WEBVTT - Commodities, Conversions, Frauds, and a Parade of Horribles 0:00:00.040 --> 0:00:02.400 Hello, and welcome to another episode of the Markmas Show 0:00:02.400 --> 0:00:05.240 where we talk about the decentralized revolution the world is 0:00:05.240 --> 0:00:08.480 going through. We're talking about bitcoin, We're talking about cryptocurrencies. 0:00:09.039 --> 0:00:10.760 I'm trying to keep you up to date on how 0:00:10.800 --> 0:00:12.960 this world is changing, looking at it through the lens 0:00:13.000 --> 0:00:16.400 of politics, looking at through the lens of finance, and 0:00:16.440 --> 0:00:20.360 of course technology, as those three come together on a 0:00:20.440 --> 0:00:26.640 collision course. Now politics, finance and technology. Of course politics 0:00:26.680 --> 0:00:29.440 and finance go together. You know, the old days of 0:00:29.520 --> 0:00:32.680 you of being a financial analyst means how I would 0:00:32.720 --> 0:00:36.199 look at data like economic data, I would look at 0:00:37.000 --> 0:00:42.400 financial numbers. Unfortunately, today it's mostly politically driven. We're all 0:00:42.400 --> 0:00:45.360 trying to guess what the Federal Reserve, what Jerome Powell 0:00:45.440 --> 0:00:48.400 is going to do, what's in his head, and it's 0:00:48.440 --> 0:00:51.720 mostly politically motivated. There's mid terms coming up. What will 0:00:51.760 --> 0:00:53.800 they do before the mid terms? Are you know which 0:00:53.800 --> 0:00:56.520 president are they going for? Uh? And then even even 0:00:56.520 --> 0:00:58.640 when we get into the more of the financial system, 0:00:58.680 --> 0:01:01.920 like the SEC secure these Exchange Commission being headed by 0:01:02.000 --> 0:01:06.000 someone named Gary Gensler and his decisions are very politically motivated. 0:01:06.040 --> 0:01:07.840 So we have to look at the political side to 0:01:07.920 --> 0:01:10.360 understand what's going on there, so then we can understand 0:01:10.360 --> 0:01:12.160 what effects that will have on the financial system. And 0:01:12.200 --> 0:01:15.480 of course UM technology is what changes everything, and so 0:01:15.480 --> 0:01:17.240 that's kind of where we're at today. We're looking at 0:01:17.240 --> 0:01:20.399 the head of that and there's big news because the 0:01:20.440 --> 0:01:25.480 head of the SEC just made a big decision this week. 0:01:25.480 --> 0:01:27.399 As a matter of fact, there was two really big 0:01:27.440 --> 0:01:30.759 things that the head of the SEC said this week. 0:01:31.600 --> 0:01:36.080 The SEC um you know, it's a small or a 0:01:36.160 --> 0:01:41.040 small ish organization inside the government, but if you're an investor, uh, 0:01:41.120 --> 0:01:43.920 if you're involved in money and finance, and they're very 0:01:44.040 --> 0:01:48.600 very powerful, very big organization. And so the SEC Securities 0:01:48.640 --> 0:01:54.240 Exchange Commission are basically there to keep you safe, supposedly, 0:01:54.880 --> 0:01:57.160 so everything they do is trying to keep you safe. 0:01:57.360 --> 0:02:00.040 They're trying to prevent companies from scamming you and it 0:02:00.120 --> 0:02:03.720 been you off and things like that. UM but of 0:02:03.760 --> 0:02:06.880 course it doesn't really work out that way. So, for example, 0:02:07.000 --> 0:02:11.040 the SEC puts rules into place like accredited investor laws 0:02:11.080 --> 0:02:14.960 for example, So an accredited investor means that in order 0:02:15.000 --> 0:02:18.320 to get into like the really really good deals, like 0:02:18.360 --> 0:02:21.480 the private money deals where you can make huge returns 0:02:21.480 --> 0:02:23.720 on your money, In order to get into those types 0:02:23.760 --> 0:02:25.320 of deals, you have to be what's known as an 0:02:25.440 --> 0:02:29.000 accredited investor, and that means that you have to make 0:02:29.120 --> 0:02:31.680 over a certain amount of income. Um, you have to 0:02:31.680 --> 0:02:34.320 have an over a certain amount of assets, which means 0:02:34.320 --> 0:02:37.000 you basically are in like the top, I don't know 0:02:37.120 --> 0:02:42.880 one percent