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Hey all 🚀 -

We’ve talked a lot about the impending Bitcoin ETF approvals - and how big of a deal they are for the crypto industry. But what if I told you there was already a way for to get exposure to crypto through the traditional markets? This would be the Grayscale crypto trusts… where the market dynamics are as volatile as a meme coin on a sugar rush.

Grayscale and Their Trusts 🤔

Who exactly is Grayscale, and what's the secret sauce behind these trusts?

• The Big Picture: Grayscale is a leading digital currency asset manager, offering investors the chance to dip their toes into the crypto world without the hassle of managing individual coins.

• Their Fame: Grayscale is renowned for creating investment products that track the price of cryptocurrencies. However, they don’t do this in real time, like an ETF would. This means the shares of the trust can trade at a premium or a discount when compared to the underlying cryptocurrency. Think of them as a bridge between the traditional financial world and the wild west of crypto.

🎁 Grayscale Trusts: Your Crypto Gift Basket

• Trusts Explained: Imagine a trust as a big basket holding a specific cryptocurrency (like Bitcoin or Ethereum). Investors can buy shares of this basket, which is easier than buying and securing the cryptocurrency directly.

• Why Trusts?: These trusts provide a regulated, stock-market-like way to invest in cryptocurrencies. They're especially appealing to those who are either not tech-savvy or prefer the familiarity of traditional investment methods.

🤹 Different Flavors

• Spot ETFs: Like a live concert, spot ETFs give you a 'spot' in the action, tracking the current price of an asset (like Bitcoin).

• Futures ETFs: These are more like betting on the future hits of a band. They deal with contracts that speculate on the future price of the asset.

• Grayscale Trusts: Unlike these ETFs, Grayscale's trusts are more like exclusive album releases. They hold the actual cryptocurrency, but you can't redeem your shares for the crypto directly.

💹 Discount or Premium: What Gives?

• A premium: Sometimes, the price of a trust's share is higher than the underlying cryptocurrency's value. This premium usually pops up when the demand for the shares outstrips the trust's actual value - like a limited-edition album becoming a collector's item.

• A Discount: Other times, shares might trade at a discount, meaning they're cheaper than the crypto they represent. This can happen when investor sentiment is low, regulatory hiccups occur, or simply because the market is as unpredictable as a DJ's playlist.

📉 Grayscale Bitcoin Trust (GBTC)

• The Big Picture: GBTC, with a whopping $14 billion market cap, had been trading at a growing discount to the value of its Bitcoin holdings. But recently, the discount is narrowing significantly.

• Why This Matters: When a trust like GBTC narrows its discount, it's like a beacon signaling increased investor confidence or a spike in demand for its shares. If this trend continues, and the discount vanishes like a ghost, investors could be looking at some juicy returns.

• Behind the Scenes: Unlike ETFs, which have a cool feature allowing them to keep their value in sync with the assets they hold, GBTC is a closed-end fund (CEF) - think of it as a vault packed with Bitcoin. Because it doesn't have this nifty arbitrage mechanism, its price can sometimes wander off from the value of its Bitcoin holdin​​e.

📈 Solana Trust (GSOL) & Chainlink Trust (GLNK)

• Solana Trust (GSOL): GSOL is currently strutting around with an eye-watering 869% premium over its underlying assets. This trust holds about 116,000 SOL tokens - and its share price has soared 653% since early September. This leap is partly thanks to a surge in institutional interest in crypto.

• Chainlink Trust (GLNK): Meanwhile, GLNK is flexing a large premium of its own. Each share, priced at $43, is triple the value of the actual LINK it holds. Historically, GLNK has traded at over 20% premium, but recent surges have pushed it to new heights, indicating strong institutional demand for Chainl​​​ink.

🤔 What's Driving These Dynamics?

• Investor Sentiment: The premium or discount on these trusts can be seen as a mood ring for investor sentiment. When confidence is high or demand spikes, premiums soar. This essentially means the underlying assets are undervauled by the trust holders. On the flip side, discounts can indicate skepticism or waning interest.

• Regulatory and Market Factors: External events, like regulatory decisions or market trends, can also sway these numbers. For example, SEC's hesitance to convert GBTC into an ETF led to its discount widening.

