBTC).

“Now that the Court of Appeals has spoken, there is no available rationale that would distinguish a Bitcoin futures ETP from a spot Bitcoin ETP under the legal analysis previously adopted by the Commission in rejecting spot Bitcoin ETPs.”

Grayscale added it believes the SEC should conclude there are "no grounds" for treating the GBTC differently from Bitcoin futures ETFs whose filings "the Commission has previously approved."

On Aug. 29, a United States Appeals Court ruled against the SEC’s denial of Grayscale’s application to convert its GBTC to a spot Bitcoin ETF.

*Screenshot of the letter sent to the SEC by Grayscale’s retained law firm Davis Polk. Source: Grayscale*

Grayscale said if there was any other reason for rejecting the conversion besides the Exchange Act’s requirement that rules be “designed to prevent fraudulent and manipulative acts and practices,” it would have already been made apparent.

“We are confident that it would have surfaced by now in one of the fifteen Commission orders that rejected spot Bitcoin filings even after Bitcoin futures ETPs began trading,” Grayscale wrote.

Grayscale added its fund conversion application has been pending for nearly three times longer than the length of time stipulated by the SEC’s rules.

Joseph A. Hall — who also penned Grayscale’s letter in July urging the SEC to approve all pending ETF applications together — concluded his latest letter by saying:

“We believe the Trust’s nearly one million investors deserve this fair playing field as quickly as possible.”

Since the Aug. 29 court ruling the GBTC discount — the percentage showing how far off an ETF is trading above or below its net asset value — has fallen to 19.9%.

GBTC’s discount was nearing negative 50% during the bear cycle bottom following the FTX collapse in December 2022.

Magazine: How to protect your crypto in a volatile market — Bitcoin OGs and experts weigh in

Grayscale