August 29, 2023 - Daily news and crypto updates for the terminally online. 

Today joined by crypto native, and Premia parliament member, JC Denton.

ETF and Grayscale victory over SEC? Let's chat, anons

The markets are up today, what could this mean?

All right, so we got big news hot off the press.

So they found that it was unlawful in allowing Grayscale to convert GBTC into an ETF.

I'm not super up to date on but based on my old trade fine knowledge, I can give a little bit of a breakdown.

It is a private placement It is a private placement traded product where the redemptions of the underlying assets was either restricted under certain logs.

Maybe those are like, in our world, time locks.

Or you had to be a certain type of holder to be able to redeem those, those shares into its underlying assets.

And that's why it's been constantly trading to a discount because you couldn't really arb the difference between the underlying and the actual asset.

know, many moons ago, they requested to, Grayscale requested to turn into an ETF.

SEC denied them, didn't give them much context or guidance into what they needed to do to turn it into an ETF.

This is kind of a standard practice of moving into an ETF, which means that it's exchange traded, it's listed on different exchanges, and the most important part of that is the ETF redemption creation process.

So essentially what a manager of an ETF will do is they usually have different brokers that come in and quote and based on the volume of the inflows and outflows of those assets.

There is a, and this is more, like the GPTC is pretty simple because all you need is 1 asset, but with an index, it's a little bit more complex.

And so what they do is they'll give you a quote and say, hey, we need to issue 500 new shares of this asset.

And so what happens is a broker will come to you and give you that basket.

So maybe that basket is made up of 25 different shares.

So they'll go out and for, let's just say it's a one-to-one basis, they'll go out and locate all 25 shares and 500 lots.

Then what happens is they'll deliver that to the custodian of the manager.

They'll then essentially issue more 500 new ETF units into the market.

So it's just kind of, you know, the ETF is always going to be tracking what its underlying NAV is, And as it kind of exceeds that, then you can create more.

If there's outflows, then you can redeem, right?

So you can essentially take units off the market.

And so it's almost kind of like a rebasing asset in our world, I guess, but not less Ponzi like.

So they found that it was unlawful to allow, to not allow Grayscale to do this.

Obviously just coming down the pipe today, a lot of people thought it was going to be rejected.

However, essentially it lays a groundwork of, okay, well, they can't, you know, they can't stop them from doing this now.

Essentially, they have to allow them to convert GBTC into an ETF, which means that they'll probably, all the rest of the ones that are currently pending and being delayed will just have to approve all of them because then it will be, you know, they can just file lawsuits against the SEC and say, hey, you did it for this person, why can't you do it for us?

We have the same restrictions in place to kind of govern all the different concerns that the SEC may have, mostly around the manipulation of the spot market.

Well, Grayscale filed it for all of their assets, I think.

But I don't think that, I don't think we're going to see a Zcash ETF but… because I know there was a great scale Zcash fund.

But I definitely bet we'll see Bitcoin and Ethereum pretty much back to back.

People have been talking about this GBTC trade for a while now.

I mean, it should pretty much come up to parity.

No, this isn't a trading stream, but nonetheless Yeah

BTC domination go up in moves like this, right?

a dominance chart was kind of screaming that if you were looking at BTCD over the last little bit.

It's been looking like it was just getting obliterated.

But yeah, I mean, regardless, it's good for the markets.

Since we had a little, I mean, it's been slow since we saw the move down It has been slow

bro, I mean just look at the type of shit we've been doing on chain

Yeah Like dumping ourselves on each other with friend talk.

You can compare the types of projects and protocols that people are wasting their time on compared to last season.

Like last season it was, I give it to some of the developers, like you know using new forms of stable coins with interesting types of collateral Is much more invigorating than

Looks like stairs gram pumps on this news the front deck clone.

So it was a pre-sale that I think a few influencers were in.

I think Ansem and Iceberg I saw them in the chat.

It launched at a pretty high price for a memecoin, like $3 million or something after like 10 minutes, 3 million market cap.

I only went in like really small when I posted that link.

And everyone, everyone is like validating it.

Like Sokka started like tweeting about it, like indirectly validating it.

Which is the way he pumps coins, like talking about them indirectly.

I mean that's not a fair assumption because do you remember when he tweeted last night and then shares was like oh he's supporting us and then he's like is there there's no I like Why you take that as a direct correlation of me supporting this fork or clone is silly.

I'm not like accusing him of anything, but that's just the way he operates with every coin including the ones that he supports.

He like talks about them in a meme way or indirectly it's like validates their existence that's that in itself

is it wrong for your intern to have so you use the buffer to put it Is it wrong for you to be in tune with the market so to always be having little naked bags of on-chain dog shit and then tweet out your feelings about it.

You're not pumping it purposefully, like just because you have the bag, right?

Like you would probably say what you're saying regardless of you having the bag.

You just have a little 1 because you understand narratives, the way the market works, and you would be shooting yourself in the foot.

It's the whole, do you want to make money kind of thing.

Like, I don't think that anyone actually thinks that, like in all of existence and all of history of decentralized finance, the only fork to ever like truly win is Ethereum.

So like, it's hard for me to look at forks of something and see it as the dominant force or the 1 that will overtake the original because that would negate understanding of network effects.

So TLDR, I tend to side with Sokka's follow-up that like, even if he did have some type of financial interest by holding some small amount of this on-chain garbage.

