| Bitcoin | $19,167 | 7 day: +9.8% | | Ethereum | $606 | 7 day: +27.1% | | All crypto | $578b | 7 day: +16.3% | | Bitcoin dominance | 61.5% | 7 day: -4.3% | Prices as of 2:15 p.m. EST
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"This arbitrage spread drives everything else in bitcoin," writes Harris Kupperman, Founder of Praetorian Capital, regarding the lucrative arbitrage between bitcoin and Barry Silbert's Grayscale Bitcoin Trust (OTCQX:GBTC). - Writer's note: Even if you disagree, this post is a must-read by a hedge fund manager who has returned over 2,000% to his investors since 2003. The effect of GBTC on the price of bitcoin is paramount.
Conclusions: - Kupperman describes how institutional investors can, on an unlevered basis and after all fees, earn a staggering 40% annually in market-neutral arbitrage, i.e. without any exposure to the price of bitcoin itself.
- He concludes, "All ponzi schemes collapse under their own weight and this one will too, but first Bitcoin is going to have a supernova squeeze higher as the free float continues to be restricted as GBTC corners the market, driving the price higher."
- He notes that as long as demand for free-trading GBTC exceeds the supply of GBTC, there will be arbitrageurs who capture that spread and accelerate the process of GBTC cornering the market for bitcoin.
- He warns his readers, "The multi-year trend says that the spread will remain wide and force bitcoin higher. This arbitrage spread drives everything else in bitcoin."
Harris Kupperman 
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 Yi Gang, Governor of China's central bank Goldman Sachs reports that China's digital yuan could reach 1B "addressable users" and account for 15% of total consumption payments in 10 years. - Terminology: Chinese fiat has three interchangeable names: renminbi (RMB), Chinese yen (CNY), and yuan (¥). The People's Bank of China (PBoC) issues China's central bank digital currency (CBDC) called "digital yuan" or its preferred name, Digital Currency/Electronic Payment (abbreviated DC/EP or DCEP).
- Goldman Sachs (NYSE:GS) published a report on Nov. 17, 2020, forecasting that by 2030, China could attract 1B addressable DCEP users, issue $230B worth of DCEP, and process $2.7T in annual transactions.
- The 81-page report forecasts numerous fintech companies using DCEP as an alternative to conventional digital payment services.
Alibaba's Ant Group: - China's government is clearing the path for DCEP. Xi Jinping personally halted Ant Group's competitive IPO at the last minute.
- China processes $8T worth of mobile banking transactions per quarter.
- Alibaba's (9988.HK) Alipay controls 55% of China's mobile banking market. Tencent's WeChat accounts for 39%.
- According to Mu Changchun, head of the digital currency research institute within the People's Bank of China (PBoC), only authorized commercial banks will exchange DCEP for fiat, since DCEP is China's digitalization of legal tender.
Coindesk
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 SEC offices The U.S. Securities Exchange and Commission issued a no-action letter on Nov. 17 to IMVU, a digital avatar company, to sell its cryptocurrency. The SEC rarely issues no-action letters, and it is the highest level of safety that a digital asset issuer could obtain from the SEC prior to issuing a cryptocurrency. - IMVU would be the first company allowed by the SEC to sell tokens (VCOIN, trademarked in 2019), which users can readily convert back to fiat.
- The Legal Advisor of Division of Corporation Finance will not recommend an enforcement action against the VCOIN sale, provided that IMVU abides by eight conditions in the no-action letter.
- According to the request for the SEC's no-action letter, IMVU users cannot convert VCOINs on its platform directly and will need to pay 10-15% as a fee for conversion on a different platform. This disincentivizes its use as an investment.
- VCOIN, built on the Ethereum blockchain, can only be sold to users at a fixed rate, further disincentivizing use of VCOINs as investment vehicles.
- IMVU may also not use the sale proceeds to build the VCOIN network, and it must comply with various KYC and AML regulations.
SEC
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 Brad Garlinghouse Ripple Labs (XRP) CEO Brad Garlinghouse has voiced concerns about China's control of bitcoin in an interview with Bloomberg. - The Chinese Communist Party's strategy to dominate bitcoin mining is working, he said, with Chinese miners responsible for the majority of total bitcoin mining capacity.
