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  • 2024 a significant year with Bitcoin’s 4th halving; promising outlook for Chainlink & Rebel Satoshi (RBLZ)

    2024 a significant year with Bitcoin’s 4th halving; promising outlook for Chainlink & Rebel Satoshi (RBLZ)

    As the crypto world eagerly anticipates the year 2024, it holds a promise marked by a significant event – Bitcoin’s fourth halving. This phenomenon, coupled with optimistic forecasts for cryptocurrencies like Chainlink and Rebel Satoshi ($RBLZ), is poised to shape the landscape of the digital asset realm. 

    In this article, we delve into the potential implications of Bitcoin’s impending halving and explore the promising outlook for two noteworthy top altcoins.

    Bitcoin’s fourth halving: a defining moment

    Bitcoin, the pioneer of cryptocurrencies, operates on a unique economic model with a fixed supply capped at 21 million coins. The halving event, which occurs approximately every four years, involves a 50% reduction in the reward that miners receive for validating transactions. 

    With more than 19 million bitcoins already mined, the fourth halving will further tighten the supply, bringing the total number of bitcoins ever to be mined closer to its 21 million limit.

    The halving effect on Bitcoin price

    Historically, Bitcoin halving events have triggered significant price movements. While the first halving in 2012 had a negligible effect, subsequent occurrences in 2016 and 2020 witnessed substantial price surges. 

    As we approach the expected 2024 halving, the crypto community remains vigilant for potential market dynamics. Analysts often observe increased price volatility before and after halving events, presenting both challenges and opportunities for traders and investors.

    Chainlink’s promising trajectory

    Amidst the anticipation surrounding Bitcoin, top altcoins like Chainlink have been gaining attention for their unique value propositions. Chainlink, a decentralized oracle network, has established itself as a crucial player in bridging smart contracts with real-world data. The project’s versatile use cases, including decentralized finance (DeFi) applications, have contributed to its widespread adoption.

    As of recent market analysis, Chainlink’s price appears to be in an accumulation phase, indicating a potential upcoming bullish trend. Technical indicators such as the Awesome Oscillator, Moving Average Convergence Divergence (MACD), and Relative Strength Index (RSI) suggest a favourable environment for Chainlink’s price to experience an upward trajectory. 

    With key support levels and resistance zones in focus, traders are eyeing the $16.000 mark as a potential milestone for LINK.

    Rebel Satoshi (RBLZ): a new player in the crypto arena

    In the diverse landscape of cryptocurrencies, Rebel Satoshi (RBLZ) emerges as a notable contender, especially as it garners attention during its presale phase. Having already sold over 100 million RBLZ tokens and raised $1.5 million, the Rebel Satoshi presale is on the brink of reaching the $2 million milestone. Built on the Ethereum network, renowned for its security, Rebel Satoshi stands out as a compelling investment option.

    The smart contracts governing Rebel Satoshi have undergone rigorous auditing by Source Hat, a leading auditing firm. This ensures the safety and reliability of the Rebel Satoshi ecosystem. This is one of the reasons why Rebel Satoshi is regarded as the best meme coin. As the presale progresses, investors are urged to consider the potential of Rebel Satoshi, not just as a meme coin but as a project backed by robust technology and a dedicated community.

    Investment recommendation

    In light of the upcoming Bitcoin halving and the promising trajectories of altcoins like Chainlink and Rebel Satoshi, investors are presented with unique opportunities. While Bitcoin’s halving may contribute to market-wide dynamics, strategic investments in altcoins with solid fundamentals can potentially yield significant returns.

    As we look ahead to 2024, the crypto space continues to evolve, offering a dynamic environment for enthusiasts and investors alike. Whether one chooses to ride the waves of Bitcoin’s halving or explore the potential of innovative altcoins, staying informed and vigilant in the ever-changing crypto landscape remains paramount.

    Final Thoughts

    The year 2024 unfolds with the promise of being a transformative period in the crypto realm. Bitcoin’s fourth halving stands as a key event, influencing market sentiments and potential price movements. In parallel, top altcoins like Chainlink and Rebel Satoshi showcase their unique value propositions, inviting investors to explore diverse opportunities. 

