Bitcoin Forum

https://i.imgur.com/AgEdFCB.png


there you have it  ;D

Where are you getting this from? Any idea where this will even be listed? It'd be a huge advantage to be able to purchase BTC from my IRA, I could quite literally quadruple my BTC holdings if I could buy from there.

Great. Just in time for a mega crash.

also this http://www.sec.gov/Archives/edgar/data/1579346/000119312513393903/0001193125-13-393903-index.htm

If this Winklevoss trust goes live, that will be huuuuuuuuuuuuuuuuuuuuuuuuuge.

I've never even got a real legitimate answer from anyone as to how long ETFs typically take to register. I know stocks typically take something in the neighborhood of about 100 days for an IPO, just for SEC filing. How about ETFs?

what are the implications of this

Pump & dump

Or more accurately, space rocket & diarrhea

Agreed. Very significant news.

Is this the big news the in the know people were talking about? Seems huge.

does this actually mean that the Winklevii can take people's money and invest in btc now? Didn't they need congress or some government agency to accept their proposal? Fucking stupid if that happened

I guess the latest rally maybe caused by some kind of insider who know there is a green light from government incoming

this will be the beginning of a long lasting friendship

Someone please explain this to me, because I clearly don't get it -

How can an actual pump-and-dump scheme be possible on BTC?

If a trust is pumped with $$$ therefore pumping up BTC, what happens when everyone sells? Fund still has same amount of $$$, so only early jumpers actually get to see their gains, and rest are left dry.

Why would _anyone_ try to pump-and-dump given then when the dump arrives, there's a high chance of the money simply vanishing into thin air?

I think they are saying the Wrinklevoss are pumping the price up so they can sell. those who buy into the trust.. well, too bad

Because no one need to sell. First they could mortgage them to get a loan to spend, and in the case FED is tightening, they could just spend bitcoin directly :D

Look at it the other way: How can an actual pump and dump scheme be possible on USD?

Now USD value has been pumped up so high (they should worth nothing because it cost nothing to make, FED is still printing 85 billions per month), what happens when everyone dump their USD?

A few lucky guys already dumped their USD in exchange for BTC, but the major dump has not started yet, when that happens, the BTC supply will dry out quickly and USD priced in BTC will be close to zero

For Canadians, if I understand this correctively, this opens an investment in Bitcoin, for tax sheltered / tax deferred accounts such as an RRSP. TFSA, RRIF etc. The trade-off when compared to holding BTC outside a tax sheltered / tax deferred account is the fees and counterparty risk associated with the trust vs the tax benefits.

If this were the case, it would have been dumb of Winklevoss to announce that they have a 1% stake in Bitcoin.

huge news.

is there some article we can read?

What this fund, if its is approved, offers more than anything is legitimacy in the financial markets. It offers a place for hedge fund and other managers to put a small position of their multi-billion dollar accounts without worrying about being seen as mavericks or crazies.

It will also be a place were mom and pop investors can put some of their monies.

The implications of this are huge, because if this happens, BTC will go from being the random odd fun story on CNBC to something that is  considered REAL and here to stay.

I am not saying BTC will be immediately popular or respected, but it would be considered a member (albiet perhaps black sheep) of the financial community.

The fund does not have $$$.  The fund has BTC that they bought with investor funds.  However, the effect is the same.  Only those who sell before the pop and those who bought low will retain their wealth.

Am I missing something, or is there really no news?  It's a blank screen, still awaiting the "approval" or whatever.

Well, I guess the only news is that they filed and then it was sent back to them to add some more legal explanations, which they did, and it seems like the ETF approval is going through the normal stages. What this means is that it is not dead in the water and its optimistic that progress is being made. The fact that Bloomberg has a spot ready for the EFT if approved is visually optimistic, although I would doubt - could be wrong - that this really has anything to do with final approval. However, while some laughed the ETF off as not standing a chance of approval, it seems that is not the case. And that, in my opinion, is great news.

good interpretation.

Pretty sure it is just a placeholder since the ETF is still going through the approval process.

Here's a copy of the filing.

http://www.sec.gov/Archives/edgar/data/1579346/000119312513393903/d562329ds1a.htm

So basically you are buying futures in bitcoin when you buy this stock? I don't understand how this works.

I do not have much experience with these type of documents but I find it interesting the following language in the proposal. I do not think this is typical verbage on most ETF applications, although I could be wrong. It seems to spell some of the future obstacles for Bitcoin in the U.S.

