We gotta now hit Silver Gates bankruptcy or should I say their liquidation, the Bitcoin ETF and updates regarding that I'm going to talk a little bit about Peter Schiff's son. Yeah, and we're going to talk about Coinbase. What just happened with someone over at Coinbase? and what did it have to do with some potential theft going on at Coinbase? A little bit of a warning sign for those of you if you use Coinbase. So first things first.

hey, this video is brought to you by me. My courses on building your Wealth linked down below where you can learn everything from tax benefits to investing with an LLC or not using an LLC Insurances, how to negotiate with real estate agents and vendors and contractors, or even your boss build more wealth by understanding the perspective of what you're not taught in school. all linked down below: Extremely affordable prices and you can now use the Saint Patty's coupon linked below. A few days ago, we actually covered Silvergate Capital We pulled up the balance sheet for Silvergate and one of the things we complained about with Silvergate was the massive pain on their balance sheet.

I mean we showed that their total assets fell from about 15.4 billion dollars to 11.3 Not only that, but they totally removed any valuation of their intangibles, which was basically a sign that they were writing their brand down to nothing. Their total liabilities dropped as a well, but then again, the spread between their total liabilities and assets fell to less than 600 million dollars, whereas previously it sat at around double that. And a lot of this was due to the write down of really bad investments. In fact, a lot of people are saying hey, this is.

see here the losses. for example. This is what happens when you end up borrowing short, but lending long. you end up taking the L when interest rates change and you end up going bankrupt.

Loss on: Securities Loss on derivatives impairment of intangibles I mean Massive. Write Downs Here at Silvergate. Well, Silvergate has now announced that they plan to wind down operations and liquidate the entire Bank Remember, Silvergate was a Community Bank in California That was uh, that basically hopped on the crypto bandwagon and the idea was that hey, this was going to be a bank that would create on and off ramps 24, 7 for individuals drum Powell Somewhat kind of responded to this a disaster slightly by talking about how the Feds fed now system expected to be released later this year, which is sort of a replacement for ACH and Zell Uh, basically more instantaneous uh, transacting. There is still an intermediary, the FED, but more instantaneous payment between two different banks.

Uh, this was really what what Silvergate was trying to do for crypto by being an on and off ramp in an intermediary for crypto to get from dollars to crypto. Unfortunately, because of the lending they exposed themselves down to, they're now liquidating their Bank. Their shares fell another 50 percent. They do say they're going to be able to repay all of their deposits and this was a stock that was actually trading for up to 220 dollars in November of 2021..

it's now trading for somewhere around two dollars, which, uh, quick math is down over 99. Uh, this also does put more pressure on regulation for crypto, and it's not the good kind of Regulation I mean I Suppose regulation in general was always deemed to be something that was a hard pill to swallow, but something eventually crypto would have to go through. Uh, but uh. this does put more scrutiny from the SEC and certainly companies like FDIC on anybody who touches Crypto, because ultimately, who ends up having to bail out Banks who will, uh, can't fulfill their deposit requirements? well, the FDIC and and potentially the government.

So Silvergate's demise here is I Think a little bit of an L for the crypto industry following of course, the disaster that we've been uh seeing over the last year I still have I still have nervousness regarding Binance I Am very hopeful though, that once we get through this sort of flushing out of the excess, uh, there's a high likelihood that we end up getting to cleaner regulation and uh, and and less of this this nonsense. Uh, and that's exactly where I am actually paying attention to what's going on with the grayscale. Bitcoin Trust The grayscale Bitcoin Trust is basically kind of. It's It's a fund you have to be an accredited investor and you suffer.

Dare I say suffer. It's not that long. You have to sign up for at least a six month lockup if you want to invest in the Grayscale Bitcoin trust. And the goal is that the assets under management in the Grayscale Bitcoin trust will eventually be turned into an ETF which is an exchange traded fund.

Now, the difference between that is uh ETFs Generally don't trade for discount or premium. It's possible that they they slightly do, but that's more of a rounding error in my opinion than it is an actual discount or premium. ETFs Generally trade at what's known as net asset value. So let me give you an example: I'm an active ETF manager which is true I'm a licensed financial advisor.

But let's say that my ETF I'll just say has uh I don't know. Let's make it up. Okay, let's say it has exactly 20 million dollars in assets under management. Well then we have and and then let's say it.

