GBTC ETHE BTC ETH w/this article + my unique perspective having worked at a blow-up of 6.3B in 2007, I can provide insight most can't, I think Bitcoin is going down more and I think GBTC will sink another 20% if not completely go "away" in next 90
days. Opinion only 1/n
This article is written very well and uses publicly available information. I believe shows too big, loaned too much, in the not most liquid asset in the world, while also having @DCGco be the 1 and ONLY liquidity provider for @Grayscale 2/n
Just like Amaranth.
We already know they looking to be "injected" with 1-2bln in Capital and effectively bought down the "gates" by stopping some activities 3/n
this is a tough spot. It means not liquid enough, hence too big on the loaning issues, and nonhedging mechanisms and poor assumptions of risk. Amaranth did same. Only, unlike here, Amaranth WAS the mkt in Nat Gas by Fall of 2007, levered 10x on 4bln, it took 3 wks to blow up 4/n
5/n article here has a very concerning quote
6/n ONLY 1 liquidity provider means ONLY 1 shop can source and "create" GBTC like the other person's article I posted in 2/n outlines. DCG and Grayscale are tied so closely that if DCG is forced to liquidate, to some degree, Grayscale will be forced, yadda, yadda. Like Amaranth
7/n In Amaranth's case, market participants had somehow figured out our Book (cant specify) and pushed against us. Being levered, kaboom. Same here without the leverage because as I tell all my clients "don't use leverage in crypto" IT MOVES ENOUGH to do very well and it does
8/n There are 2 events that can occur that will be very negative and I won't give those away here, BUT there is a SOLVE (assuming the coins are in the proper ratio's for the product stated this week) 1) an injection of 1BLN or more from well-known consortium or person, great opp
who doesn't want to work with @BarrySilbert OR
Short BTC futures yourself in proper amount (creates a credit of cash on your books and you have the asset to "cover" it at Coinbase) this ineffectually "BOXES", buys time to raise capital and if done softly could work.
10/n the Amaranth guys could not "box" their positions because the trader WAS the market, there were just no bids to hit.
It's an idea here tho, that maybe doable, doesn't seem like anyone has any better ones, atm.
11/n Finally, ARKK ARKW unless they know something we dont, why not buy spot BTC? as BTC has less risk and more liquidity than GBTC, but whatever.
Views expressed here are opinoin only, not advice, and I have no special knowledge of the situation, just opinion. Good luck.This post is based on this twitter thread.