GM.

It’s Arsen, bringing you the 6th edition of TLDR - the newsletter that keeps you informed AND entertained.

First off, happy Sunday to 801 of you reading today.

Second, my underwear went viral on Twitter.

So if you’re new and came from that post, thanks for sticking around. I appreciate you.

Alright, let’s get into this week’s best stories.

Here’s what I got for you:

• Silvergate bank is in Trouble

• The SEC’s Gensler: If it’s Not Bitcoin, it’s a Security

• Chart of the Week: Bitcoiners Have Diamond Balls

Estimated read time: 4 minutes and 12 seconds

MAJOR CRYPTO BANK IN TROUBLE

Another week, another scandal. This time concerning Silvergate, a crypto-friendly bank that seems to be in a pickle.

Watergate.

Irangate.

Silvergate-gate…?

Anyways. It all started after the bank revealed it won’t be able to file its annual report with the SEC by the March 16th deadline.

The result?

Silvergate’s stock plummeted over 60% last Thursday (ouch).

So why is it dumping?

Because it failed the deadline, it now needs 2 extra weeks to assess the damage to its finances caused by the crypto crash of 2022.

Not only that, but it also needs to figure out if it can even continue operating in the next 12 months.

Most banks are conservative and want nothing to do with crypto.

*silvergate enters the chat*

Silvergate is one of two big banks that serve crypto service providers in the U.S.

If you’ve ever used Coinbase, Binance, or the now-bankrupt FTX, you’ve used Silvergate indirectly.

And why should I pay attention to this?

Here are some stats to help understand the severity of the situation:

• Silvergate handles over $11B in total assets

• They have +1,500 crypto service providers as clients

• They’re responsible for 80% of ALL funds flowing in and out of the crypto market

So yeah, you could say they’re in the big boy league.

An implosion of this size cannot be overstated. And as a result, Silvergate stock is currently the most shorted on the market.

But let’s rewind a bit: how did we get here?

Here are the deets:

• People withdrew $8.1B from Silvergate after its client FTX went bust in November

• To cover those withdrawals, the bank had to sell off debt at a $718M loss

• This revealed a $1B loss for Q4 and a $949M loss in 2022 in total, versus a $76M profit in 2021

• The bank had to take a loan from Federal Home Loan Banks (a U.S government-sponsored group of banks that supply lines of finance to troubled crypto companies)

• The DOJ is investigating Silvergate over its relationship with FTX and Alameda

• Silvergate’s own payment network (SEN) has been halted

• And now Silvergate stock is being shorted into oblivion

Silvergate is now that unpopular kid that nobody wants to eat lunch with.

Ex-clients such as Coinbase, Gemini, Circle, Galaxy Digital, and Crypto.com have already cut ties with the bank.

If I were a Silvergate customer, I’d be in a panic mode withdrawing my funds…

But it’s not all doom and gloom. There’s a valuable lesson here.

Bank run or not, nothing can happen to your bitcoin if you hold it in your own wallet.

Not your keys, not your coins.

GENSLER: EVERYTHING EXCEPT BITCOIN IS A SECURITY

It’s official now: the SEC views every crypto project as a security - everything except bitcoin.

Whether a cryptocurrency is a security or not has been debated for years. And everybody and their dog seem to have an opinion about it.

Of course, crypto is not exactly known for being an honest and transparent industry.

This is why many regulators (including Nate Dogg and Warren G) are looking at crypto with a magnifying glass, and the SEC is pressured to act.

In a recent interview with NY Mag, Uncle Gary said: “cryptos are securities because there’s a group in the middle, and the public is anticipating profits based on that group.”

In other words: if your returns depend on what other people do, it’s a security.

No, that doesn’t sound like crypto at all!

While there has been some foreplay with Gensler/SEC regarding this topic, this is the first time they have flat-out-called all cryptos securities.

Some people are mad because:

1. It will cost crypto projects lots of money and time if they are forced to register with the SEC. This could hurt innovation and mass adoption

2. They think the SEC is anti-crypto and wants to kill the space

What do I think?This is W for bitcoin. This is a reminder that bitcoin is different from the rest of crypto (I always have to wash after saying that word).

Altcoins are inherently centralized with single points of failure. Bitcoin is distributed and has no rulers.

I’m not the one to cheer for more regulation, but bitcoiners have warned about this for years.

Anyways, the next time the mETH-heads scream for “rEgUlaTorY cLaRiTy”, remind them of this:Bitcoin = not a security

Everything else = security

What’s not clear about this?

Bitcoin stands alone.

Crypto is dead.

Long live Bitcoin.

Enjoying the memes? Share TLDR with a bitcoiner

HODLERS KEEP ON HODLING

Of course, I have to end this week’s edition with a bullish AF bitcoin chart.

No, none of that boring TA talk.

Instead, take a look at this chart from Glassnode: ~2.6M Bitcoin has not moved in over 10 years.

If there is such a thing as ‘diamond hands’, then these OG hodlers have diamond BALLS.

Also, the chart shows that the bitcoin held on exchanges has been steadily decreasing since 2020.

What this means:

1. Bitcoin hodlers’ conviction is stronger than ever (or they really like boating)

2. People are moving their bitcoin from exchanges to self-custodial wallets, which have no counterparty risk

Whether this is caused by conviction or forced hodling because of the loss of private keys, this is bullish.

Every year, there’s less available supply on the market, and negative supply shocks tend to push the price up significantly.

Act accordingly, pleb.

But don’t forget to stay humble. I know, it will be hard…

Shoutout to @RD_btc for the meme.

Rabbit Hole Reads

• CRINGE WARNING: the opening ceremony for ETH Denver was a song making fun of Do Kwon, SBF, and Mashinsky (watch at your own risk)

• Oh, you sneaky! Stablecoin provider Tether set up bank accounts using fake documents

• How can I hire this guy? A german crypto bro tried avoiding taxes by claiming his $3.6M profits were a personal “data set”

This week in a meme

Job of the week

yo.

Our boy Jack Mallers is looking for an experienced marketing-oriented pleb to lead Strike’s growth efforts.

From the archive

Never let this die 🤣

Shoutouts

Shout out to @stakamoto21, who offered to proofread TLDR before it goes out to you.

What a chad.

That’s it for this one.

I’d like to hear what you think of this week’s edition.

Let me know in the comment section below or by responding to this email.

See you next Sunday,

Arsen

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