of of of people in the United States 0:02:42.960 --> 0:02:48.000 when it comes to income. Let's see what the updated 0:02:48.080 --> 0:02:57.320 accredited investment numbers are here. Requirements for credit investors. Okay, 0:02:57.320 --> 0:03:00.600 I must have an annual income exceeding two hundred dollars 0:03:01.160 --> 0:03:04.640 or three thousand for joint income for the last two years, 0:03:05.160 --> 0:03:07.800 with the expectation of earning the same or higher income 0:03:07.840 --> 0:03:10.200 in the current year. So you have to make at 0:03:10.280 --> 0:03:12.560 least two hundred thousand or three hundred thousand jointly and 0:03:12.639 --> 0:03:15.200 be making more. You could also be considering a credit 0:03:15.200 --> 0:03:19.040 investor if you have a net worth exceeding one million, 0:03:19.720 --> 0:03:24.200 either individually or jointly with their spouse. UM, but I 0:03:24.240 --> 0:03:29.000 believe that cannot include your private residence. So you have 0:03:29.040 --> 0:03:30.480 to have a million dollars of assets. So that's so 0:03:30.520 --> 0:03:32.959 your credit investor. So you can't get into the very 0:03:33.040 --> 0:03:35.520 best deals, the really really good deals. The private deals, 0:03:35.560 --> 0:03:37.520 the ones that make a lot of money unless you're 0:03:37.520 --> 0:03:40.240 a credit investor. Now what happens is because of that, 0:03:40.360 --> 0:03:43.320 it keeps the average person out. And then the insiders, 0:03:43.440 --> 0:03:46.200 the rich people, they get into all those early round deals, 0:03:46.440 --> 0:03:49.560 they get into venture capital, they get early round steaks 0:03:49.640 --> 0:03:53.640 into the Tesla's and the facebooks and the ubers. And 0:03:53.680 --> 0:03:57.240 then when the company runs for a decade and it 0:03:57.280 --> 0:04:01.000 goes public. As soon as it goes public, then the 0:04:01.080 --> 0:04:04.480 average person can go buy that stock. And then what happens, Well, 0:04:04.480 --> 0:04:07.400 those vcs that got in really early, they dump it 0:04:07.480 --> 0:04:10.520 on you. So typically once uh I p O s 0:04:10.640 --> 0:04:13.640 happened um in national public offerings and the stock goes 0:04:13.760 --> 0:04:16.720 public where the average person, the non acredit investor can 0:04:16.720 --> 0:04:19.720 get it, well, they get dumped on and the price 0:04:19.720 --> 0:04:23.599 typically goes down. So good job SEC protecting everybody. Um, 0:04:23.760 --> 0:04:26.800 do we have a applause? I think we have an applause? There. 0:04:27.480 --> 0:04:31.000 Let's see here. I'm not good with my sound effects, 0:04:31.000 --> 0:04:33.080 will try to get better at it. There we go. 0:04:33.080 --> 0:04:35.640 Good job, SEC, Good job. I appreciate all the work 0:04:35.640 --> 0:04:41.200 that you've done protecting all those non acredit investors. So, um, 0:04:41.240 --> 0:04:43.440 you know, like I've said, many times before. Of course, 0:04:43.480 --> 0:04:46.839 those non acredit investors, they're they're not smart enough to 0:04:46.920 --> 0:04:49.000 manage their own money. Never mind they made it, but 0:04:49.000 --> 0:04:50.760 they're not smart enough to manage it. But there is 0:04:50.800 --> 0:04:55.000 no protections on buying lottery tickets, are going gambling a casino, um. 0:04:55.040 --> 0:04:57.400 But anyway, back to the SEC, that's what they're to protect. 0:04:57.400 --> 0:05:00.680 And so the SEC wants to protect us from ourselves, 0:05:01.000 --> 0:05:03.360 and we've been waiting on them to do a lot 0:05:03.400 --> 0:05:07.520 of regulations on what they consider cryptocurrencies and how we 0:05:07.600 --> 0:05:12.119 regular cryptocurrencies. Now. Gary Gensler, he took over the SEC, 0:05:12.560 --> 0:05:14.120 I don't know, maybe the last year or two. I 0:05:14.120 --> 0:05:17.080 forget exactly when he came in, and everybody in the 0:05:17.080 --> 0:05:20.560 crypto space was pretty hopeful of having Gary Ginser come 0:05:20.560 --> 0:05:24.560 in because Gary gains Are understands bitcoin and cryptocurrencies very well. 0:05:24.600 --> 0:05:29.760 As a matter of fact, Gensler