Bitcoin Forum

UPDATE: As of around 7 pm UK time on Friday 16 August, the initial tranche of shares has been allocated. We don't plan to release further tranches immediately, although we may do so in future should shares begin to trade at a premium to the most recently published NAV. (Please see the section "Subscriptions and Redemptions" for more details.)

The initial offering for BTC Growth will kick off on Thursday 15 August at 1 pm UK time. For reference, this is 8 am in New York and 8 pm in Beijing.

https://btct.co/security/BTC-GROWTH

For more information on the new offering, please see the exchange documents available at the URL above, or stop by the discussion thread here:

https://bitcointalk.org/index.php?topic=266828.0

Based upon demand, we'll set up an initial tranche and release additional tranches over the following few days if necessary to ensure that those who would like to participate have an opportunity to do so. Note that the offering price is 0.1 BTC, and there should be no need to pay a premium to that price during the offering. (Unlike an equity offering, where there might be disagreement about the value of the underlying assets, leading to some price discovery dynamics following the offering, this offering is for a fund and therefore represents nothing more than the raising of capital.)

If there are any questions specific to the initial offering itself, please fire away; I'll likely be out of the office on Wednesday, but I'll check back into this thread both later today and on Thursday in case anything comes up. For more general feedback on the fund itself, as distinct from the offering mechanics, please visit the original thread mentioned above.

looking forward

Hello mister Greg.

I was impressed with your articles about risks and hedging, and looking forward to invest in your hedge fund -as well as- discussing investment opportunities in general.

Those articles were good:
http://psychologicalinvestor.com/lib/real-markets/asymmetric-risk-145/
and
http://psychologicalinvestor.com/lib/real-markets/economics-bitcoin-mining-131/

I share those views very much, although with a minor twist regarding bitcoin mining stocks.

Anyway:
Are you willing to disclose your positions for example, once in a month ?

What about your own money ? Will you invest it with your investors in this same fund ?

Why hedge fund, why not "public hedge company" ? In the latter, the manager is the biggest shareholder and will share the fate with us, investors.

WARNING
[User "DrGregMulhauser" was registered only in "June 23, 2013"]
mister Greg: Please put some news update on your site, psychologicalinvestor.com, so I can believe you're the same guy who wrote the articles and the one who's advertising here about new fund.

-Technologov

Many thanks for your support.  :)


This is mentioned in the FAQ included on BTC-TC and also in the main discussion thread here on the forum.


This is also mentioned in the FAQ, and my identity has been verified by one of the exchange moderators; her note to the effect is included at the very top of the listing documents provided on BTC-TC.

For more general discussion, as distinct from questions regarding the mechanics of the initial offering on Thursday, please drop by the main discussion thread.

Many thanks for your support; it won't be long now.  :)

You'll have a drop a note on your website, http://psychologicalinvestor.com/ so people can believe it is really you.
You're account in this forum is too new, and lacks trust for an IPO. (which would put on hold my investment plan)

Please read the FAQ: I have no intention of attempting to prove anything to anybody except for demonstrating my identity to forum admins or exchange moderators on request, which I have already done.

If you do not trust the exchange moderator who verified my identity, then you should not participate in the fund.

how many shares do you want to sell? i only see "a minimum of 2500 shares", but what is maximun, and what's the plan?. i know you must have explained in your documents, but can you simply give a direct clear answer? thank you

1. The user "Dr Greg Mulhauser" is confirmed to be the real one, the operator of the site.
1.a "If you do not trust the exchange moderator"...
Of course I do not trust. Why should I ?
2. I prefer "hedge company" vs. "hedge fund", so that the manager invests his own money with us, small investors
The reason is: risk sharing. The "boss" aka "manager" aka "general partner" should risk his own ass (personal equity).
3. Fees: 2%(base)+20% (from profits) is way too high IMO. I guess I would skip this opportunity.

I guess (much) lower fees and the fact that the manager puts his own money down on the table will push me to invest.
(This is the reason I never invest in any type of funds to begin with... only in stock companies, except if required by law, such as pension fund)

definitely!

For folks who didn't notice, please be aware there is a separate discussion thread for general questions or comments about the fund. This thread is intended to be solely for information about the mechanics of Thursday 15 August.

There is also a detailed listing document on the exchange itself; if you have a question or a comment to make, please be considerate to other users and read the document first to see if your question is answered there or to see if your comment coheres with the facts of how the fund is organised.

Last but not least, as I mentioned earlier, I will be out of the office today.

what is the link to the separate discussion

This is pretty standard in hedge fund land, but hedge funds haven't been getting this since 2007

the risk sharing model has been more attractive, where the manager only profits when the fund's positions profit

there hasn't been a single fund in bitcoin land that has demonstrated massive returns, and in the securities market, things have been too illiquid for a fund of massive size to replicate the returns of the securities there

https://bitcointalk.org/index.php?topic=266828.0

so we doing this? it is 1pm UK now, lets go! unlock it

You posted that just as I was watching the sales happen lol

We're now underway!  :)

Many thanks to all those who have already begun participating; somewhere around 4500 shares have traded hands within the first 5 minutes.

almost half sold in the first half hour. woah.

