There are some stupid human tricks worth knowing.

How to open a beer bottle with a lighter. How to bridge a deck of cards when you shuffle. How to summon a fire imp from the astral plane.

But when it comes to crypto, we want to learn all the tricks. Every scrap of knowledge is worth knowing, if it helps us trade better.

But Grayscale may just have the trick that will totally revamp how you buy Bitcoin.

Espresso Shots

☕️ New York vs. Crypto Firms

Letitia James, New York’s attorney general, is bringing a $1 billion fraud lawsuit against Digital Currency Group, Gemini, and Genesis for their role in the Gemini Earn program.

Gemini Earn, which promised low-risk with a high rate of return, has long been a source of contention. The program’s failure caused both an SEC lawsuit and an ongoing battle between Gemini and Genesis.

This latest lawsuit not only takes these firms to task for Gemini Earn, but for their blatant and potentially negligent exposure to contamination from Three Arrows Capital, Alameda, and FTX.

It seems like New York City has no problem getting its act together when it’s time to take crypto to court. Why, then, is it taking so long for my useless reporters to get me pictures of Spiderman?

☕️ Morgan Stanley Predicts Crypto Spring

Morgan Stanley feels that the crypto bear market may be almost over and we should be preparing for a push to a bullish spring, according to a Tuesday post from the asset manager.

Denny Galindo, an analyst at Morgan Stanley and author of the blog post, detailed what he calls “the four seasons of cryptocurrency,” using Bitcoin as an example. These seasons in no way coincide with actual seasons, but naturally have the same names.

Summer: When Bitcoin turns bullish after the halving.

Fall: When Bitcoin gains mass media interest and the current price surpasses the old, previous high.

Winter: Unfortunately, we’re all very familiar with crypto winter. This period is plagued by mass sell-offs and price drops.

Spring: When Bitcoin recovers from its lowest point and trends out of winter.

And if history is any indicator, the next halving event should be sometime in April 2024, finally catapulting us out of crypto winter and into spring.

But honest, crypto winter, summer, or fall, all you’ve got to do is call, and we’ll be there for you, Morgan Stanley, you’ve got a friend.

☕️ SBF Needs His Adderall

SBF’s defense team has filed a motion to get their client more Adderall.

Bankman-Fried has currently only been permitted to take the stimulant once, in the early morning before the trial, but that’s way below his regular dose, according to a court filing.

"Mr. Bankman-Fried has been doing his best to remain focused during the trial for the past two weeks, despite not having his prescribed dose of Adderall during trial hours," reads the filing. "However, as we approach the defense case and the critical decision of whether Mr. Bankman-Fried will testify, the defense has a growing concern that because of Mr. Bankman-Fried's lack of access to Adderall he has not been able to concentrate at the level he ordinarily would."

The defense is proposing that SBF receive a 12-hour extended-release Adderall for the remainder of the trial.

If Judge Kaplan denies the motion, SBF’s defense attorneys intend to ask for unlimited access to the judge’s Nespresso or maybe, like, a half gram of decent coke.

Polled Brew

Spilling the Beans

The Bitcoin Trick You Aren’t Supposed to Know 🫰 😉

We’ve always heard that you can stretch a dollar. It’s been a key advertising tenant in everything from discount grocery stores to fast food value menus.

But what about stretching your crypto?

That’s exactly the thinking behind Grayscale’s Bitcoin Trust (GBTC).

GBTC is a private trust for accredited investors. It allows investors to purchase shares in Bitcoin without directly investing in Bitcoin.

If this model sounds familiar, it’s because it’s not that radically different from the Exchange-Traded Fund (ETF) applications that have dominated the crypto news cycle.

The key difference is that ETFs are open funds, while GBTC is closer to a closed fund. In an open fund, shares can be created or redeemed based on market demand, which creates a more dynamic share issuance.

But why would you buy shares of Bitcoin when you can just buy Bitcoin?

Well, GBTC has a crucial feature that will sweeten the deal. They’ll sell you discount Bitcoin.

No, it’s not pre-used Bitcoin or a Bitcoin knockoff. By including a discount in the sale of shares of GBTC, Grayscale allows your purchase price to go further.

And back in December, when Grayscale was fighting with the SEC over the conversion of GBTC into an ETF, Grayscale could stretch your Bitcoin a lot further.

Back then, Grayscale could offer a 50% discount on GBTC shares. You’d be getting 1.5 Bitcoin for the price of a single Bitcoin.

But recently, that Grayscale discount has narrowed quite a bit. In fact, it’s down to about 16%. Why?

On one level, the entire crypto market, particularly those sectors associated with the spot ETF applications, is still recovering from the fallout of the fake Bitcoin ETF report.

That mis-tweet from Cointelegraph may be the most devastating piece of fake news since Orson Welles’ “War of the Worlds” broadcast made all those farmers shoot their shotguns into the sky.

That one tweet caused a flash crash short squeeze in which hundreds of millions worth of crypto was liquidated.

Cointelegraph has since issued an apology including a timeline and explanation of its mistake.

But that fumble isn’t the only reason that the GBTC discount is shrinking. There’s another factor, and it’s entirely natural.

As Grayscale Chief Legal Officer Craig Salm has pointed out, Bitcoin Spot ETFs are now a matter of when, not if.

Grayscale’s discounts are narrowing because of a mounting enthusiasm for these sorts of trusts. A fund can no longer offer 50% discounts when they’re far from the only game in town.

Rather, Grayscale is shifting its focus toward developing the infrastructure Grayscale will need as it transitions its GBTC to an ETF.

And when ETFs finally break through the SEC barrier, Grayscale may be one of the first and foremost as the firm currently holds an accelerated filing status.

Yes, usually we bemoan the long waiting period as we all anticipate that coming wave of Bitcoin ETF approvals.

But Grayscale’s margin for discount Bitcoin is rapidly shrinking and this may be one of your last opportunities to snag some extra Bitcoin shares at no additional cost.

And definitely go for Grayscale discount Bitcoin, not my cousin Seth’s discount Ethereum which he calls “Sethereum.” It’s not crypto. It’s just chocolate coins covered in spray paint.

Crypto 101

Yield Farming: This practice allows investors to place coins or tokens on a decentralized app.

Yield Farming provides liquidity, and much like staking, participators are incentivized with rewards.

The Last Sip

The Last Sip: In addition to their handy guide, Morgan Stanley is considering breaking down the Bitcoin lifecycle into a violin concerto. Tentative title: “The Four Crypto Seasons by Antonio Vivaldi.”

Stay Caffeinated,

Coffee & Crypto Team

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.