taught courses on bitcoin 0:05:30.120 --> 0:05:32.840 at m I T. If you're not familiar with the 0:05:32.880 --> 0:05:36.239 m I T. It's one of the most prestigious schools 0:05:36.240 --> 0:05:38.680 when it comes to science and technology. So he's at 0:05:38.720 --> 0:05:41.480 the most prestigious school for science and technology and he's 0:05:41.520 --> 0:05:45.800 teaching classes on bitcoin like he gets it very very well, 0:05:45.839 --> 0:05:48.000 he's a proponent of it. He was Why was he 0:05:48.040 --> 0:05:50.400 teaching people about it because he wanted them to know. 0:05:50.720 --> 0:05:53.080 He wanted to advance it. So he got it, and 0:05:53.120 --> 0:05:56.000 we thought that'd be really good. But of course he 0:05:56.120 --> 0:05:59.720 hasn't been so good. Maybe for more political reasons. We 0:05:59.760 --> 0:06:03.640 can talk about that. But um, this week seces Gary 0:06:03.680 --> 0:06:10.480 Ginsler reiterated that bitcoin alone is a commodity. What does 0:06:10.480 --> 0:06:15.720 that mean, Well, most cryptocurrencies are what they consider an 0:06:15.839 --> 0:06:22.200 unregistered or an unlicensed security. Now, companies that create unlicensed 0:06:22.200 --> 0:06:25.560 securities or sell unlicensed securities, or people that talk about 0:06:25.640 --> 0:06:28.720 buying unlicensed or unregistered securities could get in a lot 0:06:28.720 --> 0:06:30.440 of trouble. As a matter of fact, we've seen many 0:06:30.520 --> 0:06:35.520 celebrities actually get in trouble with fines and lawsuits for 0:06:35.640 --> 0:06:39.120 talking about cryptocurrencies. They're getting paid to promote them, the 0:06:39.160 --> 0:06:42.760 Paris Hilton's or the a cons um they get paid 0:06:42.800 --> 0:06:45.440 to promote it, talk about it publicly, but it's an 0:06:45.520 --> 0:06:48.880 unregistered security and they've gotten in trouble for it. And 0:06:48.920 --> 0:06:51.800 so a lot of talk has been what what's unregistered securities? 0:06:51.839 --> 0:06:54.440 What's not? But that your U S Securities and Exchange 0:06:54.440 --> 0:06:58.240 Commissioner Gary Ginsler has reiterated his claim that bitcoin is 0:06:58.360 --> 0:07:04.000 a commodity. Um some quote some like bitcoin and that's 0:07:04.040 --> 0:07:07.320 the only one, Jim, I'm going to say, because I'm 0:07:07.360 --> 0:07:10.560 not going to talk about any of these tokens that 0:07:10.640 --> 0:07:14.800 my predecessors and others have said are a commodity, Gainsler 0:07:15.280 --> 0:07:21.120 said an interview with CNBC's Jim Kramer on Monday. Some 0:07:21.240 --> 0:07:24.480 like bitcoin and that's the only one. That's what he said. 0:07:24.720 --> 0:07:29.120 Now again, Uh, this is a departure from his predecessors 0:07:29.280 --> 0:07:32.400 and his unwillingness to define Ethereum as the same way. 0:07:32.440 --> 0:07:35.520 So his predecessor said the theorium maybe he said for 0:07:35.600 --> 0:07:39.160 sure it was a security, but it could have converted 0:07:39.280 --> 0:07:42.600 into a commodity, is what they said before. Um, But 0:07:42.680 --> 0:07:46.440 now Gainsler's like, nope, Um, I'm the only one that 0:07:46.480 --> 0:07:49.040 I see it is that he says. Uh. He said 0:07:49.080 --> 0:07:52.800 crypto financial assets have the key attributes of a security, 0:07:52.880 --> 0:07:57.200 he said recently, noting there's always almost a centralized entity 0:07:57.320 --> 0:08:01.800 that directs projects and stands to profit the most. That 0:08:01.920 --> 0:08:04.640 was certainly the case when the Ethereum blockchain fit first 0:08:04.680 --> 0:08:08.360 burst onto the scene with an initial coin offering. A 0:08:08.400 --> 0:08:11.520 motley crew of builders and investors and institutions such as 0:08:11.560 --> 0:08:18.800 the Ethereum Foundation. So but then in sec director um 0:08:18.920 --> 0:08:22.679 set Ethereum might be able to have reached the level 0:08:22.680 --> 0:08:27.320 of a commodity, but Gary Ginsler doesn't think so, which 0:08:27.360 --> 0:08:30.160 is pretty interesting. Um. Now this goes back to what 0:08:30.280 --> 0:08:34.680 I've been saying, which is, um, the