But it also shows you what it may mean if an ETF is approved and remains alive going forward:

    The Trustee will terminate and liquidate the Trust if one of the following events occurs:

•      the Trustee is notified that the Shares are delisted from the [EXCHANGE] and are not approved for listing on another national securities exchange within five business days of their delisting;

•      Shareholders acting in respect of at least 75 percent of the outstanding Shares notify the Trustee that they elect to terminate the Trust;

•     60 days have elapsed since the Trustee notified the Sponsor of the Trustee’s election to resign and a successor trustee has not been appointed and accepted its appointment

•    the SEC determines that the Trust is an investment company under the Investment Company Act of 1940 and the Trustee has actual knowledge of that determination;

•     the CFTC determines that the Trust is a commodity pool under the Commodity Exchange Act of 1936, as amended (“CEA”), and the Trustee receives notice from the Sponsor that, because of that determination, termination of the Trust is advisable;

•     the Trust is determined to be a “money transmitter” under the regulations promulgated by FinCEN under the authority of the US Bank Secrecy Act and is required to comply with certain FinCEN regulations thereunder, and the Trust receives notice from the Sponsor that, because of that determination, termination of the Trust is advisable;


•     the Trust fails to qualify for treatment, or ceases to be treated, as a grantor trust for US federal income tax purposes, and the Trustee receives notice from the Sponsor that the Sponsor determines that, because of that tax treatment or change in tax treatment, termination of the Trust is advisable;

•     a United States regulator requires the Trust to shut down or forces the Trust to liquidate its Bitcoins;

•     the aggregate market capitalization of the Trust, based on the closing price of the Shares, was less than $[    ] million (as adjusted for inflation by reference to the US Consumer Price Index) at any time after the first anniversary of the Trust’s formation and the Trustee receives, within six months after the last trading date on which the aggregate market capitalization of the Trust was less than $[    ] million, notice from the Sponsor of its decision to terminate the Trust;
   
•     60 days have elapsed since DTC ceases to act as depository with respect to the Shares and the Sponsor has not identified another depository that is willing to act in such capacity; or

•     the Trustee elects to terminate the Trust after the Sponsor is conclusively deemed to have resigned effective immediately as a result of the Sponsor being adjudged bankrupt or insolvent, or a receiver of the Sponsor or of its property being appointed, or a trustee or liquidator or any public officer taking charge or control of the Sponsor or of its property or affairs for the purpose of rehabilitation, conservation or liquidation.

 [/i]

This means that if this fund is SEC approved, the bitcoin market will quadruple in less than a month.  The market will hit several billion dollars of worth.  BTC prices will sky rocket.

How is the SEC going to regulate earnings, fraud, and tax free cashouts, etc?

There are no tax free cashouts in an ETF. No anonymity.

I think its more like you're buying a share in Winklevoss's 1% stake in bitcoin.
the Winklevoss hold the bitcoin, and say that these shares are as good as the real thing, and poeple trade the shares not the bitcoins.
poeple believe that these shares are as good as the real thing, so in theory they will follow BTC price very closely.


can you actually get BTC out of this trust?
no i would think not. $ in $ out.

so why do poeple believe its as good as the real thing?
idk!

Actually, the shares can act as sort of an exchange. If money comes in those shares can start to be worth more than the current rate of BTC and thus potentially drive the price of BTC upwards. I believe this has happened with some of the larger precious metal ETFs.

Do you know if they provided any conditions as to when the ETF will be launched?

So basically even if every single "share" of their bitcoin was bought, not a single coin would be bought on the market? All the Winklevoss gains are from fees?

When asked in London a few weeks ago, the Winklevoss' said 6 months. Then paused and said maybe 12. I think they are trying to be conservative in their estimates.

In other words of some other words, its the way they can dump their coins without crashing the market.

Yup. They hold the underlying in a secure wallet and sell out 'shares' of ETFs. The advantage is that funds that have specific mandates can invest in Bitcoin indirectly - you can't have a pension fund manager buy Bitcoin with his client's funds but she can buy a Bitcoin ETF.

No, as more $$ comes in they have to buy more BTC to fill more "baskets."

Winklevoss are selling their coins in the form of shares. they stand to gain from fees and the selling of the shares.
These ETFs can be viewed as HUGE ask walls that constantly move with price.

