November 29, 2022 – Tom’s LOTM Blog:
Good Morning everyone – Today we’re sharing three important videos. Information from reliable sources is important for both defensive and opportunistic perspectives in the markets. Therefore, this writing is offer with both in mind. Being defensive and looking for the opportunity. I will share my comments at the end and hope that I am not adding to confusion. Comments about Grayscale Bitcoin Trust (GBTC)* are discussed in the Kitco and Coin Bureau interviews. Accounts related to LOTM bought GBTC this week.
The Three Interviews:
I: Blockworks Macro with James Block, author at Dirty Bubble Media
II: Cory Klippsten, CEO at Swan Bitcoin interviewed by Michelle Makori at Kitco News
III: Coin Bureau, an updated analysis concerning Genesis, DCG, Grayscale and Bitcoin.
I: Blockworks Macro with James Block, author at Dirty Bubble Media
Blockworks Macro is a very credible and professional source of news and education on Geo-politics, Macro investing and Blockchain.
This is a disturbing video on the world of Crypto. It is an interview with an investigative analyst who has spent time digging into the crypto world. His claim is that the majority of people/companies involved in crypto have pumped up the values though conscious or unconscious activities. That there is no value to crypto now that the musical chairs of pump and promote has stopped. His view seems sincere and credible. I am sharing to share. There are too many unknowns involved other than there are crypto bankruptcies happening.
We each need to determine our own level of exposure and commitment.
This has me thinking that with the exposure to Soluna and Galaxy and now bitcoin, I better take a more cautious view and pause or even down size exposure to Crypto, even while strongly believing in Blockchain and Bitcoin’s future. I can resume building once the dust settles.
To be blunt, this interview has left me a bit speechless.
CeFi Crypto Contagion Is Just Getting Started, Says Analyst Who Predicted FTX’s Fall 49 minutes – Blockworks Macro.
II: Cory Klippsten, CEO at Swan Bitcoin interviewed by Michelle Makori at Kitco News
Cory Klippsten, CEO of a Bitcoin only broker – not a crypto exchange which also lends crypto and bitcoin creating exposure to third party risk. Cory is very direct is stating that after this shake out, only bitcoin will be a crypto of value. The logic offered by Kippsten for only holding Bitcoin and that eventually Bitcoin will be the stand alone asset is well presented. Bitcoin has been identified as a Commodity by the SEC. Therefore, we have regulation policy for Bitcoin in the United States. Klippsten is also relatively comfortable that Grayscale Bitcoin Trust (GBTC)* is secure and not subject to third party lending activities.
Kitco and Cory Klippsten Interview Link
III: Coin Bureau, an update of news flow concerning Genesis, Grayscale and Bitcoin.
Guy, the founder and host of Coin Bureau, presents an analysis of Genesis, Grayscale Bitcoin trust and owner of both Digital Currency Group (DCG) and what might shake out in the next six months. Basically, the bottom line is that the Bitcoin inside the Grayscale trust is secure, but that DCG has a big potential obligation to meet in Q2 2023 and needs to raise money to liquidate assets to meet that obligation. The conclusion is that If DCG needs to liquidate GBTC this would apply strong downward pressure on the price of Bitcoin.
Link to Coin Bureau with founder Guy.
To summarize the Crypto situation, it seems that Bitcoin as a commodity is secure, though no one can or will rule out lower Bitcoin prices. Grayscale’s, GBTC, will likely survive as a value for its owners but the ride could be very volatile. Crypto coins other than Bitcoin could collapse. Stable coins directly linked to Fait currency, gold, silver or other hard assets will emerge as pathways linked by crypto stable coins. The crypto crisis period likely has a good three to six months, before a recovery will happen. It seems prudent to downsize exposure to Crypto for “investors” while “speculators” might seek out specific opportunities within Bitcoin and blockchain industry. In related accounts we expect sell strength to reduce position size in shares of Galaxy Digital and Soluna Holding but increase on a dollar-cost-averaging basis a position in Bitcoin, gold and silver.
For “traders,” gold and silver would be expected to outperform Bitcoin over the next six months, but after six months, Bitcoin could out-perform Gold and Silver. This is all subject to developments happening within the crypto industry. If a rescue found appears to stabilized crypto, crypto and Bitcoin could respond positively sooner.
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Written November 29, 2022, by Tom Linzmeier, for Tom’s LOTM Blog
Accounts related to LOTM, and Tom Linzmeier can & will, buy or sell securities at any time.
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