    As the crypto journey progresses, strategic decision-making and a forward-looking approach become essential for those seeking to navigate the exciting and ever-evolving world of digital assets.

    For the latest updates and more information, visit the official Rebel Satoshi Presale Website or contact Rebel Red via Telegram.

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  • 2024 may be a year of memecoins as this presale cruises past $2M

    2024 may be a year of memecoins as this presale cruises past $2M

    • Inflows to crypto funds are up big, 
    • Crypto-adjacent stocks outperform all their TradFi counterparts as the Bitcoin ($BTC) Spot ETF is just days away. 
    • Strap in because a bull market like no other could be on the way.

    The top 5 cryptos to buy now are all memecoins, and the recent strength of Ethereum (ETH) signals the start of stage two of the bull market. 

    Crypto cycles always follow a pattern: BTC pumps, ETH pumps, altcoins pump, and then memecoins run riot. 2024 is set to be the year of memecoins, and Galaxy Fox ($GFOX) has caught everybody’s attention. This presale cruises past $2 million and shows no sign of stopping!

    What Is Galaxy Fox ($GFOX)?

    Galaxy Fox is a hybrid protocol pushing the boundaries of what is possible within DeFi. It blends the best of the play-to-earn and memecoin genres to deliver an easy 100X investment opportunity. At the heart of this galactic ecosystem is an addictive runner game.

    This P2E module pays out rewards to the top 20% of the leaderboard at the end of each season. These prizes are directly exchangeable for $GFOX tokens. NFT holders gain in-game stat bonuses or can purchase upgrades with $GFOX tokens. Half of all $GFOX spent on in-game upgrades gets rolled into the next prize pool. This global competition is Galaxy Fox’s primary interest funnel, and through its clever financial mechanism, it encourages more users to join the ecosystem.

    Galaxy Fox’s memecoin components are its classic viral aesthetic and branding, token burn, and explosive volatility. The token burn ensures $GFOX is deflationary, and the cosmic-themed characters even feature on real-world merchandise, which funds the protocol Treasury. The Treasury then uses this and taxation revenue to support community initiatives and marketing efforts, further driving ecosystem development.

    This focus on ecosystem expansion led analysts to categorize $GFOX among the top crypto to buy in 2023. Benefitting from both the development of the GameFi narrative and the increased memecoin fever sets the stage for a dramatic rally in Q1 of 2024. $GFOX is a hidden gem, and analysts are calling it one of the top 5 cryptos to buy now. They believe it could be one of 2024’s best performers.

    GFOX’s passive income

    Galaxy Fox introduces Stargate- the ecosystem’s rewards hub. Smart contracts channel 2% of all buy and sell taxes to this module, which in turn pays out rewards to stakers. Straightforward residual income and an excellent crypto for beginners looking to put their assets to work.

    Upgrading the typical memecoin tokenomics model to include yield opportunities for investors makes $GFOX an easy pick and explains the enormous presale participation. Instead of benefiting from only a deflationary token, users can additionally earn a yield on their holdings.

    Using taxation to fund staking means a direct link between ecosystem growth/ participation and staking payouts. Presale participants who stake immediately after the launch will benefit massively from the incoming trading frenzy. Smart money already knows this, and that is why whales have aggressively targeted Galaxy Fox’s presale. 

    Closing Thoughts

    The bear market has finally finished, and investors stare straight down the barrel at a two-year up-only paradigm. When everything goes up, investors want to be holding small caps/ memecoins because they will rally hardest.

    Galaxy Fox’s presale gives investors one last chance to buy a heavily undervalued crypto before the fireworks begin. Leading the race of the top 5 cryptos to buy now, $GFOX promises a spectacular price discovery round early next year. Grab an allocation today before it is too late.

    To learn more about $GFOX, visit Galaxy Fox presale or join the community

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  • Is 2024 the year of Altcoins?

    Is 2024 the year of Altcoins?