Had my order in yesterday. I just wish I had more bitcoin to invest at the moment, I'm extremely impressed with this fund and I am excited for the future. Good luck, Dr. Mulhauser!

Will the tranches released after the IPO be at .1 btc or higher?

Should be a little bit higher to make "early birds" happy.

I'm pretty sure they're going to be at .1 because he phrased it like so all the people who wanted to get in on the IPO could do so, which I think would mean at the IPO price.

Will how fast they sell out determine whether or not another tranche is necessary?

During the IPO itself, the only sell orders entered directly from the fund will be at .1 BTC; I'll release more during the next day or two at the same price should the first tranche be exhausted.

The section of the listing document headed "Subscriptions and Redemptions" explains how purchases and sales will be handled subsequent to the IPO, at a discount/premium to NAV, respectively.

Many thanks for your support -- I appreciate it!

Aaaaand 600+ for sale under the asking already! Someone make a bad buy?

You have to understand that there is too much con-artists borrowing the identity of respectable persons to conduct scams. It's fine if you don't wish to provide your ID, but having a forum/exchange mod confirm it would be necessary. Copying a website layout is easy, so is claiming to be someone or that someone verified you. Hence why people ask for more.

As a side note for anyone who didn't look it up, mulhauset.net/psychologicalinvestor.com and btcgrowth.com are all hosted on the same IP and have the same nameservers provider
mulhauser.net IP: 199.38.86.49 (Nameservers: dnsmadeeasy.com)
psychologicalinvestor.com IP: 199.38.86.49 (Nameservers: dnsmadeeasy.com)
btcgrowth.com IP: 199.38.86.49 (Nameservers: dnsmadeeasy.com)

Look at the "Moderator Votes" section at https://btct.co/security/BTC-GROWTH

Moderators are merely people holding 10 shares of the exchange, which qualifies them to vote on assets. Current cost of 10 shares: 3400 LTC or 86.088 BTC
BTCT.co moderators are in no way official/trusted by the exchange. They are merely shareholders of the exchange.

The host IP being the same for btcgrowth.com as the other websites is the best proof of identity available currently, as far as I'm concerned.

My point about demonstrating my identity to the exchange or to forum admins was merely that I do not wish to respond to a potential mass of up to 130,000 separate requests from every user on the forum who wants to know whether it's really me because they don't want to take anyone else's word for it. I'm happy to do it a few times as required to establish that it's really me here on the forum, or really me on the exchange, but ad hoc arrangements for each individual who asks? Definitely not.

The only barrier to entry in becoming a moderator is capital.  The moderators have not been chosen because they are any more trustworthy than any other individuals.  It's a bought position, and this should be kept in mind whenever someone attempts to use moderator status to lend legitimacy to any 'proof' they raise.  Namworld's investigation to find that the BTCGrowth website is hosted on the same IP and utilizes the same service providers is more proof of identity than the word of an exchange moderator.  Now, if it was the exchange administrator , burnside, who had instead verified his identity, then I'd have accepted this, or some confirmation posting on the long-standing blog for the man instead of a newly created website.

You can ask John K. as far as trust goes he's the most trusted person IMO.

https://bitcointalk.org/index.php?action=profile;u=31288

He does escrow for us but I'd trust him to verify your identity.

I understand that some folks don't trust the woman who runs Ciphermine to have been diligent in her verification of my identity on BTC-TC -- she is easily verified as the moderator who left the note to that effect at the top of the listing documents -- but they would trust an indication on Mulhauser.net that BTCGrowth.com is run by the same person. I have now updated the front page of Mulhauser.net to include a link to BTCGrowth.com.

If anyone believes that I am not in control of my own server -- for example, that a web admin of some sort is posing as me without my knowledge -- please check the site CodedMemes.com for historical posts about when the server was originally set up, by me.

I really dont seem to see it, can you say exactly how many shares will be issued at .1?  You say there are more batches coming yes?

I read the details on your IPO, and its very well written.  So well written that alot of it goes over my head.  :-*

Wondering the same!

Ha, I had to read it 3 times... Obviously we're not that bright.
If I understand correctly, there is not "limit" of available shares (well, 1.000.000 but @ 0.1BTC they won't be sold in the foreseeable future - and they are not meant to).
There should always be available shares, and once a month DrGregMulhauser would be adjusting the sell price depending on how well (or how bad) the investments went.
As for dividends, he uses the 'two and twenty' structure explained under Management and Performance Fees


I think I more or less understand, but didn't really do my homework as I m not investing (for now) in this IPO.

DrGregMulhauser, could you maybe give us an example? let's say, you were to sell 10.000 shares and get 1000BTC. You would then invest these and get 10% profit in the first month. What would then happen regarding the share prices you are offering? and dividends?

