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Onchain Analysis Verifies the Number of BTC Held by Grayscale’s Bitcoin Trust – Bitcoin News

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After Grayscale Investments shared information concerning the company’s product holdings, people questioned why the firm wouldn’t share the public addresses associated with the crypto assets it holds. However, on Nov. 23, OXT researcher Ergo published a Twitter thread featuring onchain forensics that confirm Coinbase Custody holds a balance of 633K bitcoin that likely belongs to the Grayscale Bitcoin Trust (GBTC).

OXT Researcher Verifies Grayscale’s Bitcoin Holdings

Five days ago, Bitcoin.com News reported on Grayscale disclosing information tied to the safety and security of the company’s digital assets. Grayscale’s statements were meant to assure the public that the company’s cryptocurrencies are “safe and secure” after the FTX collapse.

The digital asset fund manager detailed that all of the company’s digital assets are stored with Coinbase Custody Trust Company. On the Grayscale website, the firm says Coinbase Custody is a qualified custodian under New York banking laws and the funds are kept in “cold storage.”

The one thing Grayscale did not disclose is the company’s digital asset addresses and it did mention why it chose not to share the wallets. Grayscale explained that it has never publicly disclosed onchain addresses to the general public “due to security concerns.” The claim was criticized and mocked, but Grayscale said that it understood the non-disclosure would be “a disappointment to some.”

Despite Grayscale’s non-disclosure, the OXT researcher (oxt.me) Ergo explained that it started a community-led effort to create transparency around GBTC holdings. “We have taken steps to ID likely GBTC addresses and balances based on public info and blockchain forensics,” Ergo said on Nov. 20.

Onchain Analysis Verifies the Number of BTC Held by Grayscale’s Bitcoin Trust
Ergo said the team of researchers “scanned the blockchain,” leveraged heuristics, and connected publicly known bitcoin addresses.

Leveraging an article from Coindesk, heuristics, and publicly known bitcoin addresses associated with the custodian Xapo, that day, Ergo “attributed 432 addresses holding 317,705 BTC to likely GBTC custody activity.”

The researcher discovered at least 50% of the GBTC holdings and added: “additional work is necessary to ID the remaining addresses.” By 2:49 p.m. (ET) on Nov. 23, Ergo said the additional work was finished in a Twitter thread called: “The Grayscale G(BTC) Coins Part 2” Ergo tweeted:

In this analysis, we use additional [onchain] forensics to CONFIRM the approximate 633K BTC balance held by G(BTC) at Coinbase Custody.

Ergo’s summary notes that after discovering the first 50% of bitcoins associated with Grayscale’s BTC, the team had to ‘scan the blockchain’ for additional addresses fitting the profile of those found in Part 1.

Onchain Analysis Verifies the Number of BTC Held by Grayscale’s Bitcoin Trust

Ergo further leaves independent analysts with information on the heuristics used and the bitcoin addresses compiled for the search. “Obviously no heuristic or set of heuristics are perfect, and this analysis certainly includes false positives and negatives,” Ergo remarked. “But our result is almost identical to the G(BTC) self-reported holdings.”

In the Twitter thread, Ergo says that it doesn’t know why Grayscale decided not to share the company’s BTC addresses. Ergo said the team originally thought Coinbase Custody may have a non-disclosure policy. But after reading some information published by Coinbase, Ergo said “it seems clear that Coinbase Custody is willing to disclose addresses.”

A number of people complimented Ergo’s Twitter thread and analysis of the GBTC coins. Furthermore, the news follows Coinbase CEO Brian Armstrong explaining that as of Sept. 30, Coinbase holds 2 million bitcoin.

Tags in this story
633K bitcoin, 633K BTC, addresses, Bitcoin (BTC), BTC, BTC addresses, BTC Cache, BTC Stash, BTC wallets, custodian, Digital Assets, Ergo, Ergo BTC, false positives and negatives, fund manager, GBTC, GBTC holdings, grayscale, Grayscale Investments, heuristics, Onchain analysis, Onchain Research, OXT, OXT researcher, oxt.me, oxt.me data, publicly known bitcoin addresses, Xapo

What do you think about Ergo’s onchain analysis of GBTC’s bitcoin horde? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.




Image Credits: Shutterstock, Pixabay, Wiki Commons, Ergo BTC, Grayscale logo,

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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This Historic Bitcoin On-Chain Support Level Is Still Not Lost

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On-chain data shows the historical 20-Day MA Bitcoin aSOPR support level has continued to hold so far.

Bitcoin 20-Day MA aSOPR Rebounds Off Historical Support Line

As pointed out by an analyst in a CryptoQuant post, the BTC aSOPR recently retested its 8-year old support.

