CRYPTO WORLD NEVER SLEEPS
Michael Saylor’s purchase, Grayscale sues SEC, and Crypto Regulations become a real deal
Coo! It’s me, Crypto Owl. The only bird that knows crypto stuff. Here’s what I’ve hunted for you today.
On Today’s Menu:
⏳ Estimated reading time: 3 minutes & 10 seconds
🥗 LIGHT SALAD WITH
CHICKEN: Micheal Saylor buys $10M worth of BTC and he doesn’t care about the bear market
SHRIMP: Securities Exchange Commission (SEC) is being sued by Grayscale
AVOCADO: EU finalized Crypto Anti-Money Laundering Rules
🍨 ICE CREAM: Meme of the day
MICHAEL SAYLOR BUYS $10M WORTH OF BTC AND HE DOESN’T CARE ABOUT THE BEAR MARKET
If you don’t know who Micheal Saylor is:
He’s an entrepreneur, founder, and CEO of a publicly-traded business intelligence company MicroStrategy;
an absolute Bitcoin maximalist;
a crypto billionaire;
and he also doesn’t give a sh*t about this bear market.
Sooo. During this painful bear market (or Crypto Winter, call it as you like), all we keep hearing is: 1) “Buy the dip!”; 2) “Don’t buy the dip!”.
MicroStrategy (or Micheal behind it) belongs to the first group. They just bought a dip (for a crispy $10 mill) while Bitcoin is right now crashing below $20k. And they’re proud of it. And I’m proud of them! Brave move.
The paradox is that there were rumors spreading that MicroStrategy might be facing a margin call on a bitcoin-backed loan from Silvergate Bank. Even more - MicroStrategy lost around $1.3 billion since bitcoin’s price dropped during this period of time. The cherry on top: that hasn’t stopped Saylor. Well, that’s what I call determination.
If you’re wondering why MicroStrategy’s founder decided to buy so much Bitcoin anyways - well, he was inspired by the Securities Exchange Commission (SEC) Chairman, who told that Bitcoin is a commodity. And it seems like Micheal agrees 100% with this statement.
This is what Saylor recently said: “We are in it for the long term … Our strategy is to buy bitcoin and hold the bitcoin, so there’s no price target. I expect we’ll be buying bitcoin at the local top forever. <...> I expect bitcoin is going to go into the millions. So, we’re very patient. We think it’s the future of money.”
Good for you, Micheal! Crypto Owl approves: Bitcoin IS definitely a currency of the future.
SEC IS BEING SUED BY GRAYSCALE
Okay. So, I’ve already mentioned SEC. Now, what is Grayscale? A little bit of background story.
Grayscale is the largest digital currency asset manager, which (currently) has around $12.9 billion under management.
Grayscale has an investment fund called Grayscale Bitcoin Trust (GBTC), which buys and secures Bitcoin on the investor’s behalf. If a person buys GBTC, at the same time he is also buying shares of the trust. For more accuracy: you’re not buying exactly Bitcoin, you buy shares in a Bitcoin investment trust.
Grayscale wanted to change GBTC into Bitcoin Exchange-traded fund (ETF). This specific fund ties various securities (stocks, and commodities) and allows investors to buy shares on the public market without actually owning the assets (like in this case - Bitcoin is that asset).
Why did Grayscale want such a change? The company believes that changing trust into spot Bitcoin ETF, would allow charging lower fees for investors. And that would lead to easy money moving in and out of funds.
So what’s the SEC part in this story?
In October 2021, the SEC finally allowed a Bitcoin futures ETF.
Grayscale submitted an application for SEC with a request to convert GBTC to an ETF.
SEC rejected this application and said that the Grayscale spot ETF application did not do enough to protect investors from "fraudulent and manipulative acts and practices."
And then Grayscale CEO announced this:
M. Sonnenshein also added: "We are deeply disappointed by and vehemently disagree with the SEC's decision to continue to deny spot Bitcoin ETFs from coming to the U.S. market".
I can only imagine the disappointment. I’ll make sure to keep an eye on this situation and update you. Hopefully, SEC will change its mind.
EU FINALIZED CRYPTO ANTI-MONEY LAUNDERING RULES
It happened. The European Union (EU) made a deal and set the rules for anti-money laundering in the crypto. Rules will apply to a lot of crypto transactions and will require crypto-asset service providers, for example, crypto exchange platforms like Coinbase or FTX, to store the data of all wallets that are connected to the exchanges.
The purpose of such regulations is quite clear.
The crypto world is like a wild wild west - unregulated and free. There’s no one to control bad actors. Until now.
These regulations are for taming illegal terrorists or hackers' activities, money laundering, and so on. So, recording and keeping data about every wallet and every transaction made should help to reach this goal.
However, rules will not apply to private and unhosted (by a third party) wallets. Also, it won’t impose on transfers between individuals using crypto wallets that are not based on the service providers. For example: if you want to send some ETH to your friend, and you both use MetaMask wallets, then you’re not under these new regulations.
I strongly believe that such regulations are a good thing. Don’t get me wrong. I understand that anonymity - a keystone aspect of crypto - is being sacrificed here. But not all anonymity, just a part of it. Finding a perfect balance is necessary to create a better future and a safer Crypto environment for all of us. Without regulations for illegal activities, we will never have that. And we will never have that peace from World governments.
MEME OF THE DAY
BUBBLE TEA
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Disclaimer: This newsletter is strictly educational. None of this information is intended to be financial advice. Always do your own research and act responsibly with your profits.