Grayscale Bitcoin Trust

Amy Castor's Welcome to Grayscale’s Hotel California is a fascinating account of one of the Alice-in-Wonderland market ecosystems that grew from cryptocurrencies:

Grayscale wants to convert its Grayscale Bitcoin Trust (GBTC) into a bitcoin ETF after flooding the market with shares. GBTC is trading 25% below its net asset value, and investors are rightfully pissed off. Grayscale wants them to be upset with the SEC, but the regulator isn’t really to blame. If anything, the SEC should have warned the public about GBTC years ago.

Below the fold, I provide some commentary:

Meta: Fifteen Years Of Pontification

Fifteen years ago today I posted Mass-market scholarly communication to start this blog. Five years ago today I posted A decade of blogging, and a couple of months later noticed it had exceeded one million page views. Now, the blog has accumulated:

• 812 posts, including my personal all-time favorite, 2014's Economies of Scale in Peer-to-Peer Networks.
• 4038 published comments.
• Over 3.4M page views, of which 367K (~11%) were of last February's short-notice EE380 Talk. Apart from that anomaly, it is an average of about 35K/month.
  

A Downside Of Privacy

Monero claims that:

Observers cannot decipher addresses trading monero, transaction amounts, address balances, or transaction histories.

This is all very well for individuals transacting with each other in the Monero ecosystem, but unless they are cryptojacking (mining using malware), miners need to pay bills for power and hardware in fiat currency. And miscreants using Monero to launder the loot need to convert Monero to fiat in order to buy the Lamborghini. So the Monero ecosystem needs exchanges, and thereby hangs a tale I pursue below the fold.

Ethereum Has Issues

I first wrote about the problem of bots front-running transactions a year and a half ago in The Order Flow, citing Dan Robinson and Georgios Konstantopoulos' Ethereum is a Dark Forest from August 2020 and samczsun's Escaping the Dark Forest. But I should have paid more attention. It turns out that front-running is the tip of an iceberg of fundamental problems that Ethereum and similar systems suffer. In replicating the functions of Wall Street they have replicated, and in some ways enhanced, its pathologies, Below the fold I survey these and related issues.

Cryptocurrency Weekend

It appears that this last weekend was "cryptocurrency weekend" for the mainstream media. The Washington Post and Bloomberg each had three big articles on the topic. Below the fold I comment on them.