Grayscale Bitcoin Trust (GBTC) is one of the most popular ways for investors to gain exposure to the cryptocurrency market without having to buy or store bitcoins themselves. GBTC is a trust that holds bitcoins and issues shares that represent a fractional ownership of those bitcoins. GBTC shares trade on the over-the-counter market and can be bought and sold like any other stock.

GBTC has been outperforming many other stocks this year, especially those related to the technology sector. According to data from Yahoo Finance, GBTC has gained more than 220% year-to-date, while Nvidia (NVDA), a leading chipmaker and a major player in the crypto mining industry, has gained only about 70%. GBTC has also outperformed the S&P 500 index, which has risen about 23% in the same period.

NVIDIA’s stock has been on a remarkable rally since the beginning of 2022, reaching an all-time high of $502.66 on August 31, 2023. The stock has gained more than 300% in the past year, outperforming the S&P 500 index, which rose by about 25% in the same period. The stock’s impressive performance reflects NVIDIA’s strong revenue and earnings growth, as well as its expanding market share and leadership position in the GPU and AI segments. NVIDIA has also benefited from several positive catalysts.

One of the main drivers of GBTC’s impressive performance is the growing demand for bitcoin as an alternative asset class and a hedge against inflation. Bitcoin has surged to new all-time highs this year, reaching over $66,000 in October, as more institutional investors, corporations, and celebrities have embraced the digital currency. Bitcoin has also benefited from the anticipation of the launch of the first bitcoin exchange-traded fund (ETF) in the U.S., which could open the door for more mainstream adoption and liquidity.

However, GBTC is not without its challenges and risks. One of the biggest drawbacks of GBTC is that it trades at a significant premium or discount to its net asset value (NAV), which is the value of the underlying bitcoins held by the trust. This means that investors may pay more or less than the actual value of the bitcoins they own through GBTC. For example, as of October 26, GBTC was trading at a 16% discount to its NAV, meaning that investors were paying $44.77 for a share that was worth $53.34 in bitcoins.

Another challenge for GBTC is the competition from other crypto products and platforms, such as Coinbase (COIN), which is the largest U.S. crypto exchange and also offers exposure to various cryptocurrencies through its Coinbase Pro service. Coinbase has been growing rapidly this year, reporting a 27% increase in revenue and a 77% increase in verified users in the third quarter. Coinbase also has a lower fee structure than GBTC, which charges a 2% annual management fee.

NVIDIA’s financial results have been impressive in the past year, reflecting its strong sales growth across all its segments. In the second quarter of fiscal 2024 (ended July 31, 2023), NVIDIA reported revenue of $13.51 billion, up 101.48% year-over-year and beating analysts’ estimates of $12.55 billion. The company’s net income was $6.19 billion, up 843.29% year-over-year and surpassing analysts’ expectations of $5.41 billion. The company’s earnings per share (EPS) was $2.70, up 429.41% year-over-year and exceeding analysts’ projections of $2.34.

The company’s revenue growth was driven by strong demand for its GPUs and AI chips in gaming, data center, automotive, and professional visualization markets. The company’s gaming segment revenue was $6.76 billion, up 85% year-over-year, driven by the popularity of its GeForce RTX 30 series GPUs and GeForce NOW cloud gaming service. The company’s data center segment revenue was $4.63 billion, up 123% year-over-year, driven by the adoption of its Ampere architecture GPUs and BlueField DPUs for AI, cloud computing, and edge computing applications.

The company’s automotive segment revenue was $212 million, up 37% year-over-year, driven by the growth of its DRIVE platform for autonomous driving and infotainment systems. The company’s professional visualization segment revenue was $519 million, up 156% year-over-year, driven by the demand for its RTX A-series GPUs and Omniverse platform for content creation and collaboration.

Moreover, GBTC may face pressure from the potential launch of a bitcoin ETF, which could offer a more efficient and cost-effective way for investors to access the crypto market. A bitcoin ETF would track the price of bitcoin directly and trade on a regulated exchange, eliminating the premium or discount issue and reducing the fees and risks associated with holding bitcoins.

Several companies have filed applications for a bitcoin ETF with the Securities and Exchange Commission (SEC), but none have been approved yet. However, some analysts believe that a bitcoin ETF could be approved by early next year, following the successful launch of several bitcoin ETFs in Canada and Europe.

GBTC is a popular and convenient way for investors to gain exposure to the cryptocurrency market without having to deal with the complexities and challenges of buying and storing bitcoins themselves. GBTC has delivered impressive returns this year, beating many other tech stocks and indices, as bitcoin has soared to new highs amid growing demand and adoption.

