ROLLUP: Bitcoin Top? Ethereum's Existential Risk | Restaking Summer Updates | Tornado Cash Trial

Bit Bitcoin's down like uh over twenty percent, like twenty-five percent, something like that. Like people saying it's over. I mean, like, look, I am no trader and you you don't get trading advice on on bankless, at least not good advice uh generally. Like that's not why you're tuning in in uh every week. But like this one is so easy to freaking call it.

The answer to the question is is it over yet? Have we topped? The answer to that question, let me give it to you.

Bankless Nation, it is the last Friday of January and it is weekly roll-up time. We're gonna talk about a few things. Uh first though, not to sugarcoat this, Bitcoin is down on the week. Big. All right, well. We'll give you the numbers, but the question is is the bull market over? And I think to answer that, we gotta answer the question when will Grayscale's BTC ETF, the new Bitcoin ETF, when will it stop selling? It seems to be a source of the trouble here. What else we got?

Curse of uh the curse of Barry Silbert is still among us. After that, we're gonna talk about some more exciting things. We're gonna talk about restaking summer, what it is, what's going on, what are people doing, and why it's a big deal. And then we're also gonna talk about how 10% of Ethereum went down. 10% of the Ethereum network stock stopped producing blocks. Um, but the network as a whole, doing just fine. That's why we have multiple clients. But Ryan, have you ever thought about what if 80% of the network went down? Because a lot of people have been thinking about that later.

Only in my waking nightmares, David. That's the only time I ever think about that. Um, but I think we as a community have to think about it, so we'll talk about that. And also, the Tornado Cash developers, David, Roman and Alexi, they're getting ready for their trials. I think this is going to be an absolutely massive court case. So we'll give you an update on that. But David, before we get in, a little uh self-shill that we don't often do, and uh that is talking about bankless citizenship.

We've had a thousand new citizens sign up in the last week.

And you can go into in real life bankless events like the one that we're doing at ETH Denver. So this is a call to action for all bankless citizens if you are listening to this on the ad free premium feed. Wednesday, February 28th, mark your calendars. There is a link in the citizens Discord where we're all chatting and hanging out for you to come to our meetup at ETH Denver. This is only available to bankless citizens and previous podcast guests that I'm slipping the link to. And so if you want to go hang out, free beer, said brewery. Same brewery as last year. Free beer, free beer, free beer, free beer.

Uh we almost missed this as well. The the code to get a 10% discount

Yes.

is podcast 24. So you can go use that at bankless.comslash join. That's podcast twenty four. All right, David, let's get to the bad news, man. Markets, Bitcoin is down, and I think it's down in the double digits. Is that what you're about to tell me?

Uh no, that would be Ether. Bitcoin only down six point five percent this week.

Oh thank you.

Started the week at $42,000 and a half dollars, ending the week at $39,800. The big question, uh, why is it so down? Uh, I think the very simple answer was it was a sell the news event, but that answer actually can get more and more sophisticated. Um Grayscale, everyone's looking at Grayscale and Barry Silbert. So Grayscale sent over $1 billion of Bitcoin to Coinbase uh to dump. That's what you do when you send Bitcoin to Coinbase. Uh since the launch of the ETFs at large, since the GPTC trust was converted to an ETF, it's sent over over $3 billion of Bitcoin. Uh the the uh other Bitcoin ETFs, the uh the the BlackRock ones, Fidelity ones, the um the Bitwise ones, have absorbed a pretty good amount of Bitcoin. So there's been buying pressure from those, but it's hard to ignore the absolute gargantuan sell pressure that Grayscale has presented to the market. Um, Grayscale currently holds over half a million Bitcoins, that's $20 billion. Uh, people are just waking up to the 20%, uh the 1.5% fees that uh the GPTC is charging. But uh there's been speculation that there's actually not very much conversion from GPTC to other Bitcoin ETFs. Uh Nick Carter, I think, put out just like kind of an uh ad hoc number of like 20 to 30 percent conversions where other people are just selling. Um, selling to they're just trying to get out. They're finally recapitalized after the Bitcoin uh discount has been in the GPTC trust for so long that people are just hitting that sell button and they're getting out.

Yeah, you know how sometimes it's sell the news and it's just like that's the narrative? Well this is actual like outflows. This is actual selling of Bitcoin. That I think explains a lot of the what down six and a half percent this week and like last week, I think we were in the double digits down for Bitcoin, right? Yeah um about one billion peaked out

Picked out Bitcoin picked out at forty-nine thousand dollars and we are currently not thirty-nine thousand dollars, which you know, pretty big, pretty big fall off.