If you are going with the RIDICULOUS assertion that they are doing this to dump their coins you are bat***t crazy.

These guys are worth 64 million+. They have invested $2 million into bitcoin. They are creating a ETF to profit and spread accessibility to the BTC marketplace.

End. Of. Story.

Good, in 6-12 months from now BTC is still likely to be fairly cheap. Maybe more along the lines of $300-$500, but I doubt we'll have cracked $1000 by then.

At least from my perspective its key to keep BTC low until that point. I have so much money in my IRA that could just be plopped into BTC the moment that baby hits the exchange its not even funny. I actually make a fair amount from my job each year and although I spend pretty much all my free income on expense & shit, I always make the maximum tax-free additions to my IRA & 401k, and my 401k was even rolled into my IRA, so now the thing is damn humongous. Its the ideal place to invest in BTC, with the added benefit of not being tempted to gamble on gox :)

lol noobs

I dont follow. If the trust is cancelled everyone gets refunded [lets just make it simple] anll their gains are from fees. Now, the market price should not have been changed because of the ETF because all it does is reduce demand on the exchanges... but increases interest. So, if it closes, maybe the price drops. Now where did they offload the coins?
Yeah... thats what I see. But its basically ask walls that have a ton of investors throwing money at it rather than a few people with money on exchanges. What happens when the shares are out?




Doesnt it make more sense that they have, lets say, 100k coins. They market sell all of them to people, and with this money buy.. 80k more? And then sell them.. rinse and repeat.

Seems bullish.

lol

Explain yourself or just look stupid for us.

They will buy more of the underlining commodity. That is how an ETF works.

So they are going to lose a couple % of their bitcoins but accelerate the rate of their acceptance drastically..?

They will use their 17k bitcoins are a starting point. They can always replenish those.

+1

Basically this.

And not really lose a couple of their BTC, because they'll collect fees, which of course they can use to buy more BTC.

Don't you lose 5% per year???

Seriously, BTC moves 5% in a day.

try $18 trillion. as of 2011:

http://www.ebri.org/publications/benfaq/index.cfm?fa=retfaq4

edit:  $20.9 trillion as of 2nd qtr 2013

http://ici.org/research/stats/retirement/ret_13_q2

Once all these derivatives are approved on top of bitcoin next step is to outlaw private bitcoin ownership itself.  The governmental logic would be why you need to own bitcoin when you can own an ETF for it.  Also gotta love the risk section of it
"The loss or destruction of a private key required to access a Bitcoin may be irreversible. The Trust’s loss of access to its private keys or its experience of a data loss relating to the Trust’s Bitcoins could adversely affect an investment in the Shares.
Bitcoins are controllable only by the possessor of both the unique public key and private key relating to the local or online digital wallet in which the Bitcoins are held. The Trust is required by the operation of the Bitcoin Network to publish the public key relating to a digital wallet in use by the Trust when it first verifies a spending transaction from that digital wallet and disseminates such information into the Bitcoin Network. The Trust safeguards and keeps private the private keys relating to such digital wallets using the Security System. To the extent a private key is lost, destroyed or otherwise compromised and no backup of the private key is accessible, the Trust will be unable to access the Bitcoins held in the related digital wallet and the private key will not be capable of being restored by the Bitcoin Network. Any loss of private keys relating to digital wallets used to store the Trust’s Bitcoins could adversely affect an investment in the Shares."
Also where is the bitcoin address with all these coins?  You'd think that would be front and center but I can't seem to find it.

So basically if this goes through, we could see a massive spike in BTC prices?

You might see an initial spike and then longer term future traction, best case scenario, imo.

next step?  what are you talking about?  you act like there's some grand plan that is being executed to rob ppl of their BTC.  and who exactly is behind this?  the Winklevii in cahoots with the gubmint?  ridiculous.

if this ETF gets approved, it's to the moon.  it's too late to prevent private ownership of Bitcoin.  ask the Chinese.

In a way, its not too much unlike owning stock (BTC) in a company (Bitcoin Protocol) before an IPO (ETF).

NOT EXACTLY, but definitely similar in some aspects.