However, GBTC also faces some significant challenges and risks, such as its premium or discount to NAV, its high fees, and its competition from other crypto products and platforms. Additionally, GBTC may lose some of its appeal if a bitcoin ETF is launched in the U.S., which could offer a more attractive alternative for crypto investors.

DTCC acquires Securrency to ‘fast-track’ DeFi effort as Joseph Lubin faces lawsuit over ConsenSys Stock Value

The Depository Trust & Clearing Corporation (DTCC), a leading provider of post-trade infrastructure services, announced today that it has acquired Securrency, a blockchain startup that offers a suite of tools and services for tokenizing and trading digital assets.

The acquisition is part of DTCC’s strategy to leverage distributed ledger technology (DLT) and smart contracts to enhance its existing offerings and create new solutions for the evolving financial markets. DTCC said that Securrency’s platform will enable it to “fast-track” its efforts to develop and deploy decentralized finance (DeFi) applications that can streamline and automate various aspects of the post-trade lifecycle, such as clearing, settlement, collateral management, and regulatory reporting.

Securrency, founded in 2015, is based in Washington, D.C. and Abu Dhabi. The company has developed a proprietary technology stack that combines blockchain-agnostic protocols, compliance frameworks, identity management systems, and liquidity solutions. Securrency claims that its platform can support any type of digital asset, including cryptocurrencies, stablecoins, security tokens, and tokenized traditional assets.

According to the press release, DTCC and Securrency have been collaborating since 2019 on several initiatives, such as testing the feasibility of tokenizing U.S. Treasury securities and exploring the use of DLT for cross-border payments. The acquisition will allow DTCC to integrate Securrency’s technology into its existing platforms and networks, as well as to co-create new products and services with its clients and partners.

Michael Bodson, President and CEO of DTCC, said: “We are excited to welcome Securrency to the DTCC family. This acquisition reflects our commitment to driving innovation and transformation in the post-trade space and to enhancing our capabilities to meet the evolving needs of our clients and the industry. Securrency has a proven track record of delivering cutting-edge solutions for tokenizing and trading digital assets, and we believe that their platform will enable us to fast-track our efforts to develop and deploy DeFi applications that can bring greater efficiency, transparency, and security to the post-trade process.”

Dan Doney, Co-Founder and CEO of Securrency, said: “We are thrilled to join forces with DTCC, a global leader in post-trade infrastructure services. We share a common vision of leveraging DLT and smart contracts to modernize and optimize the post-trade ecosystem and to unlock new opportunities for value creation across the financial markets. By combining our complementary strengths and expertise, we will be able to deliver innovative and impactful solutions that can benefit the entire industry and ultimately the end-users.”

Ethereum co-founder Joseph Lubin faces lawsuit over ConsenSys stock value.

Joseph Lubin, one of the co-founders of Ethereum and the founder of ConsenSys, a blockchain software company, is being sued by a former employee for allegedly misrepresenting the value of ConsenSys stock options.

The plaintiff, Daniel Novy, claims that he was hired by ConsenSys in 2018 as a senior software engineer and was granted 50,000 stock options as part of his compensation package. He says that he was told by Lubin and other executives that the stock options were worth $2.77 each, based on a valuation of ConsenSys at $1.65 billion.

However, Novy alleges that this valuation was inflated and misleading, and that Lubin knew or should have known that ConsenSys was not worth that much. He says that he discovered the true value of the stock options in 2020, when he tried to exercise them and was told that they were worth only $0.21 each, based on a valuation of ConsenSys at $125 million.

Novy claims that he suffered damages of more than $13 million as a result of Lubin’s fraud and breach of contract. He is seeking compensatory and punitive damages, as well as an injunction to prevent Lubin from further misrepresenting the value of ConsenSys stock options.

Lubin has not yet responded to the lawsuit, which was filed in the Supreme Court of New York on October 26, 2023. ConsenSys declined to comment on the matter, citing pending litigation.

The lawsuit comes at a time when ConsenSys is undergoing major changes in its structure and strategy. In August 2023, ConsenSys announced that it had split into two entities: ConsenSys Software Inc., which focuses on developing enterprise blockchain solutions, and ConsenSys Mesh, which operates as a venture studio and incubator for blockchain projects. Lubin remains the CEO of both entities.

ConsenSys is also one of the main supporters of Ethereum 2.0, the long-awaited upgrade to the Ethereum network that aims to improve its scalability, security and efficiency. Lubin has expressed optimism about the future of Ethereum and ConsenSys, despite the challenges and competition they face in the blockchain industry.