    • There is increasing speculation about the possible surge of altcoins, in 2024
    • A new altcoin, NuggetRush, is making waves for combining gaming and finance in a play-to-earn game.
    •  NuggetRush players mine gold, offering a unique crypto investment opportunity.

    In the expanding world of cryptocurrencies, there is increasing speculation about the possible surge of alternative coins, also called altcoins, in 2024. Among them, NuggetRush (NUGX) has caught the attention of investors and enthusiasts. 

    NuggetRush is a unique blend of gaming and financial technology. It goes beyond traditional boundaries to offer an exce­ptional experience. It provides an e­ngaging platform that rewards active participation. Its smart contract validation has been thoroughly audited by SolidProof, making it one of the best altcoins to buy in the crypto market.

    Let’s explore NuggetRush, an altcoin poised for potential growth in 2024.

    NuggetRush (NUGX) pioneering Play-to-Earn dynamics

    NuggetRush, a captivating play-to-earn (P2E) game that immerses players in gold and mineral mining, is poised to be among the best altcoins to buy in 2024. The platform offers a unique entertainme­nt experience where players can create avatars and make money by setting up mining facilitie­s. They receive assistance from a team of mining expe­rts. This new DeFi cryptocurrency also gives players the tools to actively participate­ in the digital economy.

    As a new DeFi crypto, NuggetRush wants to create a welcoming online community where players can enjoy Game­Fi together. They use the Ethereum blockchain to ensure that anyone can participate. This game is a special blend of strategy, thrill, and real rewards. The game characters in this project are not only entertaining to play with but also colle­ctible.

    NUGX token holders earn rewards through different methods, including quests, ranked play, battles, tournaments, and additional avenues. NuggetRush has a community-building strategy that is both potentially lucrative and self-sustaining. It collaborates with gold merchants capable of directly delivering RUGM rewards to miners’ designated locations.

    NuggetRush allows players to contribute to its development, making them game co-creators. Player feedback is actively sought and valued, ensuring that the game grows in a way that connects with the community. This approach builds a game that genuinely belongs to and is shaped by its players.

    The platform has 500 million NUGX tokens in total. The proje­ct ensures community involveme­nt by reserving 43% of the toke­ns for public ownership. This demonstrates their commitment to fostering an engaged community. 

    Currently, the project is conducting a presale consisting of five rounds. So far, they have sold over 75.4 million NUGX tokens. In the third round of the presale, the NUGX price­ is $0.013. By the fourth round, the price will have increased to $0.015. The presale has raised a significant amount of funds thanks to the enthusiasm of investors and the fact that there are no taxes on token transactions.

    NUGX’s value is targeted to reach $0.02 by its launch on significant exchanges. Another benefit of investing now is that the earlier you purchase tokens, the earlier you can claim them. So, once the five presale rounds are complete, claims will be live on the website, with tokens distributed over five weeks according to the round purchased.

    Final Thoughts

    Crypto analysts are pre­dicting that 2024 could be the year of Nugge­tRush, a new altcoin in the crypto market. This cryptocurre­ncy combines play-to-earn gaming with financial technology, making it the best crypto investment for those looking to invest in the crypto world. 

    As we approach 2024, investors seeking high-growth digital asse­ts can consider NuggetRush as a promising new De­Fi crypto. It offers unique features, impressive presale­ growth, and widespread adoption, creating an exciting opportunity. For more information about NuggetRush, visit the NuggetRush presale website

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  • 17 straight days of positive realised profit for Bitcoin, the longest streak in a year

    17 straight days of positive realised profit for Bitcoin, the longest streak in a year

    • On-chain profit metrics have picked up as the Bitcoin price has risen
    • Net realised profits have been positive for 17 days, the longest streak in a year
    • 74% of the Bitcoin supply is in profit, three months after it dipped below 50% after FTX collapsed and the Bitcoin price fell towards $15,000
    • Volatility has picked up but it is the thin liquidity which is really helping Bitcoin make a run
    • It’s been a great quarter for investors, but there remains peril, writes our Analyst

    Bitcoin had an unforgettable year in 2022 for all the wrong reasons, a collapse in price coinciding with several ugly scandals that rocked the cryptocurrency market at large. 