real revolution. There's 0:08:34.679 --> 0:08:38.600 a technological revolution happening here today, and most people are 0:08:38.600 --> 0:08:41.200 completely blind to it because of cryptocurrency are blocking that. 0:08:41.240 --> 0:08:43.679 But there's a real revolution happy today. The real revolution 0:08:43.960 --> 0:08:48.720 is d centralization. That's the real revolution here. Now, per 0:08:48.760 --> 0:08:52.760 the words of the SEC right here, it says that 0:08:54.960 --> 0:08:58.960 says crypto financial assets are security. Um, they're always almost 0:08:58.960 --> 0:09:01.240 a centralizing see that REX projects and stands to profit, 0:09:01.520 --> 0:09:05.640 so they're not decentralized. The revolution is decentralization. Most cryptoists 0:09:05.679 --> 0:09:08.240 aren't anything but bitcoin. That's Gary Gunzo's word, is not mine. 0:09:08.320 --> 0:09:10.640 I got a lot more to cover, including a really 0:09:10.679 --> 0:09:13.079 big ruling that they made this week and it fired 0:09:13.120 --> 0:09:16.160 off a lawsuit. We're gonna see massive fireworks happening. You 0:09:16.160 --> 0:09:17.560 don't want to miss what I'm about to talk about. 0:09:17.559 --> 0:09:19.959 In a second. You're listening to the Markma show. UM 0:09:20.000 --> 0:09:22.280 talking about bitcoin and cryptocurrencies. I'll be back with more 0:09:22.280 --> 0:09:25.160 in a minute. Don't go away, all right, Welcome back. 0:09:25.360 --> 0:09:27.840 You're listening to the Markma Show. We're talking about the 0:09:27.960 --> 0:09:33.040 decentralized revolution that's happening bitcoin, cryptocurrencies, the way the world 0:09:33.120 --> 0:09:35.720 is changing, politics, finance, all of that. Now. I call 0:09:35.760 --> 0:09:41.600 it the decentralized revolution because that's the revolution from from 0:09:41.600 --> 0:09:43.680 many standpoints. On a two and a fifty year time frame, 0:09:43.720 --> 0:09:48.000 a pendulum swings back in the world, swings to centralization 0:09:48.160 --> 0:09:52.839 or globalization, and we're peeking out right now, and then 0:09:52.880 --> 0:09:56.760 the pendulum swings back the other way to decentralization. At 0:09:56.760 --> 0:10:00.319 the very same time, we have a technological revolution that's 0:10:00.320 --> 0:10:02.680 happening on a fifty year time frame. And the technology 0:10:02.720 --> 0:10:05.000 revolution that's happening right now is giving us a new 0:10:05.040 --> 0:10:09.640 technology that gives us decentralization. That is the revolution. Now, 0:10:10.840 --> 0:10:12.839 that's why I called this. What we talked about is 0:10:12.880 --> 0:10:14.760 the decentralized revolution. Talking about the way the world is 0:10:14.800 --> 0:10:18.720 decentralizing from a political standpoint, from a geopolitical standpoint, from 0:10:18.720 --> 0:10:21.240 an energy commodity standpoint, and of course it's all being 0:10:21.360 --> 0:10:24.400 led by the changing of the money. Now I make 0:10:24.440 --> 0:10:26.840 that point to tell you that that's the revolution. And 0:10:26.960 --> 0:10:31.640 Gary Gensler, the head of the SEC basically said as much, UM, 0:10:31.679 --> 0:10:36.679 saying that only bitcoin is a commodity. All the rest 0:10:36.760 --> 0:10:41.640 appeared to be some sort of security because of the centralization. 0:10:41.720 --> 0:10:45.680 There's always, in his words, almost always a centralized entity 0:10:45.720 --> 0:10:48.319 that directs projects and stands to profit the most. Um. 0:10:48.360 --> 0:10:51.760 It was it's the case with ethereum. Um blah blah blah. 0:10:52.040 --> 0:10:54.160 I'm not going to read all that again, um O. 0:10:54.320 --> 0:10:56.920 G bitcoin er Jamison Lob for instance, made distinction recently 0:10:56.920 --> 0:11:01.319 saying most cryptos are decentralized in name only or dinos. 