11-19-2020, 06:26 PM
A dive into Grayscale
<!-- SC_OFF --><div class="md"><p>For those of us that have been around since and before Q4 of 2017, the feeling is all too familiar. It's nearing the end of the year and holidays, and bitcoin is roaring. I remember BTC hitting ATH December of 2017, and the glorious alt season that follows. About a month after the 2017 BTC ATH, ETH hit it's all time high.</p> <p>I have no doubt in my mind BTC is going to touch prior ATH and surpass it, but I'm left wondering if history is going to repeat itself when it comes to ETH. To me, this time, it's a little different. What's different this time is a lot of institutions are buying and holding bitcoin, but I also note they are doing the same to other crypto currencies.</p> <p>I like to closely follow Grayscale, one of the, if not the largest digital asset managers. They have been on a buying frenzy increasing their holdings. They then turn around and package securities together to sell on the OTC market "enabling investors to gain exposure to BTC in the form of a security while avoiding the challenges of buying, storing, and safekeeping BTC directly."</p> <p>How they work, in simpler terms, is they sell you a share in a trust of your choice. If you hold 1 share in the bitcoin trust, trading at $19.64 today at closing, you would own about 0.00095236 according to latest information. Doing simple math of Bitcoin at about $17,800 today, you're at just under $17 in value held per share. There is a slight price differential, but the share prices following the BTC market, BTC goes up, share prices go up.</p> <p>Grayscale currently offers the following trusts, with varying AUM, or assets under management. I've summarized them below sorted by AUM:</p> <p>$9.2B USD AUM - Bitcoin trust (GBTC:<a href="https://grayscale.co/bitcoin-trust/">https://grayscale.co/bitcoin-trust/</a>)</p> <p>$1.2B USD AUM - Ethereum trust (ETHE: <a href="https://grayscale.co/ethereum-trust/">https://grayscale.co/ethereum-trust/</a>)</p> <p>$76.5M AUM - Etherum Classic (ETCG: <a href="https://grayscale.co/ethereum-classic-trust/">https://grayscale.co/ethereum-classic-trust/</a>)</p> <p>$59.7M AUM - Litecon (LTCN: <a href="https://grayscale.co/litecoin-trust/">https://grayscale.co/litecoin-trust/</a>)</p> <p>$45.6M AUM - Bitcoin Cash Trust (BCHG: <a href="https://grayscale.co/bitcoin-cash-trust/">https://grayscale.co/bitcoin-cash-trust/</a>)</p> <p>$10.2M AUM - Zcash (<a href="https://grayscale.co/zcash-trust/">https://grayscale.co/zcash-trust/</a>)</p> <p>$7.6M AUM -XRP (<a href="https://grayscale.co/xrp-trust/">https://grayscale.co/xrp-trust/</a>)</p> <p>$2.4M - Horizen (<a href="https://grayscale.co/horizen-trust/">https://grayscale.co/horizen-trust/</a>)</p> <p>$1.2M - Stellar Lumens (<a href="https://grayscale.co/stellar-lumens-trust/">https://grayscale.co/stellar-lumens-trust/</a>)</p> <p>Why does it matter to you and I? AUM is indicative of the demand of amateur investors (what we call normies) and what trust they're buying. It's also important to note they hold abut 2.69% of the total cap of BTC (as of 3 days ago) and 2% of all circulating ETH (10-15-20)</p> <p>Out of all their offerings, I am a holder of both BTC and ETH, and the past month has been really exciting. BTC has had a run up from about $12k usd to $18K usd, or a 50% run whereas ETH has had a run from about $380 to $480, or 26% run, same period. I also continue to keep a close watch on the AUM by Grayscale, at least on a quarterly basis.</p> <p>What is extremely interesting about the timing for ETH is the the 2.0 launch process where it will move from POW to POS and it is set to kick off on December 1, 2020, to which a staking will be required before it proceeds. As time of writing 104,288 ETH has been staked compared to the 524,288 ETH needed, deficit of about 420,000. You can check progress here: <a href="https://launchpad.ethereum.org/">https://launchpad.ethereum.org/</a>. The staking commit deadline is 7 days before December 1, or 11-24-20, which is literally less than a week from today. With the Uniswap liquidity mining rewards that just ended November 17, it is speculated that at least some of the ETH may move into the staking. However, I have not seen much movement in the