    Thus far this year, however, it has been bouncing back. Up 71% as we close out Q1, it is trading north of $28,000 for the first time since June 2022. 

    Looking into on-chain metrics, the positive sentiment is clear.

    Net realised profit at one-year highs

    The net realised profit of all coins, that is the difference between the price at which a coin moves and the last price it moved at, is on its longest positive run since this time last year, in March 2022. 

    For seventeen days now, the net realised profit has been positive. In other words, coins are moving at prices higher than what they were bought at (or the price at which they last moved).

    There was an 18-day positive streak in late March / early April last year, and beyond that, we need to go back to Q4 of 2021 to see such a streak, when Bitcoin was trading at all-time highs. 

    Granted, the size of the profits over the last two weeks have not been as outsized as we have seen in previous periods, but the very fact that it is a positive run after the year Bitcoin has had is notable. 

    Three quarters of the supply is in profit

    Another way to see how much things have changed is that three-quarters of the total supply is currently in profit. 

    Just before Christmas, I reported when this figure dipped below 50%, meaning for the first time since the brief flash crash at the start of COVID in March 2020 when the financial markets all went bananas, the majority of the Bitcoin supply was loss-making. 

    Three months later, the picture is a lot brighter, with 74% of the total supply now in profit. 

    Liquidity remains low as stablecoins fly off exchanges

    Interestingly, this rise in prices and profit positions is all occurring at a time when liquidity is extremely low in the market. 

    In a deep dive yesterday, I compiled an analysis showing that the balance of stablecoins on exchanges has fallen 45% in the last four months and is currently the lowest since October 2021. 

    Perhaps that is not a coincidence. The markets are ultra-thin right now, and Bitcoin, which is volatile at the best of times, has found it easier to move aggressively as a result. This also helps explain why it has outperformed the stock market so significantly, despite being so tightly correlated with it recently (although some believers are arguing it is due to banking failures pushing people to Bitcoin, but that feels like a reach). 

    Then again, Bitcoin is going to Bitcoin, and its recent volatility is not anything to write home about when looking historically, even if it has picked up compared to the relatively serene period post FTX collapse. 

    To wrap this up, it’s been a superb few months to kick the year off for Bitcoin, which is a welcome reprieve for investors who got absolutely battered last year. On-chain profit metrics have come right up as sentiment improves and prices jump. 

    But there is also low liquidity which is helping it run-up, while the wider economy presents plenty of uncertainty. Sure, it’s a great start, but it’s not out of the woods yet. 

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  • Over two-thirds of the Bitcoin supply has not moved in a year

    Over two-thirds of the Bitcoin supply has not moved in a year

    Key Takeaways

    • Long-term holders continue to sit on their Bitcoin stashes
    • Two-thirds of the supply has not changed hands in the last year, despite rampant volatility and a collapse of the Bitcoin price
    • Over half the supply has not moved in 2 years or longer

    “Supply squeeze” is a seductive phrase thrown around among Bitcoin enthusiasts. 

    It refers to the predicted propelling upwards of the Bitcoin supply as a result of the supply cap – there will only ever be 21 million bitcoins – and a constant increase in demand. 

    Whether this comes to fruition remains to be seen. But there does appear to be a growing cohort of Bitcoin investors who are holding. In fact, over two-thirds of the entire supply has not moved in over a year, an all-time high. 

    To be precise, 67.9% of the Bitcoin supply has not moved in over a year. That is extremely high, especially when considering the last year have brought its fair share of scandals, including the respective crashes triggered by LUNA, Celsius and FTX. 

    Combining these scandals with the most rapid monetary tightening in the wider economy, which have seen interest rates rise from near-zero to close to 5%, and the crypto market has been pillaged. 

    Looking at the price action over the last 12 months, Bitcoin has fallen from $41,000 to $15,000 and is now trading at $28,000, with more than its fair share of ups and downs in between. And yet, two-thirds of the supply has been stagnant. 