0:11:02.360 --> 0:11:04.840 I hadn't heard that term before, dinos, but I like it. 0:11:04.880 --> 0:11:08.920 Shout out to Jamison Lop and likely Unregistered Securities micro 0:11:09.000 --> 0:11:13.480 Strategy CEO Michael Sailor called for cryptos quote parade of 0:11:13.760 --> 0:11:18.160 horrible to be stamped out by regulators now, um. Shout 0:11:18.160 --> 0:11:22.760 out to Michael Sailor. UM. I don't necessarily agree with them. 0:11:22.800 --> 0:11:25.280 You know, I'm not a big fan of regulations. Let 0:11:25.320 --> 0:11:27.240 people do what they want, in my opinion, but they 0:11:27.280 --> 0:11:30.520 should know what they're doing. Now. There is something about 0:11:30.760 --> 0:11:35.160 a fraud, so if or a scam, if I were 0:11:35.200 --> 0:11:36.920 to say that I was going to sell you one thing, 0:11:36.960 --> 0:11:39.160 but I delivered you something else. That would be fraud 0:11:39.200 --> 0:11:41.480 or that would be a scam, and there there are 0:11:41.600 --> 0:11:44.320 laws against that. And so if I were to sell 0:11:44.360 --> 0:11:46.120 you a token and tell you that it was a 0:11:46.200 --> 0:11:50.720 decentralized protocol but it wasn't, that would be a fraud 0:11:50.800 --> 0:11:56.040 or a scam, and so that should be illegal, and uh, 0:11:56.240 --> 0:11:58.800 you know, for them to be stamped out by regulators, 0:11:58.800 --> 0:12:00.960 I suppose the regular I should say, hey, you guys 0:12:00.960 --> 0:12:04.560 are actively purpetating frauds and scams. You're selling things that 0:12:04.600 --> 0:12:07.440 you promise are something but they're not UM. So I 0:12:07.440 --> 0:12:10.440 suppose there could be something there for that UM. In 0:12:10.440 --> 0:12:12.880 Sailor's world, the government stamp up approval of stepping stone 0:12:12.920 --> 0:12:17.880 towards Bitcoin being embraces a Treasury reserve asset UM. But 0:12:18.000 --> 0:12:19.760 that's not the big news that I want to talk about. 0:12:19.840 --> 0:12:22.960 The big news that I want to talk about is 0:12:23.280 --> 0:12:27.240 uh gray scale. Now. You might have heard of gray 0:12:27.280 --> 0:12:29.280 scale before. If you haven't, you certainly are going to 0:12:29.360 --> 0:12:33.120 hear about it now because gray scale gray scale was 0:12:33.200 --> 0:12:36.800 like really the first way that allowed people to buy 0:12:37.080 --> 0:12:40.400 bitcoin UM through like a four oh one K or 0:12:40.440 --> 0:12:42.199 a mutual fund or if you're like a big fund. 0:12:42.240 --> 0:12:43.600 It was the first way you could buy it through 0:12:43.600 --> 0:12:46.920 a financial product as opposed to buying it directly. Now 0:12:46.920 --> 0:12:48.920 why would you need that? Well, the average person, you 0:12:48.920 --> 0:12:51.040 and I wouldn't. But if you had money in an 0:12:51.080 --> 0:12:52.840 I RA A or in a four oh one K, 0:12:54.840 --> 0:12:56.959 or if you ran some sort of a fund, then 0:12:57.000 --> 0:13:00.160 you're not able to go buy bitcoin, all right, not 0:13:00.200 --> 0:13:02.560 a security. And so they created a fund like an 0:13:02.559 --> 0:13:03.960 e t F, not an e t F and we're 0:13:04.000 --> 0:13:06.679 gonna talk about that, but similar to that that allows 0:13:07.280 --> 0:13:09.280 you to buy it through those those types of vehicles. 0:13:09.400 --> 0:13:10.960 So it was the it was the first way to 0:13:10.960 --> 0:13:14.679 get ahold of bitcoin that way. Now they haven't. It's 0:13:14.720 --> 0:13:16.880 not an e t F and that's the crux of 0:13:16.920 --> 0:13:18.920 the matter that we're gonna talk about today. But um, 0:13:19.120 --> 0:13:25.080 gray Scale created something else UM not a not a 0:13:25.240 --> 0:13:28.560 E t F UM, but but but something like that, 0:13:28.840 --> 0:13:31.760 UM that that allowed people to get access to it. 0:13:32.520 --> 0:13:34.920 But of course gray Scale and a lot of other 0:13:34.960 --> 0:13:38.160 people want to create a bitcoin e t F and 0:13:38.280 --> 0:13:42.880 exchange traded fund. Gray Scale is more like a close 0:13:42.960 --> 0:13:44.720 end fund. And I'll explain to you what the difference 0:13:44.760 --> 0:13:49.920 is But so, um, Gary Ginsler at the SEC has 0:13:49.960 --> 0:13:54.600 been approving bitcoin e t fs, but they're not the 0:13:54.679 --> 0:13:56.040 right type of e t f s. What do I 0:13:56.040 --> 0:13:59.280 mean by that? So? Um, you have an e t 0:13:59.440 --> 0:14:02.480 F that's cash