Filing accepted October 8, that's about when the current rally started. Coincidence?

ya peoples 401k and RRSPs will save us

Gee I really want to invest in this shady market, but it's not really shady, it just looks shady so could you go bust some guys doing bad things with it?

bitcoin is used for shady deals, it will continue to be used for that, because it works.

also: http://www.youtube.com/watch?v=fZfg1Gtcg08

There is no grand plan.  Government could care less about a few billion in total bitcoins.  But you think that bitcoin can reach a few trillion without more regulation from the government?  Bitcoin is unregulateable but so are drugs and that hasn't stopped most governments from trying.

Regulation is exactly what Bitcoin needs if its going to grow fast. All the major players are begging for regulation and rulings.

the problem with this is that regulators have this bad habit of moving the goalposts to protect their own private interests. 

Bitcoin was designed to circumvent this which is why so many businesses that you refer to are having a hard time.  ex:  Bitinstant

give them some coins, problem solved.

Did anyone read the SEC filing? Check the prospectus summary. The sponsor of the trust is a company founded in May 2013 that is wholly owned by the Winkeloss twins. Funny how this works, you need a sponsor to start a trust but you can just start another company to do the sponsoring. Seem really useful ...

One of the primary purposes of a corporation is to have a separate legal personality, so a corporation, even one you control, has a separate legal existence.  Do the paperwork right and it can even take the fall for you in times of legal or financial trouble.

I saw the twins speak at the San Jose conference.  

They get it.  They grok Bitcoin, from its reasons for existing to the massive implications its existence entails.

They didn't need to be there talking to a room of pimply crypto-uber-nerds, but they are true believers and did so anyway.

They are with us, not against us.  Remember, these two Harvard grads are very smart, and rich, and invented Facebook.

They could have been in Aspen or Gstaad instead, enjoying their massive wealth.  Instead, they chose to join the revolution.

I respect that.

They're trying to become Billionaires

They'll make many of us wealthy in the process if the ETF gets approved

For ownership I know that.

What's the use for a sponsor though? From the wording I assumed a sponsor was required to show you could find another entity which backs you up.

Usually, having a "good" sponsor is important because most ETF sponsors are experienced in the field.  This new sponsor entity has never done this kind of work, so to the extent that's a plus for an EFT, this entity lacks it.  However, even entities experienced in this kind of instrument have never done a Bitcoin EFT, so the whole project is terra incognita, even to the "Big Boys." 

I think it can and should be treated (at least by the stodgy fund guys) as what it is, a high-risk, high-yield investment opportunity, and given the proper place in a portfolio based on that.  The fund is higher risk than BTC itself, IMO, because of the not insubstantial risk of the Winklevoss twins or their people themselves somehow screwing up, losing the keys, or getting hacked, because their trove of coin is going to be a fat, juicy target.

The twins has owned 1% of Bitcoin for years, without screwing up. I don't think they'll start now

it is in the regulatory filing, they don't exactly have a choice...

They're likely to end up having more than they have now.  That might be the number one target in the world for an electronic heist, especially considering the potential for actually getting away with it.

This ETF, if approved, will be the thing that takes bitcoin to the next level.

It's amazing how many people here don't get that. They don't like the Winklevoss twins because they saw that movie and think they are money-grubbing assholes. But they Winklevoss twins are smart and they get it.

This ETF will take bitcoin's value from the hundreds to the thousands overnight. Possibly even tens of thousands.

For most of us, buying the real thing directly is better that buying shares in an ETF.

But this opens up bitcoin to everyone who isn't sophisticated enough or doesn't have the time to go through all the steps to open up an account on a exchange, wire money to a foreign country, and manage their own wallet.

This lets your grandmother invest in bitcoin.

My mother has been reading about bitcoin in the news and she has repeatedly asked how she can buy some. I basically just tell her that I will sell her some when I see her at Thanksgiving. Her friends have been e-mailing me too, asking if they should invest in bitcoin and how they can buy them.

This ETF would let them invest much more easily than it is now and even more importantly it would allow the trillions in retirement fund accounts to invest in bitcoin!

As someone said earlier, most American families do not have the liquid cash to go out and buy bitcoins. But many of them do have 401ks and IRAs which could invest in this ETF.

The price should also stabilize a bit as the size of the market grows a couple of orders of magnitude. Bitcoin will also be finally seen as legitimate to institutional investors and that should help it stabilize too.

This ETF is a wonderful thing for bitcoin.

There's no need to wait; SecondMarket can get IRA into Bitcoin through partners now.

really?  link?

Only if your net worth is quite high.