    Branching further out, over half the supply has now not moved in two years, close to 40% hasn’t moved in three years, while 28% has been stationary for 5 years. 

    Of course, lost coins will be included in all these statistics. Bitcoin has been around since 2009, and that means people have died, and with them access to their coins has vanished. 

    There are also simple cases of lost keys, people still roaming the Earth but with no access to their wallets. Let us not forget that Bitcoin was just a niche Internet plaything not so long ago, trading for less than $1 per coin. 

    Not to mention, Satoshi Nakamoto’s mammoth stash of an estimated 1 million coins, or over 5% of the entire supply, remains untouched and included in the above stats. 

    So make of it what you will, but Bitcoin still remains quite an illiquid market and with a dwindling supply, it is easy to see the narrative pushed by enthusiasts that if demand continues to rise, the price will only go upward. 

    Of course, whether that demand will indeed continue to rise is another question entirely, and a much harder one to answer. 

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  • Seeing Significant Growth Since The Year Began

    Seeing Significant Growth Since The Year Began

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  • Bitcoin is up in Argentinian Pesos over the last year, but natives should still avoid it

    Bitcoin is up in Argentinian Pesos over the last year, but natives should still avoid it

    Key Takeaways

    • Inflation in Argentina is now near 100%, as savings in the peso are getting crushed
    • Bitcoin, despite collapsing in the last year, is up in peso terms
    • Weak currencies are often cited as benefits of Bitcoin, but in the case of Argentina, it would be worse, writes our Analyst Dan Ashmore 
    • Stablecoins present a better case, he argues, with US dollar up 87% against the peso since 2022

    It’s a well-trodden argument, the one that states Bitcoin is purpose-built for the developing world. A more accessible financial system; a medium through which citizens can circumvent failing currencies. 

    In theory, it makes sense, and it’s something that I have written about extensively in the past. As risky and experimental as Bitcoin is, one could state a case that this enigmatic digital currency could  – one day in the future – offer such financially oppressed peoples a way to protect their wealth. 

    But that day is not now. In fact, Bitcoin is entirely useless for such a purpose. That is despite the below chart showing that Bitcoin has appreciated in value over the last year against the Argentinian peso. 

    This has seen some Bitcoin advocates – and to be clear, I am a Bitcoin investor – declare that this is a poignant display of Bitcoin’s power. But it is important to be wary of what we are benchmarking to here. The Argentinian peso is quite literally one of the world’s worst-performing currencies in recent years – plotting its value against the US dollar shows how far it has fallen.

    Bitcoin is no better than the peso

    This analysis of the Argentinan peso really has nothing to do with Bitcoin. It simply highlights how torrid a store of wealth the peso has been, and how devastating its devaluation has been for its citizens. 

    But imagine holding one’s wealth in Bitcoin? What if you were looking to send your child to college in January of this year. Tuition is, let’s say $10,000. Imagine if you had stored $10,000 in Bitcoin back in November 2021 (when it was trading at $68,000).  If tuition was due on January 1st of this year, your $10,000 would have fallen to $2,400. Need I say more?

    Instead of benchmarking Bitcoin to one of the worst stores-of-value around, it should be compared to, well, an actual store of value. If Bitcoin is to replace money, it’s not really a win if it’s better than one of the worst forms of money around. It’s the ultimate straw man argument. 

    We should be charting Bitcoin compared to an established currency. In the below graph, I have plotted the weekly percentage moves of the euro to Bitcoin (comparing both to US dollar). It’s like comparing night and day.

    Stablecoins suit Argentina better than Bitcoin

    The Argentinan example does present as a more intriguing example when considering a different type of crypto – stablecoins. Theoretically, this opens up dollar access to those who would otherwise be shut out (via capital controls, banking barriers or other). And at the same time, the asset being purchased – the dollar – is a store of wealth worthy of firing college savings into. 

    Could the day come when this may change? Sure, who knows what happens in fifty years. But I’m talking right here, right now. And Argentininans going from the peso to Bitcoin would be like jumping out of one fire and into the next. For the everyday Argentine citizen fearing for their own wealth, is there any argument at all that advocates for Bitcoin over stablecoins?