It has I Don't know uh. shares worth one million dollars a share? Well, if we have 20 million dollars in assets under management, then there are 20 shares ETFs work very differently from the way stocks work because the number of shares that exist just aligns with how many people put money in. So if somebody comes along and says here's 20 million dollars, well then we just create 20 more shares. There's no like dilution, the shares just represent how much money is in it.

It's very different from a mutual fund or something like the Grayscale Bitcoin trust and very different from from actually stocks ETFs are are much uh, dare I say uh I I would I would call them preferred this I'm gonna I Want to be very clear? this is my opinion: I think ETFs are much more preferred because there is none of this sort of dilution or discount or premium or all of the Ridiculousness dilution of course, affecting stocks uh, specifically, uh, companies. uh And then of course these massive discounts or premiums affecting mutual funds. uh, or things like the Grayscale Bitcoin Trust grayscale Bitcoin Trust Right now A trades at about a 50 discount to the assets it actually has under management. So what that means is if you have a hundred dollars of Bitcoin in the grayscale Bitcoin Trust the the fund is actually trading for fifty dollars and the reason it's trading for that sort of discount is one regulatory risk and number two illiquidity.

And and it's basically the Grayscale Bitcoin trust trying to price in the market the free market is trying to price in. Well, what if Bitcoin Falls more right? Uh, and so uh, Grayscale is actually suing the SEC over the rejection of the opportunity to turn the Grayscale Bitcoin trust into an exchange traded fund I Actually think a Bitcoin ETF which companies like Arconfest have also filed for would be very brilliant I Think it would be a smart way and a safer, much much safer way for people to be exposed to crypto. Uh, the regulation over the storage of of crypto assets would be a substantially uh, more scrutiny based or in my opinion, safer for individual investors than individual investors having to worry about, you know Cold Storage versus uh exchanges. Then you have exchange risk.

then you have cold storage risk like losing your your coins. You know there's actually a joke on Reddit that the guy who lost like 400 million dollars of uh, crypto on a hard wallet because he threw away his laptop uh, there was a joke. It's a joke. but it was.

It's funny. well maybe not. But anyway, it was circulating that he spent two million dollars to basically dig up the dump where he threw away his laptop or where he thinks he threw away his laptop. and he finally found his hard wallet, was able to recover his coins only to realize that what he thought was 400 million dollars of Bitcoin was actually just Bitcoin cash and uh, he only had 400 000 of value after having gone into debt by two million dollars to actually recover this hard drive and now he's upside down 1.6 million dollars.

And anyway, the point of that is, that's a sad story. There's some humor in it, but it's to argue that it's not easy if you have your money on Exchange It's convenient, but uh, you know now you have exchange risk if you have your money on Cold Storage What if you lose it, you know and I know a lot of people are like, well, that's your problem. You should put it next to your gold bars and your guns. but again, you know it's it's there's risk whereas if you have an ETF I personally think it's the easiest way to have exposure to crypto.

but but you can't have that right now because the SEC doesn't want it anyway. the Grayscale Bitcoin Trust is suing uh, there's the potential that uh, the court right now is leaning towards actually vacating the rejection which would be fantastic for the grayscale Bitcoin trust because then it would go back to the SEC and the SEC would either have to approve the grayscale Bitcoin trust to turn into an ETF or uh, reject them again with with uh of potentially a different reason that they pull out of their butt. But personally, for crypto investors I think one of the best things that could happen would be Us ending up getting a crypto based ETF I Think it would be phenomenal for crypto, it would be a very, very bullish moment. I Did uh end up having dinner with Peter Schiff and his family yesterday I'll say a Peter Schiff's son is uh, super into Bitcoin Brilliant guy realized obviously I mean anybody could have known this, but both of them were very libertarian.

But government is nearly always bad. a smaller government is much better or potentially no government I mean our conversation ended up turning into the potential for the privatization of fire departments and blockchain-based arbitration of disputes, which is something that's been theorized for a very long time. The blockchain arbitration of disputes? Uh, One of the issues we ended up running into was what if somebody loses a dispute and doesn't pay and what if the assets that are now arbitrated through blockchain are actually real assets and and can't be traded like for example, a house or a car. Even though the title can be traded through blockchain you you the physical possession of it can't uh and so then we kind of.

the conversation briefly devolved into the idea of well, then who has the militia and they were joking like oh, is is the militia going to gonna start Department Are they going to start wearing uniforms? Should we call it a police department? So uh. Anyway, really, really fascinating discussions. So uh. anyway, it's very interesting to see Peter Schiff who's obviously very anti uh Bitcoin and then his son sort of take the opposite position of being very Pro Bitcoin but both of them being anti-government Uh, Anywho, so uh, you know.