ETH 2.0 staking yet, it leads me to believe the newly freed up ETH could be on hold for the next yield farming opportunity. Also we can count Grayscale's 450,000+ ETH out of that equation, they are held in a trust. However, Grayscale is closely following ETH 2.0. In an article that was published by Cointelegraph, <a href="https://cointelegraph.com/news/eth-2-0-represents-a-material-risk-to-grayscale-s-ethereum-trust-says-sec-filing">https://cointelegraph.com/news/eth-2-0-represents-a-material-risk-to-grayscale-s-ethereum-trust-says-sec-filing</a>, Grayscale recognized the upcoming change from POW to POS asa risk by stating the following in the latest SEC filing "A digital asset network’s consensus mechanism is a material aspect of its source code, and any failure to properly implement such a change could have a material adverse effect on the value of ETH and the value of the Shares".</p> <p>All in all, the upcoming 7 days will be interesting and exciting for BTC and ETH. Will there be a rise in demand as people scramble for ETH to stake for 2.0 before the deadline, will we meet the 524,288 ETH staking needed to launch 2.0? What will BTC do, will it break prior ATH in the next 7 days? It's certainly possible given the history (IIRC it was 6 days).</p> <p>Just sharing some interesting look as a holder of both BTC and ETH, and someone who has been following Grayscale all year as they acquire massive assets in the crypto space. I am currenly contemplating how I adjust my core BTC and ETH holding accordingly. I am green on both, but I think ETH has ways to go and may rise higher (% wise) in the upcoming days, which would lead me to move some allocation from BTC to ETH.</p> <p>Disclaimer: Not offering investment advice. I'm just an enthusiast who have been a big follower of Grayscale and how they introduce crypto to the normies but would love to hear thoughts from other enthusiasts invested in both BTC and ETH and also other assets currently offered by Grayscale's trusts. What are your thoughts on their role in the cryptocurrency market, do you welcome them or do you have reservations?</p> </div><!-- SC_ON --> Kind Regards R
<!-- SC_OFF --><div class="md"><p>For those of us that have been around since and before Q4 of 2017, the feeling is all too familiar. It's nearing the end of the year and holidays, and bitcoin is roaring. I remember BTC hitting ATH December of 2017, and the glorious alt season that follows. About a month after the 2017 BTC ATH, ETH hit it's all time high.</p> <p>I have no doubt in my mind BTC is going to touch prior ATH and surpass it, but I'm left wondering if history is going to repeat itself when it comes to ETH. To me, this time, it's a little different. What's different this time is a lot of institutions are buying and holding bitcoin, but I also note they are doing the same to other crypto currencies.</p> <p>I like to closely follow Grayscale, one of the, if not the largest digital asset managers. They have been on a buying frenzy increasing their holdings. They then turn around and package securities together to sell on the OTC market "enabling investors to gain exposure to BTC in the form of a security while avoiding the challenges of buying, storing, and safekeeping BTC directly."</p> <p>How they work, in simpler terms, is they sell you a share in a trust of your choice. If you hold 1 share in the bitcoin trust, trading at $19.64 today at closing, you would own about 0.00095236 according to latest information. Doing simple math of Bitcoin at about $17,800 today, you're at just under $17 in value held per share. There is a slight price differential, but the share prices following the BTC market, BTC goes up, share prices go up.