(Sorry if I misunderstood and gave a false explanation. Don't take my word on this)

Yes, if necessary I can release further shares at .1 BTC so that folks who would like to participate will have an opportunity to do so. But I cannot say exactly how many shares will be issued at .1 BTC, as I don't know yet know what demand will be. Judging by the activity so far today, I would guess that the initial tranche will be sufficient, although I might wake up tomorrow and see differently.

I certainly didn't mean to make this confusing, so let me take a different stab at clarifying. Since we're not selling equity in an existing business but are instead raising capital that will be invested, the initial number of shares and the initial price per share don't make much difference to anything. Just for the sake of argument, if we had provided 100 shares at a price of 1000 BTC each, the net asset value per share at the end of the exercise would have been approximately 1000 BTC (less .2% for the fees the exchange charges to sell them). If we released another 100 shares at a price of 1000 BTC each, the net asset value per share would still be approximately 1000 BTC. The same holds true regardless of the number of shares and regardless of the price per share: make it a zillion shares at .000001 each, or whatever you like, but however you blend the numbers, the net asset value per share at the end is always going to equal (almost) the original offering price.

Later on, when the net asset value of the shares changes, due to changes in the fund's underlying holdings, it is possible that shares will trade at a premium or a discount to net asset value. As explained in the section on subscriptions and redemptions, if the former happens, we can release additional shares at slightly above NAV to meet demand, and if the latter happens, we can re-absorb shares at a slight discount to NAV to provide additional liquidity for people who would like to exit their position. This keeps future subscriptions and redemptions so they have a neutral to slightly positive effect on NAV per share, ensuring that existing participants' interest is not diluted.

Are the dividends divided by outstanding shares or 1 million?

I believe it is self-evident that it will be divided by outstanding shares as it is not a sale of rights to profit in a company but a fund.

Edit: Apparently there simply isn't any dividends.

Guess I need to research what this NAV thing means.  :-\

http://en.m.wikipedia.org/wiki/Net_asset_value :]

Yes, the fund focuses on capital growth, not current income. (For folks especially interested in this, there's a brief note in the fund's main discussion thread about fixating on dividends at the cost of total return: it is, after all, trivially easy to pay a large dividend simply by destroying book value.)

The point about shares outstanding is important -- even if we're not talking specifically about dividends. As per the section headed "Capital Structure and Voting Rights", it's the number of shares outstanding that matters for calculation of net asset value per share.

During the first 24 hours of the initial offering which began Thursday at 1 pm, the BTC Growth fund reached around 1800 BTC in capitalisation.

It looks like the initial tranche of shares is sufficient to satisfy demand, as the capitalisation is now creeping upward only a little at a time. If any shares remain in the initial offering tranche as of Saturday morning (UK time), I'll plan to cancel that open ask order so as to enable any current participants who wish to exit their position to do so without that lingering ask in place.

To clarify, the NAV per share of the fund immediately subsequent to the initial offering is .1 BTC minus the .2% fee which the exchange charges to distribute them, or .0998 BTC. That NAV per share will not be affected by any further distribution of shares from the initial tranche, since each new share taken up would add exactly the same amount of capital to the fund.

So this means we instantly lose 2% of our investment?

The value of each share is determined by the value of the fund. How will you update the current value? Via the website perhaps?

This essentially gives you 100% control over the share value. If you say each share is now worth 0.5 then who are the shareholders to argue.

How long until the fund will increase enough to cover this instant 2% loss. Also are you paying yourself a wage from the fund? Meaning that if the fund maintains its base value we will lose value due to your wages?

Thanks for clarifying.

No, this means the fund instantly loses 0.2% -- not 2% -- from capital received. The exchange does not conduct transactions for free; that means it is not possible to issue shares and receive exactly the same amount as participants pay for them.

As indicated in the fund's listing documents, potential participants should ensure that they are familiar with the rules of the exchange; this includes being aware that the exchange levies charges on transactions.

Note that we are talking about a sum total of 3.6 BTC out of 1800 BTC (1800 times 0.002 = 3.6).


Please see the listing documents for full details. Please do not participate in the fund without reading the listing documents.

For more discussion on the basics of the fund, you're very welcome to stop by the main discussion thread for the fund (linked from the OP); this thread is intended to be about the mechanics of the initial offering.

As of a few minutes ago, the final shares from the initial tranche have been allocated. It took around 30 hours for the 20,000 shares to go.

Because only a relatively very small proportion of that activity took place during today's business day (UK time), however, I believe the initial demand for the fund has been adequately met, and therefore we won't plan to release any further tranches at this time. As described in the fund's listing documents, however, we may do so in future, should the fund begin to trade at a premium to the most recently published NAV.

Many thanks to all who participated!

How's it going DrGreg?

Doubled our money yet  ???  8)  ;D

Updates will be posted in due course over at the main thread:

https://bitcointalk.org/index.php?topic=266828.0