- Garlinghouse said that the U.S. could lose this race like it lost the 5G race.
- He advised the U.S. to collaborate with the world's major economies to address China's dominance.
Ripple: - We have previously covered Ripple's lawsuits here.
- PayPal (NASDAQ:PYPL) recently listed bitcoin, Ethereum (ETH), Bitcoin Cash (BCH), and Litcoin (LTC).
- When asked for his views regarding PayPal (NASDAQ:PYPL) not choosing Ripple's XRP (XRP), Garlinghouse said that the U.S. regulatory environment does not acknowledge XRP like it does bitcoin.
- Ripple's CEO stated that many foreign regulators view XRP favorably but not in the U.S.
- Garlinghouse also spoke about relocating Ripple's headquarters outside the U.S. due to "unfavorable" regulations during the interview. We previously covered some of those issues here.
Bloomberg
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Copenhagen Business School has published a report on private cryptocurrencies in the Journal of Information Technology, with a focus on Monero (XMR). - The school's report studied the potential effects of banning privacy-centric cryptocurrencies, especially Monero (XMR).
- Researches at the Copenhagen Business School collaborated with the Applied Research and Innovation team of Trilateral Research.
- Privacy coins serve a different purpose than bitcoin and ether (ETH), hiding details of each transaction on an obscured ledger.
- Dr. Robin Renwick, a research analyst with Trilateral, stated that this report is different from previous studies because it focuses on the community members rather than technology, which are not well-researched.
CryptoBriefing
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 Gemini Co-Founders ClearBank will provide banking services to cryptocurrency exchange Gemini in the U.K. - With its newly acquired Electronic Money Institution (EMI) license from the U.K. Financial Conduct Authority (FCA), Gemini cryptocurrency exchange has selected ClearBank for U.K. banking services.
- The cloud-based bank will provide Gemini with account numbers, sort codes, and payment options - including CHAPS and Faster Payments.
- According to the ClearBank website, the clearing bank has offered services to cryptocurrency exchanges since 2018.
- Coinbase's U.K. subsidiary restored Faster Payments by replacing Barclays Plc (BARC.L) with ClearBank on Oct. 3, 2020, according to a Bloomberg report. ClearBank is also a participant in the Faster Payments system.
Finance Magnates
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QUICK HITS: - An algorithm that analyzes Twitter comments and invests in crypto is beating the S&P. *
- Global bitcoin mining equipment manufacturer Ebang International (NASDAQ:EBON) announced the pricing of a follow-on offering of 4M shares at $5.25 per unit. The placement agent is Univest Securities. Shares were trading at $5.19 as of the time of publication.
- CEO of SoftBank, Masayoshi Son, said during The New York Times' (NYSE:NYT) DealBook Conference that he does not understand bitcoin and has wasted a lot of his time tracking BTC price fluctuations. After investing 1% of personal assets into bitcoin (about $200M) as advised by his friend, the Japanese conglomerate's leader lost $130M on bitcoin during 2019. Son's net worth is $32.9B.
- Outgoing SEC Chairman Jay Clayton said on CNBC TV that the SEC sees bitcoin as a payment mechanism, not as a security, due to inefficiencies in current payment infrastructure. Chairman Clayton indicated that in the future the payment space will see more regulations.
- 11 Brazillian mayoral elections candidates partnered with Voto Legal to record campaign donations, transaction details, and timestamps onto Decred's (DCR) blockchain.
- On Nov. 19, 2020, Reuters reported that more than 30 major Japanese companies, including MUFG and SMBC, will start experimenting with a digital yen sandbox after the Bank of Japan announced the move to promote digitalization.
*This is a sponsored post.
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 |  | Written and curated by wide-eyed bitcoin watcher since $1, Aaron Wise. Streaming headline junkie, Associated Press fanboy, eye-strained news terminal watcher, 2017 founder of Cryptocurrency Newsfeed. Temporarily based in Florida while awaiting the construction of cryptopia. |  | | Editor | Alexander Huls is a Toronto-based journalist. He has contributed articles about true crime and pop culture to The New York Times, Men's Health, Popular Mechanics, and other fine publications. Follow him on Twitter @alxhuls. | |