The ETF will add liquidity and will allow people to invest the capital necessary to get things like migrant worker payment systems in place and hopefully a true merchant processing competitor.
It will also allow people to short bitcoin in a large way which will be really interesting.  When you trade commodities there are differences between physical and financial.   Many times the financial delivery exceeds the actual physical delivery capacity.
ie.   If someone had short sold to me millions of barrels of oil for march delivery, I can demand physical delivery at cushing.   If I do not trade out of it in the three days before expiration, I can schedule with the seller when he must deliver.   This gives you spikes in the spot market sometimes but generally people can settle on the financial contract.     
Now think this about this.   If some smart guys said "bitcoin is BS, let's bust it" (you know kind of like Soros did to the pound) and they shorted TONS of bitcoin, how would they deliver if a large group of miners/hoarders refused to sell their stored coins.   What would happen to the spot market in bitcoin?  Because the great thing about ETFs (and later futures) is that people can financially sell more than the entire market size.   But with bitcoin, you cannot deliver what is not there.   Those are the days I look forward too, when the shorts get squeezed for the first few times because they are used to shorting other "commodities/currencies" that they can always hedge out of.

https://www.secondmarket.com/ *but* I haven't actually transacted with them yet; I'll report how it goes.  All I have done so far is just signed up and exchanged a couple of emails.  The partner they are connecting me with is Equity Institutional http://www.equityinstitutional.com/ (formerly Sterling Trust whom I contacted a while ago but at least at that time they weren't touching Bitcoin yet).

secondmarket is only open to rich people tho. Winklevoss Bitcoin Trust  would be open to all.

what is this equityinstitutional.com

i thought secondmarket.com was going to handle the bitcoins on their own.

This.

I know the moment this is approved (assuming it will be) I will be getting some in my 401k.

Plenty of folks are rich enough *if* they include their retirement funds.  As an alternative, paying the penalty and taxes to withdraw retirement funds prematurely is a pretty painful way to get into Bitcoin but with the kind of potential it could very well be worth it -- one does not need to be rich enough to use this approach just committed/brave.

I left a voice message with the Equity Institutional person directly and an awaiting a callback.  They are a trust company.  They can hold things, e.g. Bitcoins, in trust for folks.

SecondMarket is apparently partnering with Equity Institutional (and others) to connect Bitcoin investors with trust companies.  I'm sure SecondMarket will want a fee for making this connection but pretty quickly folks will find their own way to the trust companies.

Yes, I do know; in fact, I borrowed against my 401k a couple of months ago but each payment back into $US denominate funds goes against the Bitcoin grain.

SecondMarket is sticking to their $25K (USD) minimum.  They rejected my request to bring in just ~$14K (USD) at first.  They also insist on documentation showing one is an Accredited Investor, i.e. net worth excluding main residence >$1M (USD).  Even if I can make both hurdles do I want to pay their 1.5% front end, 2% annual and 1.5% back end fees besides the additional fees the trust company charges for their services?  The SecondMarket unit investment trust (UIT), Bitcoin Investment Trust http://www.bitcointrust.co/ (with a suspicious Columbian domain), will be something less than 100% Bitcoin (obviously they will have to have some cash on hand).  Finally, they indicate they will liquid by March 2014 (at that point allowing folks to get out) but how can we be sure?

Yes this, Bitcoin is such a different asset in that it is so easy to demand 'physical' payment against the shorts.

With oil or gold you have to understand the delivery mechanisms cover fees, etc. With a bitcoin ETF you would simply provide your payment address for delivery, the barrier for participation is much lower. Most ETFs (such as GLD) function where approved liquidity providers are able to buy or sell x amount of the underlying assest into the ETF, this keeps the ETF tracking the underlying asset. With a Bitcoin ETF liquidity providers would buy or sell fixed blocks of BTC in and out.

In this situation a short squeeze is so much more likely and something typical bankers / traders could be caught by.

Have you asked them if they already have the coins backing this and if yes are they willing to give you the public address for them.

most of these do not hold the underlying but use futures hedging to try and match the return (read up the bear 3x spy and such).   This is why I think this could be very interesting.

What futures?  There are no bitcoin futures that I know of.

Exactly.

Don't worry, it won't take long for them to try to create futures. Only this time there won't be a FED to bail out poor decisions...

You are right, but with the ETF it's easier to go short on Bitcoins.
And if 1% of all Bitcoins are sold on the market, then you know what's going to happen?
They only need the miners coins if they want to go short on more than 1%. But 1% can be enought to ruin the price.