settled, or futures that are cash settled, 0:14:02.559 --> 0:14:04.800 or an e t F that tracks the price of 0:14:04.840 --> 0:14:08.160 the asset, and then you have one that's physical that 0:14:08.280 --> 0:14:13.600 actually holds the asset. One allows you to basically bet 0:14:13.679 --> 0:14:16.120 on the price going up or down, and one actually 0:14:16.200 --> 0:14:18.439 holds the asset to go up or down. Now, for me, 0:14:21.000 --> 0:14:23.880 I don't believe in all this manipulation and all this 0:14:24.040 --> 0:14:26.840 leverage and all this other garbage out there. I think 0:14:27.040 --> 0:14:29.600 the laws of supply and demand, if all these funds 0:14:29.600 --> 0:14:32.440 bought bitcoin, they would take the supply off the market, 0:14:32.440 --> 0:14:34.720 it would increase the demand, and it would push the 0:14:34.760 --> 0:14:37.280 price up. But when you create these e t f 0:14:37.360 --> 0:14:40.080 that allow people to just basically gamble on the price 0:14:40.560 --> 0:14:42.920 instead of putting the money into bitcoin and buying bitcoin, 0:14:43.280 --> 0:14:45.960 now they're just gambling on the price of bitcoin. So 0:14:46.040 --> 0:14:48.480 Gary Ginsler seems to think that's okay. He seems to 0:14:48.560 --> 0:14:52.080 have approved several of those, but he won't approve a 0:14:52.200 --> 0:14:59.760 physical e t F why. I don't really know. Um. 0:14:59.800 --> 0:15:02.200 I guess I could speculate, but I don't want to 0:15:02.200 --> 0:15:05.040 do that right now. I'm not really sure why he doesn't, 0:15:05.040 --> 0:15:07.840 but UM, he certainly gets bitcoin, and I don't know 0:15:07.840 --> 0:15:10.040 why he would do that. So anyway, gray Scale, I'm 0:15:10.040 --> 0:15:12.840 gonna talk about gray Scale. UM, what this close in 0:15:12.880 --> 0:15:15.760 fund means. Why it's in a massive discount to physical bitcoin. 0:15:17.040 --> 0:15:18.480 We can look at it, maybe you should buy it 0:15:18.600 --> 0:15:21.080 or not, um at a discount like it is right now. 0:15:21.120 --> 0:15:23.880 But they want to convert their clothes in fund into 0:15:23.960 --> 0:15:26.360 an e t F, which is an exchange traded fund. 0:15:28.320 --> 0:15:30.120 I think would be best for them if they did that. 0:15:30.120 --> 0:15:31.840 I think would be best for all their shareholders if 0:15:31.840 --> 0:15:33.160 they did that. I think it'd be best for the 0:15:33.200 --> 0:15:35.720 marketplace if they did that. Um. And so they want 0:15:35.720 --> 0:15:39.840 to do that, and uh. The SEC rejected gray Scales 0:15:39.880 --> 0:15:43.400 application to convert its gray Scale Bitcoin trust to an 0:15:43.400 --> 0:15:48.960 exchange traded fund this week, and so in response to 0:15:49.000 --> 0:15:51.960 that Gray Scale Investments file, they lawsuit against the U 0:15:52.080 --> 0:15:56.040 S Securities and Exchange Commission an hour after the regulatory 0:15:56.080 --> 0:15:58.600 agency rejected its application. So there was already word on 0:15:58.600 --> 0:16:01.360 the street that Gray Scale was pretty ready to file lawsuit. 0:16:01.440 --> 0:16:05.160 They were already kind of preparing to get a denied application, 0:16:06.520 --> 0:16:08.520 and so as soon as it was done, it stays here. 0:16:08.560 --> 0:16:13.400 An hour afterwards they had filed the lawsuit application. Um 0:16:13.480 --> 0:16:17.040 they the SEC rejected a citing concerns about the market manipulation, 0:16:17.480 --> 0:16:20.160 the role of tether and the broader bitcoin ecosystem, and 0:16:20.200 --> 0:16:23.320 they lack of surveillance sharing agreement between regulated market of 0:16:23.320 --> 0:16:32.360 significant size. So they're concerned about market manipulation. What do 0:16:32.680 --> 0:16:38.320 futures and ETFs that don't even own the asset do. 0:16:39.800 --> 0:16:43.240 The only thing they do is manipulate the price. So 0:16:43.400 --> 0:16:47.600 instead of buying the asset and leveraging it to short it, 0:16:48.400 --> 0:16:50.240 now I can just bet against it. It's called like 0:16:50.400 --> 0:16:52.120 naked shorting. I don't even have to own the asset. 