Click here: The Weekly Beacon – November 18 2022
We will be giving some macro economic market updates on a weekly basis. No equity recommendations will be given in this commentary, and we encourage you to contact us if you have questions regarding any observations.
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This weeks issue: FTX Fraud, Ponzi Scheme, SBF, FTX Balance Sheet, FTX Asset5s, FTX Users, Grayscale Bitcoin Trust, Bitcoin, Net Asset Value Discount, Elon Musk, Tesla, Chamath, U.S. Midterm Update. U.S. Senate Results, October CPI, Inflation, UK Inflation, U.S. Inflation, Energy Prices, food Prices, Sporting Ticket Prices, Target Earnings, Retail Sales, Walmart Earnings, Target Inventory, Foreword Looking Statements, Recessionary Fears.
Monday morning redemption requests and market sells by investors in the crypto and blockchain space can all be linked to FTX filing for bankruptcy and withholding user funds. As we followed the story last week and even over last weekend, we had no idea what to think or even what was the reason. We are trying to work through all the headlines and look past the emotional headlines. We think this is the only way to look at a situation like this. We think what Samuel Bankman-Friedand his company did was extremely bad, and we feel for investors and users who trusted him.
The grayscale Bitcoin ETF is now trading at a record discount (-42%) to NAV.
This means the Trust is trading at almost half of its value. The Trust holds Bitcoin. It allows investors to hold Bitcoin in a normal trading account (GBTC is available on most traditional trading platforms). The current price would reflect investors buying into Bitcoin at $8,500-9000. It seems retail investors have checked out of crypto, and everybody is running for the hills (we do not blame them).
This situation shows that anyone can create an asset exchange no matter the industry and that the crypto space needs more regulation to protect both users and investors.