The “Spent Output Profit Ratio” (or SOPR in short) is an indicator that tells us whether the average Bitcoin investor is selling at a profit or at a loss right now.

When the value of this metric is greater than 1, it means the overall market is moving coins at some profit currently.

On the other hand, values of the indicator less than the threshold suggest holders as a whole are realizing some loss with their selling at the moment.

Naturally, SOPR values exactly equal to 1 imply the investors are just breaking even on their investment right now.

“Adjusted SOPR” (aSOPR) is a modified version of this metric that excludes from the data any selling of coins that was done within 1 hour of first acquiring said coins.

Here is a chart that shows the trend in the 20-day moving average Bitcoin aSOPR over the last several years:

Looks like the 20-day MA value of the metric has sharply declined in recent days | Source: CryptoQuant

As you can see in the above graph, the 20-day MA aSOPR rapidly went down following the FTX crash, and touched a low of 0.93 just a week or so ago.

This level was the same as the one seen during the lows of the previous bear markets, and each of the touches in those bears launched the metric back up.

The support line has now been active since 2014, and in the 8 years so far the indicator has never seen any actual dip below it.

Since the retest of this support level a week ago, the metric has already bounced back up, suggesting that this important support line is still holding right now.

However, it’s uncertain whether this successful retest means the bottom is now in. Back In the 2018/19 bear, it was indeed the case, but in 2014/15 it took two touches of the line before the real bottom formed.

BTC Price

At the time of writing, Bitcoin’s price floats around $16.8k, up 3% in the last week. Over the past month, the crypto has lost 18% in value.

The below chart shows the trend in the BTC price over the last five days.

Bitcoin Price Chart

The value of the crypto seems to have been moving sideways since the surge | Source: BTCUSD on TradingView
Featured image from André François McKenzie on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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NFT Steez and Victor Solomon chat about building in Web3 and the Metaverse

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On Dec. 2, NFT Steez hosts Alyssa Expósito and Ray Salmond chatted with Victor Solomon to discuss his journey into bridging his in-real-life artwork into NFTs and how he cultivates the community and culture that surrounds it. 

Solomon’s work centers around basketball, not just the object, but the sport itself. For Solomon, the inspiration for his work comes from his early childhood of wanting to play hockey, a sport that was not accessible for him, and his eventual discovery of basketball which he discovered to be more accommodating.

Solomon said:

“Basketball was such an inspirational platform for me since there’s no barrier to entry.”

Solomon says that the open nature of basketball is an “incredible parallel for everything that’s happening in Web3” and throughout the episode he explains the symbiotic relationship he has experienced in building out VesselVerse, the basketball of the Metaverse.

Bridging the gap between real life and digital spaces

When asked about the liberating elements of creating and iterating in Web3, Solomon drew attention to the “invigorating” nature of being able to create things that cannot exist in real life, like a “planet inside a hollow basketball,” but also the process of taking the physical elements into digital renderings and composites. 

For Solomon, building a collection and a community to rally around it was second nature. His extensive experience in the traditional art world gave him the same insight and structure on how he releases digital collectibles.

Drawing inspiration from other NFT projects like Nouns, Solomon’s digital collection, VesselVerse operates similarly to his real life pieces, except one “vessel,” or basketball is auctioned off every hour.

Contrary to physical installations or show pieces in a gallery, Solomon noted that creating within Web3 offers participants and collectors a broader and larger say in the direction of the work rather than a one-off experience.

Related: Comic-Con guru explains why storytelling is the key component for successful NFT projects

Unlocking collaboration within a community

When it comes to Web3 and the Metaverse, a core tenet in a successful project or ecosystem is the community surrounding it and building alongside it. Solomon described how “exciting it is to be able to work shoulder to shoulder alongside a growing community,” where diverse collectors enable an “open forum to constantly visit, discuss and consider the direction of the project.”

Rather than shying away from opening up considerations to the community, Solomon embraces the more decentralized aspects of building and unlocking community in Web3. Solomon said:

“What attracts me as a founder is unlocking that opportunity for everyone to be able to have a voice.”

For Solomon, the juxtaposition of Web2 and Web3 has highlighted what he considers a “massive unlock.” As he describes, the collaborative nature and “community spirit” has not been something he has been able to experience in his physical work and is “energizing.”

The biggest challenge Solomon currently faces is re-educating a segment of the ecosystem that may have had bad experiences in the crypto and NFT market. Nonetheless, Solomon suggests that the adversity is worth enduring since the promise of Web3 is much bigger than any particular negative experience.

To hear more from the conversation, tune in and listen to the full episode of NFT Steez and make sure to mark your calendar for the next episode on Dec. 16 at 12 pm ET.