0:16:52.680 --> 0:16:55.640 I can just bet that it goes down. Those are 0:16:55.760 --> 0:16:59.600 used to manipulate the prices. Look at gold, we don't 0:16:59.600 --> 0:17:04.000 really know and somewhere between three to five hundred paper 0:17:04.080 --> 0:17:09.240 ounces fake ounces for everyone, real physical ounce, and all 0:17:09.359 --> 0:17:13.840 that fake paper gold is used to manipulate the price 0:17:13.920 --> 0:17:16.000 of bitcoin down. So Gary Ginsler says, hey, we're not 0:17:16.040 --> 0:17:18.000 going to prove the physical because it could be used 0:17:18.040 --> 0:17:20.600 for market manipulation. No, no, no, no no, it's the 0:17:20.720 --> 0:17:23.159 fake ones that create the market manipulation. I think everybody 0:17:23.160 --> 0:17:27.399 already knows that. So anyway, that's why he exposed it, 0:17:27.560 --> 0:17:30.200 or I should say, rejected it, and gray Scale is 0:17:30.200 --> 0:17:32.560 gonna sue. Let's take a look at what the Gray 0:17:32.640 --> 0:17:36.560 Scale trust is, why it's so severely undervalued you can 0:17:36.600 --> 0:17:40.760 buy bitcoin, had a huge discount in their fund. We're 0:17:40.760 --> 0:17:42.359 gonna look at that, look at the fees involved, look 0:17:42.400 --> 0:17:43.920 at the chance of you get into your full money 0:17:43.960 --> 0:17:45.400 out of it, and so much more. In a minute. 0:17:45.600 --> 0:17:47.560 You're listening to the Market Mo Show. We're talking about 0:17:48.840 --> 0:17:52.680 the decentralized revolution, talking about bitcoin, cryptocurrencies and the way 0:17:52.760 --> 0:17:55.400 the world is changing in front of our very eyes 0:17:55.440 --> 0:17:59.119 through business, politics, finance, and technology. So I got a 0:17:59.160 --> 0:18:02.440 lot more to cover with the g BTC bitcoin trust, 0:18:02.600 --> 0:18:05.040 the discount and more when I come back in a minute. 0:18:05.160 --> 0:18:07.320 So don't go away, all right, welcome back. You are 0:18:07.359 --> 0:18:11.040 listening to the Markmas Show. We're talking about the decentralized revolution. 0:18:11.119 --> 0:18:14.639 We're talking about the world changing through a lot of 0:18:14.760 --> 0:18:18.320 crazy things. It's it's interesting as as the world change 0:18:18.359 --> 0:18:24.520 has this pendulum swings back, we get the volatility, and 0:18:24.560 --> 0:18:26.320 I think that's the best way to explain what we're 0:18:26.400 --> 0:18:29.000 what we're witnessing. And so we're talking about, uh, specifically, 0:18:29.000 --> 0:18:32.240 we're talking about the SEC Securities Exchange Commission. The head, 0:18:32.280 --> 0:18:35.840 Gary Ginsler, he knows bitcoin very well. He said this 0:18:35.920 --> 0:18:38.400 week on Jim Kramer that bitcoin is the only commodity 0:18:38.440 --> 0:18:41.000 the rest our securities. But then he went around and 0:18:41.160 --> 0:18:46.679 denied the request of Gray Scale Bitcoin Trust to convert 0:18:46.800 --> 0:18:50.679 that trust into an e t F. So I want 0:18:50.720 --> 0:18:54.160 to talk about that now. If you missed the first 0:18:54.200 --> 0:18:56.719 part of this and you're just tuning in, no worries, Uh, 0:18:56.960 --> 0:18:58.800 just don't let it happen again, of course, and the 0:18:58.880 --> 0:19:00.720 way you can do that is pull out your phone 0:19:00.800 --> 0:19:02.280 right now. But a reminder for this date, at this time, 0:19:02.320 --> 0:19:03.840 this channel. Make sure you're with me each every week. 0:19:04.240 --> 0:19:05.720 And if you did miss it, don't worry about it. 0:19:05.760 --> 0:19:08.560 I got you covered. You can just search Mark Moss 0:19:09.400 --> 0:19:13.560 podcast and you can catch me over there. Now back 0:19:13.640 --> 0:19:18.320 to what happened, Like I said, the SEC rejecting this um, 0:19:18.960 --> 0:19:25.840 he said that Gary gains SEC said that he wanted, uh, 0:19:26.359 --> 0:19:30.560 he wants to protect us because he wants to make 0:19:30.560 --> 0:19:33.280 sure there's better protection, so there's no market manipulation going on. 0:19:34.359 --> 0:19:36.400 But the market manipulation, as I was making the case, 0:19:36.600 --> 0:19:39.480 