Bitcoin Forum

The volatility in bitcoin is sometimes more than 200%, said Pantera Capital Management Chief Executive Dan Morehead.

To offset that volatility, Pantera has an offering that gives its investors a 50-50 mix of bitcoin and U.S. Treasurys, he said at the Inside Bitcoins conference in New York on Tuesday.

http://blogs.marketwatch.com/thetell/2014/04/08/watered-down-bitcoin-for-institutional-investors/ (http://blogs.marketwatch.com/thetell/2014/04/08/watered-down-bitcoin-for-institutional-investors/)

And Mark Andressen said Bitcoin would be hated by its early adopters, eventually.

Stuff like this has to happen for the ignorant masses to feel comfortable.

It doesn't change what Bitcoin is.  And despite how we feel about it, its going to play a *major* role in increasing the value of your coins.  

And I'd like to think that long term that pure Bitcoin will still be readily accessible.

Maybe not in the USA, but elsewhere.

-B-

This is utterly reasonable.

Bitcoin is going to be part of mutual funds at some point.  Just like any other real asset.

I think it will be readily accessible in the US for a looong time.  The IRS classification basically paved the way for Wall street to pump it.  I have heard from major insiders that they have big plans for BTC and it near future valuation.  BTC is on sale right now, even if it continues to drop.

It's a stupid idea that only muppet clients would invest in. The better alternative to a 50-50 mix is to invest half the money and keep the other half in cash.

But treasuries pay better than cash.

i like tax free muni bonds better

it means that 50% of a huge amount of money flows into BTC

great news, good luck to the shorties  8)

Im sure less than 1% of the mined bitcoins are short, there is not many means of doing so. 

Curious ... are institutional investors so incompetent that they don't know how to manage a portfolio of assets with different risk profiles? If they find a specific asset more volatile, can they not simply reduce their exposure? (e.g. buy 50% as much!)

I'm sure a lot of the hedge fund types are mostly looking for optionality. For example buying premium with long expiries, or going long vol. There is almost nothing like that out there, certainly not with any liquidity.

well, many people are not really short but sold a la baisse, hoping they can buy back in lower

that will also lead to quite some squeeze if price goes up instead

One way or another, half of that portfolio is going to zero. :P

*Treasuries

What's the advantage of buying bitcoins and US treasuries through Pantera vs. buying them directly? Or investing in their bitcoin-only offering vs. just buying bitcoins off an exchange?

Some early adopters developed a portfolio consisting of bitcoins, hookers, and blow.

because pantera are tying them up with an imaginary bow, and lots of imaginary glitter, then charging a premium. the same is said for expensive restaurants. why pay over $100 for a bit of lettuce and a carrot.. "its the service and experience you are paying for"

Keep the other half in silver rounds I would say.

That isn't a squeeze.  Squeeze's occur when people have no option but to cover a position to avoid a margin call.  People hoping to buy at lower prices just means prices will continue to trend down until there is an explicit reason to buy.

Great idea.

As soon as their investors understand bitcoin I think they will see that this service does nothing they could not have done themselves. Why not just buy some bitcoins then buy some T-bonds?

Storing btc securely is a value-add.

That's a good point. They are also insured, I assume. But if you understand the technology then you may consider unshared control of your private keys to be even more secure than trusting a third party. If you don't understand, then farming out security might be a worthwhile investment.

The fact that they split 50-50 is stupid. The fund only works for someone that wants to invest the same amount of money in BTC as they invest in treasuries. How many people will want to do that? Are they also going to provide the entire range of funds with mixes from 90-10 to 10-90?

Ah come on... Accept it for what it's worth and be grateful it's helping adoption. 
Should resse's peanut butter cups start offering different mix ratios of peanut butter and chocolate?  :D

True.  Also institutional investors it starts getting more complex , you need multisig, who in the institution
Will hold the keys,etc...maybe better for them to use a financial holdings company.