    So, arguing for stablecoins is one thing. And yeah, I can see it – citizens of high-inflation regimes are getting crushed as their currencies devalue into oblivion. 

    But Bitcoin? How can you look at these currencies and then decide Bitcoin is the solution? I’m as intrigued by Bitcoin as anyone, and I do believe that the store-of-value narrative is the one that the magical orange coin should pursue in the long-term. And hey, maybe we re-look at this peso vs USD vs Bitcoin debate in 25 years time and there is a different conclusion. 

    But right now, in the year 2023? Bitcoin is not Argentina’s answer. Far from it.

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  • Nearly 13 million bitcoins have not moved in over a year, an all-time high

    Nearly 13 million bitcoins have not moved in over a year, an all-time high

    Key Takeaways

    • An all-time high of 12.7 million bitcoins have not moved in over a year
    • That translates to two-thirds of the circulating supply
    • Only 7% of bitcoins have moved in the last month
    • History shows that long-term holders tend to rise as price falls, which may seem counter-intuitive
    • The real story is a little more nuanced, as falling trade volumes in bear markets provide a lurking variable which affects the data

     

    One of the intriguing things about blockchain is the public availability of all sorts of stats about the network.

    A lot is made of the fixed supply cap of Bitcoin, with the final supply of 21 million bitcoins slated to be hit by 2140. Bulls use this as a case in point as to why the asset is programmed to expand in price, as its scarcity will inevitably squeeze the asset upwards.

    By looking on-chain here at https://coinjournal.net/, we noticed a quirk in this data.

    Long-term holders continue to grow

    Despite the bloodbath that was cryptocurrency in the year 2022, long-term holders have continued to accumulate. Out of the 19.27 million bitcoins currently in circulation, 12.77 million bitcoins have not moved in over a year – an all-time high.

    It’s a pretty significant number. In the following chart, I have plotted these bitcoins against two other categories: firstly, bitcoins that have moved in the last month (traders), and secondly, bitcoins that have not moved in over a month but have moved within the last year (medium-term holders).

    Currently, we have 66% of bitcoins unmoved in over a year – again, an all-time high. The previous high was in September 2020 when the mark hit 63%. Prior to that, the previous high was April 2016 at 60%. 

    A further 27% of bitcoins have not moved in the last month, while the remaining 7% can be seen as traded bitcoins, moving around the blockchain in the last month.

    Why are long term holders growing?

    The obvious question is, why? Why are we seeing long-term holders growing so substantially when the market has been getting pummelled?

    Well, I decided to chart the percentage of long term holders against the bitcoin price. And the result is quite interesting – there definitely seems to be at least a moderate inverse relationship between price and long-term holders. That is, when price falls, long-term holders rise. Hmm.

    But in truth, this makes sense. As the price falls, volumes and interest in the market tend to dry up. With that, comes less trading, and by definition less holders under the one-month threshold.

    While the narrative of long-term holders soaking up increasing amounts of the Bitcoin supply is often painted in a bullish light, I’m not sure that tells the whole story when considering this historical pattern.

    Sure, it is a positive thing that the number of bitcoins that have not moved in more than one year are climbing, as it does show that these long-term holders have tended not to capitulate during the drawdowns.

    But a healthy trading market and high liquidity is associated with a bull market, which is part of the reason we are seeing an inverse relationship here. Look no further than trading volume in 2022, which fell 46% on centralised exchanges compared to the previous year – that’s trillions of dollars of activity no longer present.

    “Trading volumes have cratered across the crypto space. This has pulled down activity and it’s not surprising that the portion of bitcoins traded recently is therefore falling. The analysis of long-term holders is a more nuanced issue than the crude assumption that ‘more bitcoins in long-term wallets is bullish and therefore price will go up’. That is simply not what we have seen historically” said Max Coupland, Director of CoinJournal.