is brought on by people betting against the price without 0:19:39.520 --> 0:19:45.320 actually buying the asset itself. Allah Gold. Let's break into 0:19:45.359 --> 0:19:48.119 this a little bit now, GBTC Gray scales Bitcoin Trust 0:19:49.080 --> 0:19:52.560 it trade that a discount to nav in a VY. 0:19:52.720 --> 0:19:54.760 What does that mean in a v's is a net 0:19:54.840 --> 0:19:59.000 asset valuation, So that means that the assets that they hold, 0:19:59.119 --> 0:20:02.160 So that means that you could buy the Bitcoin trust 0:20:02.240 --> 0:20:07.320 for less then the assets that it's holding on its books. Now, 0:20:07.480 --> 0:20:10.960 why would you be able to buy a fund for 0:20:11.240 --> 0:20:14.680 less than their net asset valuation. We're gonna take a 0:20:14.720 --> 0:20:17.760 look at that. But what they're trying to do is 0:20:18.160 --> 0:20:22.320 convert this trust into an e t F, which would 0:20:22.359 --> 0:20:25.480 then really solve the problem. So it's trading at a 0:20:25.520 --> 0:20:28.040 discount because there's some problems. We're gonna dig into those problems, 0:20:28.240 --> 0:20:29.720 and if they could convert it to this e t F, 0:20:29.800 --> 0:20:33.520 it would solve the problem of this discount. Why it's 0:20:33.560 --> 0:20:37.440 trading for less than its market value? Now, like I 0:20:37.520 --> 0:20:39.520 was saying before, it's an e t F as an 0:20:39.560 --> 0:20:42.960 exchange trade fund, grad scale operates as a close in fund, 0:20:43.400 --> 0:20:46.040 and what that means is the new shares can't be 0:20:46.240 --> 0:20:50.480 created and redeemed um in line with fluctuating demand. All right, 0:20:50.520 --> 0:20:51.760 that's how an e t F functions. So an e 0:20:51.840 --> 0:20:55.320 t F, basically every dollar in would go to buy 0:20:55.359 --> 0:20:57.280 more bitcoin, and when you take a dollar out, they 0:20:57.280 --> 0:21:00.160 sell it a dollar bitcoin. But a close in fund 0:21:00.200 --> 0:21:02.680 doesn't work that way. They don't buy and sell bitcoin 0:21:02.840 --> 0:21:05.320 in line with the demand um and the e t 0:21:05.480 --> 0:21:09.040 F they call that a redemption mechanism, and that's how 0:21:09.080 --> 0:21:12.800 you reconcile the difference between the NAB net asset valuation 0:21:13.160 --> 0:21:16.160 and what the market value is. And basically, like I said, 0:21:16.160 --> 0:21:18.240 that prevents shares of the e t F from trading 0:21:18.359 --> 0:21:21.359 at a discount, so it keeps the shares um in 0:21:21.560 --> 0:21:24.680 line with the price at all times. But like I said, 0:21:24.960 --> 0:21:26.840 the gray scale bitcoin trust is way down. As a 0:21:26.880 --> 0:21:29.480 matter of fact, you can buy it almost a thirty 0:21:29.640 --> 0:21:35.320 percent discount to their net asset valuation, which sounds like 0:21:35.359 --> 0:21:39.520 a bargain. And I know some very well known and 0:21:39.760 --> 0:21:45.000 respected investors that are buying at this discount. I'm not 0:21:45.960 --> 0:21:47.880 should you, Well, I don't know. Let's take a look 0:21:47.880 --> 0:21:50.119 at that, so it says this occurs because bitcoin was 0:21:50.160 --> 0:21:53.399 added to the fund as new investors demanded GBTC. As 0:21:53.480 --> 0:21:57.680 demand waned and g BTC was sold, Bitcoin was locked 0:21:57.720 --> 0:21:59.720 in the fund, but it wasn't sold at the same 0:22:00.480 --> 0:22:03.960 as demand wane, causing shares to trade lower than the 0:22:04.119 --> 0:22:09.200 net asset value of the trust. And what they're trying 0:22:09.240 --> 0:22:11.359 to do is that they can convert the trust into 0:22:11.440 --> 0:22:14.760 the e t F. It would close the discount and 0:22:14.840 --> 0:22:18.080 then allow the bitcoin to track the bitcoin price, and 0:22:18.320 --> 0:22:20.280 for the investors that are there would be a really 0:22:20.320 --> 0:22:22.760 good thing because then the investors would be able to 0:22:22.840 --> 0:22:25.879 get the appreciation of their holdings equal to the size 0:22:25.880 --> 0:22:28.760 of the discount, which means they would make a thirty 0:22:28.840 --> 0:22:32.320