There are probably a bunch of banks that have more money than everyone of us that have then easier access with the ETF's to destroy Bitcoin, if they want to...

http://www.plus500.co.uk/Instruments/BTCUSD (http://www.plus500.co.uk/Instruments/BTCUSD)

For the education of the less informed, how would they destroy Bitcoin, step-by-step?  (And what could we do to protect ourselves?)

If the banks try that, they're going to get royally fucked, and they know it.

Since all the methods of "destroying" Bitcoin not only wouldn't work, but would in fact amount to torching a huge pile of money, I don't see this.  What would they get out of it?  Would they do it just for the pure evil of it while twirling a black mustache and cackling insanely?

prepare for a rally...

Anyone know when it will go on sale?

BTW, you actually might want to invest in this even if you are a tech-saavy bitcoin holder. If you are in the US (but this applies to other countries too), your employer might match your retirement investment contributions (and there are tax advantages as well), but until the Winklevoss trust thing, you couldn't use that money on anything bitcoin related. Now you can have bitcoins in your retirement portfolio (with your employer doubling up your investment)!

They have filed documents, but they still require approval. Could easily take 6+ months.

This will be so BIG that we (the bitcoin community) need an official weekly update from an insider? or someone who knows the progress of the approval process.
My biggest concern is getting busy and distracted on life issues and missing the announcement of the ETF launch.
I am serious... this will be huge.  Immediately, most of the working class, semi-retired and full retired folk that are searching for a place to put their large stash of 401k and roth money, will be buyers.

Just in my little circle of professionals, there is a very large amount of saved money just sitting in bonds and cash (guaranteed income funds) that is just looking for somewhere to go.  My peers are too conservative to get into bitcoin in its current "wild-west" environment, but are quite excited to hear that they may soon be able to invest in bitcoin with the security of the SEC/wall street.  Were talking about hundreds of thousands of US$ in just my little middle class circle of acquaintances.  I can imagine that if this is the case in just a small percentage of the US, especially once the media does its thing with it, we will have to prepare for a large step function in the price of BTC.

If anyone learns of a method to track and keep updated with the progress of this ETF, please share.  Maybe even a special email or distribution network may be in order.  Just a thought.

P.S. I am not real confident that the Winklevoss website will do the task of keeping the public updated and informed.  I am too suspicious that the information will be kept between "insiders" until it is too late.

Lol at trusting wall street over silicon valley.

Sigh... So people won't invest in an asset through a mechanism with 0% fees, but are more inclined to invest in the same asset with 2%/yr fees.

And people wonder why the bankers keep winning. The bankers keep winning because the average person allows them to.

you cannot take money out of a 401k or IRA without 10% tax penalties so no it is not 0%

Homeless as in "not a home owner" and not as in "living in streets" I hope? ;)

A load of my mind ;)

Anyway, then I'm homeless too. I don't want to own something really overvalued in a leveraged fashion for more than my net worth ...

you should become a home owner! housing really does only ever go up in value.

everyone needs a nice place to live.

move to canada. :D

Price != value



You don't have to own where you live.


There are worse places :)

so what's the deal is this baby getting the green light or is this going to get delayed as well  due to the gubbamint shutdown? when did they all come back to work? we would need to count about 21 days from that day...

i think usually the SEC gets a few weeks to reply if they have further questions.

what are your guys thought on the short term impact?  will this cause price to go up or down as more supply floods the market?  

or really this is a new supply to an unmet demand, so is this trust structured in a way that they start buying more BTC as they fill up?

This will make btc skyrocket just from an adoption perspective alone.. The greater the adoption of bitcoin, the greater the price...

Has this gone live yet?

Sometime next year most likely.

Seriously, it's the same asset however it's packaged.  We trust Bitcoin because we know how it works and we know how to keep other people from stealing it.  Why is it a bad thing that your grandmother can buy it now using ways of buying things that she understands?

This Winklevoss trust is a GOOD thing.  

Hopefully some bigshot investors get on board :P

I agree that anything which helps people join the BTC train who otherwise would not have is a good thing. The ETF is also worthwhile for money locked in 401K type accounts.

My comment was more that it is a shame many people would rather pay 2%/year than take 1 hour to learn bitcoin and do something simple like sign up at coinbase. 2%/yr adds up and is a tremendous amount over a decade or two...

no but i'm still right.


renting is a wast of money. living with your parents = loser.