It's a it's a big explainer. This is Matt Hogan here that says this is not strictly speaking ETF-led sell-off. The ETFs are net buyers of Bitcoin. That includes Grayscale. This is an ETF expectations-led sell-off. The market frant front ran the ETF approval by piling to both spot Bitcoin and Bitcoin derivatives. It has now expected larger net uh flows into ETFs than we've gotten so far and is now unwinding that bet. Oh, that's that's what he's saying. There's a bit of an

There's a diversity of opinions about like what's going on here. Matt Matt is just saying the industry really uh placed bets on this being a massive buy the news event, and it was actually a sell the news event. Here's Van Spencer who says my two cent guess on GPT flows is that very little of the outflows have been recycled into new ETS. This was Vance prediction, maybe 20 or 30%. I would think Grayscale and FTX are probably sellers in the neighborhood of $1 billion each, not recycling. That is 50% of flows. So FTX, the FTX um treasury that is trying to source all the capital that they can, they didn't sell any of their GBTC up until now. Now that GBTC is an ETF, not a trust, now they are selling, which will eventually go into the pockets of FTX creditors.

You want you want to hear a silver lining here, David, if if that news got you down. Bankless listeners. Okay. The silver lining is this you know how they used to say that Litecoin is a silver to Bitcoin's gold?

Uh well, it turns out Bitcoin to gold.

Yeah, Bitcoin is silver to gold's gold. All right, here's what I mean. Bitcoin is now the second largest ETF commodity in the US. Just took that place. There used to be gold number one, right? In this former monetary unit, it still has uh you know consumption value as a as like a uh you know uh consumable type of asset, commodity asset. Silver is number two. Now Bitcoin is actually number two. So I'm sorry, silver. Gotta get out of the way.

By a lot too. Bitcoin the Bitcoin ETFs are coming in at twenty seven and a half billion dollars across the eleven ETFs that they have.

27 and a half billion?

Yeah. Yeah. Yeah. Yeah. Well, I mean you you take the grease the grayscale trust, which is twenty billion right now. Uh so it's starting to

It's no longer a trust. It's an ETF.

correct. Now it's an ETF. Yeah, with outflows.

But they had

they had years of doing that, is what you're saying.

Correct. Exactly. Yeah. They they started, it started from square one at $20 plus billion dollars. Um silver, so $27.5 billion in BTC trusts, number two. Uh silver, 11.5. So we're already almost like two and a half Xing uh silver across five ETFs.

Just out of curiosity, what's gold, David?

Uh gold, uh $95 billion. So Bitcoin is a second, very far distant second to gold. But we are so young in the Bitcoin ETF lifespan.

That is totally worth within striking distance. Yeah, that's within striking distance.

Gold had since uh in ETFs, since 2004.

Yeah, it's got a 20 year ahead start

Yeah, yeah. Plus, not just that, it's got thousands of years in history

as an asset. Yeah.

as an asset. I mean, how long has gold been in like we're already at 27? Like, we're in striking distance. That's pretty impressive. All right.

Well, striking distance 27, 96, these are different numbers. But I think, yeah, as soon as we can get rid of just this toxic selling of grayscale GPT Cod

A 3X for crypto? What's that? That's easy for us.

point, actually. Actually, we don't even need necessarily any more bitcoins to flow into the ETFs. You actually just need Bitcoin to triple.

Uh and so, like if we have half of what each, you know, yeah, that's easy. Yeah, gold, gold's done for.

Sell your gold, everyone.

Sell your gold.

Baby boomers, sell your gold. Switching Bitcoin. All right. Um, let's talk about the ETH price though. You said that was down uh in the double digit territory. And uh thanks to Kraken for these glorious uh charts, by the way. So we can

create how fast

ETH is down in high fidelity in modular charts

handles. Yeah. Look at those red.

candles.

It's it's it's kind of ugly, but it's beautiful uh when we when we view it like this as well. So what are we what are we at right now?

Yeah, so Ether down 13% on the week. Start of the week at 2500, ending the week at 2200. Uh, which of course means the ratio down six percent. Ratio touched 0.06. Now it's at 0.055. Um sad.

Um, did you know this though, David? On January 24th. Actually, you did know this because you mentioned this. On January 24th, we hit 2,000 over 2,700 ETH

in the Kraken charts.

Can you believe that?

Yeah, 2700. That was what

What were you doing on the on the on the 24th? Because I don't remember that. Usually I like

uh oh yeah, I was climbing mountains.

As soon as I got back from the mountains, we started dumping.

wait, what day is that?

Oh shoot, it's 2024. I said January uh 24th. That's why it was the 12th. That happened the 12th. So you're climbing mountains.

So I should have been paying attention.

I was climbing mountains when it was going up, and then when I came back, it started going down.