    I’ll continue to monitor all on-chain activity, as the market is certainly showing more life in these early stages of 2023, with softer inflation data giving impetus to the market that we may pivot off high interest rates sooner than previously expected. It will be interesting to keep tabs on the dynamics on-chain, therefore.

    But next time somebody declares it obviously bullish that there are less bitcoins being flung around the markets, perhaps remember that the situation is a little more complex than that.

    If you use our data, then we would appreciate a link back to https://coinjournal.net. Crediting our work with a link helps us to keep providing you with data analysis research.

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  • Grayscale Bitcoin Fund up 25% this year, but discount still killing investors

    Grayscale Bitcoin Fund up 25% this year, but discount still killing investors

    Key Takeaways

    • GBTC Fund is up 25% since the start of the year, compared to a 4% rise in the underlying asset, Bitcoin
    • The discount is now back to where it was prior to the FTX collapse, at 37%
    • The discount had hit an all-time high of 50% only four weeks ago

     

    The largest Bitcoin fund in the world, the Grayscale Bitcoin Trust, has seen its value jump by 25% since the start of the year. Bitcoin, on the other hand, is only up about 4% on the year.

    This means that the discount to the underlying asset, Bitcoin, is at its smallest level in months. I had analysed the divergence in December, only four weeks ago, when the discount hit an all-time high of 50%.

    Today, the discount sits at 37%, back to where it was before the ignominious collapse of FTX.

    What is the Grayscale discount?

    Grayscale is a trust which provides an avenue for investors to gain exposure to Bitcoin without physically buying Bitcoin. This can be convenient for institutions or other entities who may not be able to participate I the Bitcoin market directly for regulatory or legal reasons.

    But Grayscale has rarely traded at the same price as its net asset value. Previously, it had traded at a premium to the underlying Bitcoin as shares surged with investors desperate to get exposure to the high-flying cryptocurrency.

    Today, however, it is the opposite – a steep discount. While there is a chunky fee of 2% that explains some of the discount, this does not come close enough to bridging a discount of 30%+ that we have seen consistently in this crypto winter.

    The SEC recently denied Grayscale’s application to convert the trust into an exchange-traded fund, spelling bearish action around the fund. There has also been the rise of more competition, with similar funds being launched, especially in Europe, and filings for Bitcoin ETFs.

    But the most significant worry was surrounding the safety of reserves. This issue grew legs after the FTX collapse, as speculation mounted that Grayscale’s parent company, Digital Currency Group (DCG), may file for bankruptcy.

    DCG is also the parent company to Genesis, which recently laid off 30% of its staff and is reportedly considering bankruptcy. Concern grew when Grayscale refused to publish a proof of reserves report, suddenly in vogue following the nefarious actions behind the scenes at FTX.

    It cited “security concerns” as the reason that this would not be possible, but analysts decried this, with it very unclear what security concerns could be ignited by the publishing of public records on the blockchain.

    Why has the discount closed?

    While the discount is still enormous at 37%, this has narrowed from the staggering 50% it reached in the aftermath of the FTX implosion.

    There has been increasing pressure on DCG to address this discount, with calls from within the industry that the trust should allow investors to redeem their holdings, which would allow them to realise the full value of the Bitcoin they hold. This clamour may have helped narrow the gap somewhat.

    One hedge fund, Fir Tree, even launched a lawsuit against Grayscale, demanding that the company either lower its fees or allow redemptions such that the discount can be closed.

    But like everything in crypto right now, macro also has a part to play. The year has begun with crypto prices rising off increased optimism that inflation may have peaked. This follows a relatively serene month or so in crypto markets.

    The discount widened to a large degree in the aftermath of the FTX crash because people feared contagion and the chips were still falling. Similar to the peg on Tether slipping when the UST crisis occurred.

    Now that normal service has somewhat resumed, the discount has narrowed. Unfortunately for investors, it is still a staggering 37% off the net asset value. In a year where Bitcoin itself has plummeted, layering in a discount on top of that torrid price action is the last thing investors needed…

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  • SQUIDGROW – YEAR OF THE SQUID –

    SQUIDGROW – YEAR OF THE SQUID –

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