</p> <p>Grayscale currently offers the following trusts, with varying AUM, or assets under management. I've summarized them below sorted by AUM:</p> <p>$9.2B USD AUM - Bitcoin trust (GBTC:<a href="https://grayscale.co/bitcoin-trust/">https://grayscale.co/bitcoin-trust/</a>)</p> <p>$1.2B USD AUM - Ethereum trust (ETHE: <a href="https://grayscale.co/ethereum-trust/">https://grayscale.co/ethereum-trust/</a>)</p> <p>$76.5M AUM - Etherum Classic (ETCG: <a href="https://grayscale.co/ethereum-classic-trust/">https://grayscale.co/ethereum-classic-trust/</a>)</p> <p>$59.7M AUM - Litecon (LTCN: <a href="https://grayscale.co/litecoin-trust/">https://grayscale.co/litecoin-trust/</a>)</p> <p>$45.6M AUM - Bitcoin Cash Trust (BCHG: <a href="https://grayscale.co/bitcoin-cash-trust/">https://grayscale.co/bitcoin-cash-trust/</a>)</p> <p>$10.2M AUM - Zcash (<a href="https://grayscale.co/zcash-trust/">https://grayscale.co/zcash-trust/</a>)</p> <p>$7.6M AUM -XRP (<a href="https://grayscale.co/xrp-trust/">https://grayscale.co/xrp-trust/</a>)</p> <p>$2.4M - Horizen (<a href="https://grayscale.co/horizen-trust/">https://grayscale.co/horizen-trust/</a>)</p> <p>$1.2M - Stellar Lumens (<a href="https://grayscale.co/stellar-lumens-trust/">https://grayscale.co/stellar-lumens-trust/</a>)</p> <p>Why does it matter to you and I? AUM is indicative of the demand of amateur investors (what we call normies) and what trust they're buying. It's also important to note they hold abut 2.69% of the total cap of BTC (as of 3 days ago) and 2% of all circulating ETH (10-15-20)</p> <p>Out of all their offerings, I am a holder of both BTC and ETH, and the past month has been really exciting. BTC has had a run up from about $12k usd to $18K usd, or a 50% run whereas ETH has had a run from about $380 to $480, or 26% run, same period. I also continue to keep a close watch on the AUM by Grayscale, at least on a quarterly basis.</p> <p>What is extremely interesting about the timing for ETH is the the 2.0 launch process where it will move from POW to POS and it is set to kick off on December 1, 2020, to which a staking will be required before it proceeds. As time of writing 104,288 ETH has been staked compared to the 524,288 ETH needed, deficit of about 420,000. You can check progress here: <a href="https://launchpad.ethereum.org/">https://launchpad.ethereum.org/</a>. The staking commit deadline is 7 days before December 1, or 11-24-20, which is literally less than a week from today. With the Uniswap liquidity mining rewards that just ended November 17, it is speculated that at least some of the ETH may move into the staking. However, I have not seen much movement in the ETH 2.0 staking yet, it leads me to believe the newly freed up ETH could be on hold for the next yield farming opportunity. Also we can count Grayscale's 450,000+ ETH out of that equation, they are held in a trust. However, Grayscale is closely following ETH 2.0. In an article that was published by Cointelegraph, <a href="https://cointelegraph.com/news/eth-2-0-represents-a-material-risk-to-grayscale-s-ethereum-trust-says-sec-filing">https://cointelegraph.com/news/eth-2-0-represents-a-material-risk-to-grayscale-s-ethereum-trust-says-sec-filing</a>, Grayscale recognized the upcoming change from POW to POS asa risk by stating the following in the latest SEC filing "A digital asset network’s consensus mechanism is a material aspect of its source code, and any failure to properly implement such a change could have a material adverse effect on the value of ETH and the value of the Shares".</p> <p>All in all, the upcoming 7 days will be interesting and exciting for BTC and ETH. Will there be a rise in demand as people scramble for ETH to stake for 2.0 before the deadline, will we meet the 524,288 ETH staking needed to launch 2.0? What will BTC do, will it break prior ATH in the next 7 days? It's certainly possible given the history (IIRC it was 6 days).</p> <p>Just sharing some interesting look as a holder of both BTC and ETH, and someone who has been following Grayscale all year as they acquire massive assets in the crypto space. I am currenly contemplating how I adjust my core BTC and ETH holding accordingly. I am green on both, but I think ETH has ways to go and may rise higher (% wise) in the upcoming days, which would lead me to move some allocation from BTC to ETH.</p> <p>Disclaimer: Not offering investment advice. I'm just an enthusiast who have been a big follower of Grayscale and how they introduce crypto to the normies but would love to hear thoughts from other enthusiasts invested in both BTC and ETH and also other assets currently offered by Grayscale's trusts. What are your thoughts on their role in the cryptocurrency market, do you welcome them or do you have reservations?</p> </div><!-- SC_ON --> Kind Regards R