Canada is the best place to live, especially for bitcoiners

There are no places in the "developed" world where you can truly own your real estate.  People confuse a piece of paper that obligates them to pay various taxes and fees in exchange for occupancy with actual ownership.  Not too mention the fact that interest payments on loans or communal homeowner fees in planned developments are basically another form of rent.

Why? I'm planning to rent for a long time :)

Yes it's expensive, but investing more than your net worth into overpriced real estate is such a bad idea ...

I asked SecondMarket, "Will you provide the Bitcoin address or addresses where the trust holdings will reside so that I can use something like Blockchain.info to confirm balances?"

SecondMarket responded, "For security reasons, we will not be able to share the addresses. As you may have read, we have partnered with great service providers including Ernst and Young on the audit side and Sidley Austin on the legal side to oversee our storing of bitcoin."

My real estate has already tripled in less than 15 years.  In the non-bitcoin world, that's pretty hard to do.

That is a horrible answer. Bitcoin as a technology gives them the possibility to make their holdings 100% transparent and auditable at almost 0 cost and they simply choose not to for a made up security reason.

You mean the same Ernst and Young that oversaw the Lehman Brothers fraud?  (Although it appears they were not punished for this because of a lack of evidence.)

I am pretty sure most houses tripled in the last 15yrs. Also right now it is a seller's market so if you actually try to sell you probably will not get that amount, cause most houses are overvalued so can't go on that.

So, I asked SecondMarket, "Would you please help me understand; how would sharing the public addresses compromise security?  Obviously sharing the private key would absolutely do so.

Also, do you have insurance covering the unlikely loss of the private keys?"

Yes, that's price. It's one of the biggest bubbles that exist. There is hardly any value there. At least that is how I see it.

I would only invest in this if they shared the public keys for auditing purposes.

Sprott physical gold trust does this. They provide the audit reports with  comex bar numbers.

Sharing a comex gold bar numbers is the same as sharing a btc public key. It allows etf owner to verify the asset exists to back the etf but does not provide physical access and the holding remains secure.

You were never planning on investing with them were you? Given the fees and all?

If not, it just seems like you are harassing them a bit. They are a private company and certainly have the right to hide their address and keys. You might not like it, but their investors don't care. And if this is about wondering if they are being honest, then this is nothing more than conspiracy theory. Secondmarket has a long and solid track record. They have taken flack for investing in BTC. But their core asset is their trust with their investor and client list. Doing harm that list would ruin their company.

Secondmarket is a good asset and important part of the BTC army of expansion. Just be happy about that.

+1

Clearly Secondmarket is marketing to a different set of clients than the folks who are technically familiar with bitcoin. It's equivalent of selling shares of valuable internet domain to people who read the newspaper daily and don't even have a computer. And then not telling it's customers what those domain names are. There are people who will still buy this, just based on their trust with the the company behind the fund.

Some clients might even prefer a setup where they have no knowledge of actual public addresses that could potentially be linked back to them.

True.  But you have to include what I've saved on rent...

I am just inches from investing with them -- fees and all.  Until the ETF is available, retirement funds can't be moved into Bitcoin short of withdrawing them and paying 10% penalty and income taxes (if not Roth) -- yuk.

Assuming minimum investment of $25K, that would be;

$375 1.5% initial fee
$500 2.0% annual fee which piles up the more years you're in
$?     1.5% exit fee

But, there's also the Equity Institutional fees to be considered.

If Bitcoin goes to zero or just down it will be unpleasant.  If Bitcoin coins up enough then it is a win.  One invests in Bitcoin to be diversified; to hedge against the falling US dollar.

I am technically familiar with Bitcoin yet I am also very close to becoming a SecondMarket client -- perhaps I am just rare/special.  So far I haven't found a way to bring my retirement funds into Bitcoin; SecondMarket gives me that.

I have yet to encounter anyone else (except my son who was the one that spark my interest in the first place) I personally know that wants to enter Bitcoin at all -- I am perhaps not the most effective ambassador.  Well, I've gotten a couple of very minor nibbles but nothing big.