These premiums on the GSOL and GLINK trusts, as well as the narrowing of the discount on the GBTC trust, indicate that the bull market is back - and that Solana and Chainlink are deserving of our attention. Follow both closely over the next few years.

🚀 Solana: The Speedster

Solana is a layer-1 blockchain - a smart contract platform. They’re an Ethereum competitor, and one of the biggest. If you’re unfamilar with smart contracts and layer-1s, click HERE.

• High-Speed Goals: Solana is a blockchain platform gunning for high transaction speeds without tossing decentralization out the window. It's a bit like a sports car that promises both speed and comf​​ort.

• The Power of SOL: Solana’s native cryptocurrency, SOL, isn't just a digital coin. It's the fuel that powers the smart-contract-capable platform. Think of SOL as the energy drink that keeps the Solana ecosystem buzz​​ing.

🏎️ Solana vs. Ethereum

• A Speed Demon: Solana's claim to fame is its blazing-fast transaction speed. We're talking about processing around 50,000 transactions per second, leaving Ethereum's 15 transactions per second in the dust. It's like comparing a jet plane to a bicycle.

• Why Speed Matters: This lightning-fast pace helps keep congestion and transaction fees low on the network. Solana's dream? To rival centralized payment processors like Visa in terms of speed and effici​ency.

🔐 Proof of History

• Innovative Consensus: Solana uses a unique consensus mechanism called "proof of history," combined with proof of stake. This method helps synchronize time across the decentralized network efficiently, making it quicker and less cumbersome compared to traditional consensus mechanisms used by other blockchains like Bitcoin and Ethereum.

💻 Solana’s Applications

• A Versatile Platform: Just like Ethereum, Solana is a playground for a wide range of applications. From NFT marketplaces to decentralized finance (DeFi), games, and even decentralized lotteries, Solana's platform is capable of supporting various blockchain-based appli​​cations.

🗳️ Staking and Governance

• Participatory Network: In Solana, you can stake your SOL to become a validator, contributing to network security and earning rewards in return. Moreover, SOL doubles up as a governance token, giving holders a say in future upgrades and decisions within the Solana ecosystem.

What is Chainlink? 🌐🔗

• The Basics: Chainlink (LINK) is a decentralized protocol that plays a vital role in connecting non-blockchain entities to various blockchain platforms. It acts as middleware, linking blockchain-based smart contracts to external, real-world d​​ata.

• The Oracle Network: Launched in June 2017, Chainlink operates as a decentralized blockchain oracle network. Oracles in this context are external data providers that bridge blockchains to external networks, ensuring that the smart contracts on Chainlink receive and execute accurate data from sources like data feeds.

🧩 Solving a Key Blockchain Puzzle

• The Problem: Smart contracts, which self-execute when certain conditions are met, often rely on external data sources to function correctly. However, accessing this external data has been a challenge for blockchain technolo​​gy.

• Chainlink’s Solution: Enter Chainlink, which rewards its oracles, the data providers, for acting as intermediaries between external data sources and blockchain smart contracts. This system ensures the accuracy and reliability of the data fed into the smart contr​​acts.

💼 Real-World Applications and LINK Token

• Beyond Cryptocurrency: Chainlink extends its utility beyond being just a digital currency. It provides a solution to a fundamental limitation in blockchain technology, making it invaluable for a range of applications from finance to insurance.

• LINK Token: Chainlink has its own native cryptocurrency, LINK, used to incentivize its network operators. These operators fetch, format, and compute off-chain data, and are rewarded in LINK tokens for their ef​forts.

Chainlink and Solana are both innovative projects where the sky is the limit. Their technology and success combined with the premiums on their Grayscale trusts makes them coins to watch as the bull market takes off.

That’s all for today - we’ll see you again on Friday. Thank you for reading Make Crypto Simple and let’s have a great week!

Sincerely,

Chris Schawel


^{The content provided in this newsletter is for entertainment purposes only and should not be construed as financial advice. All information, including but not limited to market analysis, price predictions, and investment strategies, is purely speculative in nature. We strongly recommend conducting your own research and consulting with a qualified financial advisor before making any investment decisions. We are not responsible for any losses incurred as a result of the information presented in this newsletter.}