GM and welcome to The Crypto Nutshell! 🫶 🥜
The crypto newsletter that's more comforting than waking up as a friendly extra-terrestrial stranded on Earth, yearning for home... 👽🌍
Today, we’ll discuss:
Bitcoin spot ETF approval odds 📈
Grayscale’s CEO on what happens next 🏆
Supply shock incoming? ⚡
And more…
MARKET WATCH ⚖️
Price data as at 8:15am ET
Only the top 20 coins measured by market cap feature in this section
BITCOIN ETF APPROVAL ODDS RISING 🚀
JUST IN: Bitcoin ETF approval odds increase to 75% by EOY 2023 following Grayscale’s court victory. 📈
If you’ve been living under a rock, yesterday Grayscale won their court case against the SEC (more on this in the “expert of the day” section below).
Bloomberg analysts Eric Balchunas and James Seyffart have increased their Bitcoin ETF approval odds to 75% by end of 2023.
This increases to 95% chance of approval by end of 2024. 🤯
Balchunas explained that Grayscale’s victory was expected but what he did not anticipate was Grayscale receiving a ruling that “left SEC with very little wiggle room”.
The analysts go on to say:
“Beyond the legal loss, there is also the PR loss (which matters because it sets narratives, changes minds). And this got covered far and wide in mainstream media… We think the legal and PR loss will combine to make denial politically untenable.”
An interesting take that we haven’t see discussed that much. 🤔
However they also noted that approvals are unlikely to happen soon.
“We’re expecting delay orders this week on a bunch of the applications. We see approvals as highly unlikely so soon after the court decision.”
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EXPERT OF THE DAY 💰
Yesterday was a watershed moment for Bitcoin as Grayscale won a huge lawsuit against the SEC. 🥊
In case you missed it, here’s the juice:
The U.S Court of Appeals ruled 3-0 in favour of Grayscale. (Big L for ol’ Gary Gensler)
The judges found the SEC had no grounds to stand on in denying Grayscale’s Bitcoin ETF application
The judges told the SEC their decision making had an "absence of a coherent explanation" and they were being "arbitrary and capricious"
This is a HUGE win for Bitcoin and the crypto space as a whole as it paves the way to a spot Bitcoin ETF. 🙌
What happens now?
Yesterday, CEO of Grayscale, Michael Sonnenshein jumped on an interview. Here's what he laid out:
This is a huge victory for not only Grayscale, but Bitcoin, crypto & investors as a whole.
The SEC now has 45 days to request a re-hearing. If they don't, the court will issue a final mandate.
Following this, Grayscale will look to convert it's Bitcoin Trust (GBTC) to a spot Bitcoin ETF.
Day 1 of the 45 day countdown was yesterday. So we have a month & a half left to see what happens. ⏰
“It’s a huge victory for us, for our investors, the crypto community, any investing community as a whole.”
BTW - Here's some juice Michael let slip in the interview. He claimed that this was just the first digital asset ETF they intend to have in the U.S.
Ultimately they are looking at holding a "whole family" of digital asset ETFs in the future.
Nutty's Takeaway: Sounds to me like a spot Ethereum ETF will be coming in the not too distant future. 😉
ON CHAIN DATA DIVE 📊
38,112 Bitcoin were taken off exchanges yesterday. 🤯
Is there a supply shock coming? Let’s find out.
The Exchange Net Position Change is a super useful metric that allows us to peak inside the wallet’s of exchanges and see if more Bitcoin is coming in or going out. It’s calculated by simply adding up the amount of coins that entered exchanges and subtracting the amount of coins that left exchanges.
Here’s how to interpret the data:
Green bars: exchanges are experiencing more inflows than outflows. Can be a bearish indicator as investors deposit BTC on exchanges to sell 🐻
Red bars: exchanges are experiencing more outflows than inflows. Bullish indicator as BTC is transferred to cold wallets for accumulation 🐂
The other day we discussed the Bitcoin balance on exchanges in depth. In short, the balance on exchanges is currently at ~2.256 million Bitcoin and has been declining since March 2020.
This makes more sense when you look at the chart above… That’s a whole lot of red.
Ok that’s great and all but where is this Bitcoin going?
You guessed it. Straight into the hands of the HODLer’s
The Hodler Net Position Change is another super useful metric that tracks the net buying/selling activity of investors who have held their coins for six months or more.
Are you seeing all that green?
HODLer’s have been accumulating Bitcoin for the entirety of 2023. Plus we are approaching year high levels. The last time this chart was in the red (hodler’s selling) was back in December 2022.
Yesterday the net position change of HODLer’s was +55,247 BTC. Basically this means that long terms holders accumulated a whole lot of Bitcoin yesterday.
Nutty’s Takeaway: It’s clear that more and more Bitcoin is being withdrawn from exchanges. HODLer’s have also been increasing their stacks throughout the year.
All of this is pointing to one thing. A supply shock. ⚡
Investors are moving their coins to cold storage in anticipation of price surges.
Also don’t forget about the halving… And the ETF approvals…
Will there be enough supply to keep up with increased demand?
We don’t think so.
CRACKING CRYPTO 🥜
TRIVIA TIME ✍️
What is the maximum amount of Ethereum that can be created?
A) 58 million
B) 42 million
C) Unlimited
D) 12 million
Find out the answer at the bottom of this newsletter 😀
MEME CORNER 😂
Because what would the crypto world be without its share of memes?
Trivia Answer: C) Unlimited 🎉
There is no max supply of Ethereum. Technically an infinite amount of ETH could exist.
What did you think of today's Newsletter?
NUTCASE REVIEW OF THE DAY 🔍
DISCLAIMER: The content of this newsletter is not financial advice. This newsletter is strictly educational and is not investment advice. Please be careful and do your own research.