Not only is there no insurance there's likely a clause that absolves them of liability in the case of loss.  But you won't convince the fanboys of these trusts because bitcoin is just another bubble to them to profit in fiat terms.  Investing in these is to throw away every positive reason behind owning bitcoin except its value appreciation and even that basically comes with risk.  If private keys get lost/stolen then the investors couldn't even trace the coins because you'll just get a nice generic letter stating they lost them.  If bitcoin becomes huge and government decides to ban it or confiscate or perhaps place a huge windfall tax then you'll also get a nice form letter and that's it.  But hey who cares about bitcoin being revolutionary or freedom inspiring as long as you get an IRA deduction.

Don't you also need a self-directed IRA plan somewhere else? Got any potentials lined up for that?

+2

Don't see why not listing the public address would make you paranoid that they didn't even hold the BTC or something.  They aren't concerned about you getting the private key, but maybe they don't want to disclose, when they don't have to, where it's located, how it's distributed (one on address, or many), how much others have invested, and the paper trail of where that BTC came from and moved.  Seems reasonable to me really..

If you don't mind the fees, Id invest if I was you.  The ETF will probably be a better deal re: fees, but that isn't a guarantee and could be awhile. Assuming there is no penalty for switching from 2nd market to ETF, then you don't have much to lose, assuming you believe market will go up in next 6 months from where it is today.

The only problem I see is that the price per share of an ETF is supposed to match what it's an ETF for. So if someone buys $1000 worth and BTC is $200 each, then they technically need to buy 5 more bitcoins. What if the demand is so high that not enough BTC is available for sale? Not sure you can lock an ETF, and say sorry no more can be bought. You could buy if someone is willing to sell their shares of it because then the total correlation of dollars to BTC is not changing.

A crucial piece of info was missing...

I also prefer rent. Here you get about 3% return on capital, which cannot compare with bitcoin.

there will always be bitcoins for sale. the asking price will rise until someone is willing to sell.

The custodian for my IRA will be Equity Institutional (formerly Sterling Trust).  I have submitted all of the application forms (not too tough).  I am just waiting now for the final clearance from SecondMarket.  So, last chance for any vital revelations.  I appreciate both the votes of confidence from Windjc and Rygon, etc., *and* the plea to strive for purity.  I have felt for a very long time a desire to diversify out of US dollar denominate investments but never could see any sense in the Euro, Yen, Yuan, etc.  Physical commodities are not without their cons.  I want to take retirement funds, especially Roth, into Bitcoin but do not want to wait for the ETF; transferring to the ETF in the future might be reasonable.  I have no intention of dumping Bitcoin when the exchange rate reaches some magical amount.  If Bitcoin fails then my diversification play looses; so be it.  If Bitcoin succeeds then I will spend mine on goods and services as I see fit or pass them along to my beneficiaries.  I am no day trader.

Based on the limited research I've done, I trust SecondMarket and Equity Institutional enough to plow $25K in.  If they screw up then they will miss out on a tremendous opportunity to do more business with many people.  Someone has to take a chance and go first/early; I'm willing and able.  I will continue to report on my experiences.

Why not just buy a casasuis gold bitcoin.  Gold coins are allowed in an IRA.  You'd rather buy an ETF then actual bitcoins.  Makes no sense.

Reasonable guesses; it will be interesting to get SecondMarket's response.

Would there be a way for someone to "sign" a message proving they have control of a certain amount of Bitcoins *without* revealing any public addresses?  Is this akin to what I've heard discussed called "Proof of Stake"?

Gold coins are allowed in an IRA *but* they must be held by a custodian -- you are not allowed to store the coins yourself.  This is a common misconception.

I would *much* rather just buy Bitcoins but I can't with my IRA -- btw, I have purchased Bitcoins with non-retirement funds which is great but I want more.  The next best thing would be to find a custodian that would hold Bitcoins for me but I tried but failed to find one.  I even started to explore creating a trust company but I soon discovered that's real work and very costly.  Now I have found Equity Institutional is willing to be my custodian to hold shares of a Unit Investment Trust (UIT), specifically the Bitcoin Investment Trust offered by SecondMarket.  Granted it is not the same as owning Bitcoins myself but it'll have to do for now.  Perhaps one day another custodian will come along and offer to hold Bitcoins for my IRA but until then I don't have that option.

If/when the/an ETF is finally stood then I will evaluate that approach as compared to the SecondMarket UIT.

What account type are you using, EI's Flex IRA?

Not important, except for the publicity it brings.

Yes.

If you or anyone else is interested then let me know and I will connect you to the folks I'm working with.  Perhaps we should suggest a referral program.