Another thing that I thought was fascinating was that apparently a man uh, was hacked. A person named Jared Ferguson was hacked. uh on uh, having his money on Exchange with Coinbase. Allegedly, the individual uh hat was a a victim of being Sim swapped Sim swapped.

Let me say that correctly. Apparently Jared Ferguson is now suing Coinbase for over ninety six thousand dollars in losses because his phone was hacked. Uh Sim swapping is basically where somebody calls in your cell phone provider and ends up uh, requesting a new Sim because they allege that they lost their phone. They impersonate you and then they can use that phone to uh, basically they would need then your username uh, for let's say your Coinbase account, they reset the password for your Coinbase account.

Getting a confirmation text I would imagine they'd have to have some kind of access as well, then maybe to your email, but maybe not. I Mean, in theory, if you have somebody's login email and you Sim swap to get a code, you could just reset your password on the page, log in, and then transfer your crypto out. Jared is now suing Coinbase alleging that a Coinbase is violating the ET Uh or sorry the Electronic Funds Transfer Act protecting customer funds from electronic fund transfer fraud and violating article 4A of the California Uniform Commercial Code stating that if a bank authorizes an unauthorized order, it will get refunded or the individual will be refunded. However, Coinbase is not a bank and uh, doesn't uh fall under the same sort of Regulation as Banks do? Therefore, it's likely that unfortunately, Jared mate actually lose uh, that case.

so uh. This is leading of course to a lot of debate about uh, crypto security and of course a lot of people make the argument again in the crypto space. hey, not your keys, not your crypto. Uh, of course that's easy to say, but it is.

It is not the most convenient thing to have uh your your coins off exchange if you're trading them right? So I do I do empathize I can't empathize I haven't lost money to to one of these I I sympathize with Uh with people who end up losing uh money on on exchanges, especially uh, if there's there's hacking involved because you know you might want to be trading from uh, either uh, stable coins to actual crypto assets uh, like Bitcoin or Ethereum or otherwise. uh So anyway, long and short of that is if you can avoid exposure to Sim swapping via you know, putting putting additional security measures into your your phone account by maybe calling and uh, ask your ask your phone provider to to uh, set a code word onto your account. So if anybody ever calls in, they have to give a code word or you know, set up more security. Whether that's uh, don't use Sim authentication, use uh, use authenticator apps, you know and then back up your authenticator apps onto a different device in the event you do lose your your phone.

But anyway, a two-factor identification big deal here. uh I would uh I would highly encourage looking at that. A lot of people in the crypto Community obviously say hey, you should just never use two-factor identification on your phone. A lot of people actually calling for just straight up Banning two-factor identification uh through cell phones I I Kind of completely agree with that.

Anyway, overall it's it's worth taking. Also, a look at just sort of what's going on now. Uh Sim swap is a tool that makes a copy of your phone remotely. Yeah, I mean that's that's a I guess another way to put it I Mean it's it's.

really what it's doing is it's allowing text messages to go to somebody else's device, right? So I think that's that's obviously a a problem anyway. Bitcoin Right now, sitting at about twenty one thousand, uh, 625 dollars at the time of this recording, we have been trending down going into these Catalyst meetings here. not only the jobs report but also the CPI report. So uh uh, you know, big big problems.

All new phones are now E-sim Thankfully I Don't know that Esim actually makes a difference because somebody can activate an E-sim by calling in somewhere else. You don't actually need a physical uh SIM card anymore. you could get Esim So Esim actually hurts. uh, in my opinion, more so than uh Than Physical Uh, but anyway, someone here writes Cold Storage can have multiple backups of the same one.

You can get multiple uh, wallets. but yes, I'd rather hold half in a trust, right? I mean that's a very good point. It's like you could, you could. It's kind of like guns.

Okay, let's say you have 20 guns in your house. It's like you can find 20 different places to hide it, but it's still a pain in the ass, right? I Mean you could put guns in multi different properties in case one of them burns down or whatever. Uh, but. but you have to keep track of all of them.

You have to make sure they're safe and somebody else doesn't have access to them who's unauthorized who then has access to the combinations where you're hiding them all right? It's you know, how do you track it? It's it's a pain in the butt and there's just things to to think about. Uh, Anyway, that's sort of a little bit of a crypto discussion for all of us.