And I'm not saying that because of relatives, I'm just referring to like any low liquidity shitcoin we're trading is on-chain garbage.

But I don't think that that means like he's tweeting about it directly to pump it.

Like anything that he tweets about any topic that could relate to a token or some asset, there is a group of people that will say that person is talking about this.

It's actually like 1 of my favorite things about Twitter is that you know you can not even subtweet but just be talking about someone or something that happened and you know be speaking about it in generalities but nobody actually knows who or what you're talking about.

People will assume that you're talking about something that has to do with them or something that happens to them and it's like totally out in left field you know what I mean but that part's like 1 of the fun things about it, that if you understand that people will think this way or that people do think this way, then you can use that to your advantage.

Let's just say most coins, the sucker would not mention them with 3 million market cap.

I mean, I've always been opposed to this Bill Ackman style of pushing moves or narratives or whatever in so that you can make profitable trades off of them.

I get the power, I get the influence side of things, but I just think it's silly.

The problem is that crypto in general is so liquid that-

Bill Ackman can do it with traditional markets.

There would have to be an understanding of, like, base attention gravity that, like 1 would hold in order to be able to move a market and then you would have to say okay once you've reached this like level of attention gravity you can no longer tweet about crypto

I think the way he does it is subtle enough that it's really not that bad compared to some people.

I don't actually have any problems with him.

Is it because it's not bad because it's more...

He doesn't literally just say the ticker.

He doesn't say the ticker and let's go to the moon and then dumps the top on you.

He like kind of inset it for a few tweets until

yeah, but I think that I think his approach is more effective to people that are allergic to blatant.

But I just think that if he did anything, why, I know he did that roll bit thing, but anyways, we're talking too much about individuals.

So we'll see what happens and develops today.

I'm sure we'll come back to it tomorrow, but who knows?

We were just discussing yesterday that September is probably gonna be a down month and then hopefully that's the beginning of like the next bull per se.

But maybe it comes to a little bit sooner.

I was expecting maybe closer to October, maybe even Q1.

I don't know how many of the stats too for like happening events.

Like how much time before or after a happening event does the market actually start to move?

That's something we should look into maybe for tomorrow.

All right, nonetheless, into more other SEC news, Impact Theory yesterday was essentially ordered to I think they agreed to it actually, but to do full disgorgement.

To podcast, It's a podcast that's super popular.

I find myself like when I turn YouTube on and I like take a nap, when I wake up, it's like playing.

He's been doing a decent amount of stuff in the crypto space.

He's got, he's had like the real vision guy, Raoul on sometimes.

And he raised like 30 million, But he put direct, like in the actual sale, the terminology was pretty securities offering like.

Because he was like, we're going to build the next Disney.

And if you get a founder's key, then you'll be an owner of the next Disney.

He definitely didn't have his lawyers look over that.

Yeah, I don't know too much about him, but I think that that's 1 of the reasons why we wanted to start doing this.

Like I've always seen an issue with these kind of web 2 grifters who find their way over to crypto And they find some way to drag in millions of people into some...

They're monetizing the community, but then it usually ends up bad.

And then all those people have resentment towards crypto.

I remember when I first started looking on YouTube for stuff.

It was just like news type shows that I would see and then there are a few guys doing podcasts.

Like it was just people making videos of like high yield interest programs and fucking like crypto forex scams and just tons of fucking videos of showing people how to deposit their money into these these scam sites.

It's like 10 seconds on the site, you'd know that it was an absolute scam.

But it surprises me every day how many people deposit money into those.

It's very short-lived and it's bad for the market makes people Like very pessimistic about crypto

If that's your entry point is you're like, okay, there's this person that you know provides me entertainment and then they're trying to monetize their community and you know I'll try this crypto thing because he's doing it and then it's just like a complete flop.

In 2021 so many like quote-unquote normies were asking me about NFTs and they all knew OpenSea.

Like that was a good point to onboard people but then they all got burned with like scams like Logan Paul stuff and whatever.

I mean, the Gary Vaynerchuk was the first 1 to actually make the move.

And anyone and it was like mostly crypto natives that saw like web 2 people coming into the space to do it.

And so like, I loaded up on a bunch of the friends and sold way too early like always but it's just it's like you get 1 you get 1 like a Gary Vaynerchuk first 1 comes in everyone that buys you can make like 8x on their money right And then every subsequent release is kind of a flop.

And then you've got all the different copycats coming after the fact that it's a flop.

The survivorship bias of the first 1 being like the most successful and making money and brings in like large wake of capital on.

So We just gotta make sure that we're watching out for that wake, cause that's when the money's coming.

The thing is, I think that they have like a, well, I mean, I know they do all of the like really quote unquote high value YouTubers.

There's like a few of them now, but they all have like large, like they're all, they pool their investments together.

Yeah, he talked about it When he was just being buying Like Gary called them just like Nice Denton

Yeah, he was talking about how they all got on a call and he was telling them like just to buy, you know, punks now.

So they were like, they were 1 of the waves of the punk sweeps that happened.

So there had to have been some type of discussion over this meta of selling NFTs and a bunch of them got in and started their own NFT project.

Because you just saw a flood of these YouTube content creators coming out with, whether an NFT or they were associating themselves with an energy project.

See all Eden Aesthetix transcripts on Youtube

Eden Aesthetix : Episode #05 - Featuring JC Dention