Bitcoin Forum

http://www.streetinsider.com/Forex/Winklevoss+Bitcoin+Trust+Plans+to+List+on+Nasdaq+Under+COIN/9629980.html

Pretty good day for bitcoin

I wonder when the price will start showing all the good news of the past months.

$650 is a joke

No my friend!!! It's going to fall!!!  :D :D :D

By the time the news comes out, it's already priced in. umad bro?

So now we know the ticker symbol. But when will it start trading?

I feel like ages have passed since the first announcement of the trust. Is the registration process reaching completion any time soon?
If it requires a lot more time it may be possible that their investment vehicle is no longer of any use, because Bitcoin is already easily accessible for everyone.

ya.ya.yo!

Well ASAP apparently:

This

Just one more step closer.  As soon as it happens, my self-directed IRAs are going into bitcoin.

Maybe...but like the phoenix she will rise again stronger than ever!!

yes it is, price should be around $1500 if we follow the long term log graph trend by Stephen Reed (SlipperySlope):
Below is delta from the trend and one can see that we are scraping the bottom:
https://docs.google.com/spreadsheet/ccc?key=0ArD8rjI3DD1WdFIzNDFMeEhVSzhwcEVXZDVzdVpGU2c#gid=7

nobody should sell until we are at least at +0.4

If there are options on this it'll get shorted big time

check out bitfinex

I have.   But w options its a lot easier to build risk limited positions

And I just want to do it from my TDA account

It's a pretty contentious issue, the better question is whether or not they'll manage to get it out before year's end...

https://www.betmoose.com/uploads/img/25.jpg (https://www.betmoose.com/bet/winklevoss-bitcoin-etf-will-trade-on-the-nasdaq)___________

Winklevoss Bitcoin ETF will trade on the NASDAQ (https://www.betmoose.com/bet/winklevoss-bitcoin-etf-will-trade-on-the-nasdaq) Options: Yes (https://www.betmoose.com/bet/winklevoss-bitcoin-etf-will-trade-on-the-nasdaq#1) | No (https://www.betmoose.com/bet/winklevoss-bitcoin-etf-will-trade-on-the-nasdaq#2)

Only 1 million shares.   Small float = easy manipulation

Pump and dump time

Having access to wall street money, who really know how high bitcoin will go.

Yeah they'll pump it then dump it.   Leaving all retail bagholders in tears.   Seen it all the time in pennystocks

A wise investor needs to have exit strategy and not trying to time the market to exit at the top.

I am reading the Registration Statement now. I do not understand the maths behind it. Can anyone help me out?

My understanding (could be wrong) of the COIN ETF: WBT is issuing 1 million shares and each share represents 0.2btc. The price of bitcoin today is around $600 (for easy calculation). So, each share should have a trading value of around $120. But on page 1 of the Registration Statement, it says "proposed maximum offering price per Share" is $20.09??

The share price listed on nasdaq is also $20.09:
http://www.nasdaq.com/markets/ipos/company/winklevoss-bitcoin-trust-909930-72927

Is that $20.09 offering price going to change?
If not, who is going to make money from the $100 price difference?

Thanks!

The price is not set in stone. As soon as it is listed, it will self adjust to match the market price.

That price was calculated 1 year ago, when bitcoin was about $100 each. I think they will update the price when it is really approved

The winklevoss bros are not going to loose money on this. Surely they will adjust the price later. If not, anyone who bought their IPO would enjoy a 5 fold gain on the first trading day.

Thanks guys. This is what I thought... $20 for 0.2btc is far too cheap. There is surprisingly little information about the ETF on the net. The only thing I could find on the ETF timeline is:

ETF's do not work like that -if more than one million shares are purchased the ETF issues new ones, and buys the bitcoin to hold against them. So if 3 million shares get bought they will issue another 2 million, the fund then buys extra bitcoin with the proceeds of the new share issuance so as be balanced. That way the value of the ETF share stays in line with the value of bitcoin and is not influenced by the supply and demand of the ETF share itself.

When shares are sold back to the ETF they retire them and sell bitcoin so as to stay balanced

So if the ETF gets huge swings in inflows and outflows then it will have a huge impact on bitcoin - unless insitutional market makers get involved in the real bitcoin market so as to smooth flows and volatility.

There are one million shares initially because the ETF  will only own 200,000 bitcoin, and each share is worth 0.2BTC. If more than one million shares get bought the ETF will have to buy bitcoin at market. If less then they may well have to sell bitcoin.


EDIT:

Lets not forget though that to be fully funded at inception or close to inception, ie all one million shares bought, this ETF needs to sell the equivalent  200,000 coins to interested parties , thats USD 130,000,000 at current prices, - and we just had a little panic about 30,000 coins going at auction.

But if more than 200,000 shares are sold (say, 300,000 on the first day), there are only 3600 coins per day to be had.  How will they buy them all?  And for how much?  You can see that if they get to 1,000,000 shares, it will be almost impossible to fill the need, meaning the price of bitcoin will need to skyrocket to massive numbers in order to convince HODLers to sell.

That's a high share price for a IPO.  I wonder if they will change it to .1 or .05 btc per share.  Most IPOs start at $15-30 a share.

Either way I know I will be buying at the btc I can afford the day before it launches.

.1 would be a lot easier, and then they could have 2 million shares available instead.

Shares in ETFs can be "created" by investors giving the trustee the same assets in the index/securities that the ETF is suppose to track. So for example someone could create 5 shares of the bitcoin ETF by giving the trustee 1 BTC

You have a point. If there is overwhelming demand for the ETF, the AP will need to buy bitcoin to create new blocks of shares to drive ETF share price back to "fair value".

You were thinking they would buy from the exchanges in realtime, but I believe they would buy a buffer stock of bitcoin before hand. The 200,000 bitcoin placed in the ETF should not be all of the Winklevosses' holdings. They can guage the demand for the ETF at IPO and decide how bitcoin they need to set aside for creating new shares.

thank you for explaining the term fund for them lol i think some people think stocks= all financial instruments.

May not be a good long term thing for bitcoin as wall street type hoard the coin rather than use it.

They would simply buy them all on the open market. The number of coins available via the miners is not reliant as the authorized participants will not buy directly from the miners, but rather from large whales and on exchanges

How far in advance are they legally allowed to announce the launch date?

very good question. Anyone with experience in this?

I don't know who or how it gets announced, but it's not by the Winklevii:

So where do the coins come from that finance the original IPO shares? Are they selling their own coins as part of the IPO?

It appears that way, since the numbers match.

What makes you think it not the twins? They are forbidden to talk about this now, I assume they will be able to talk about this after approval (which I suspect is a public event in itself).

They are using their own coins for the IPO.

I thought this ETF was kind of like a cold storage for people who don't want to do it themselves. Buyers of shares could also buy and sell shares as they please, taking the "fear of using exchanges" out of the picture. At any time they can ask for the bitcoins in trade for their shares, I am guessing with some additional costs. Then the Winklevii would buy more coins and resell the shares, keeping the amount of coins and shares in the fund the same as people redeem shares for coins. Also, at anytime, the Winklevii can buy more coins and sell the shares to those coins as demand increases, while keeping the ratio of coins to shares the same.

Anyway looking at the retarded ETFs that exist today it really should be approved. Check this list http://etfdb.com/screener/

Women in leadership (WIL)? Really  :D

I suppose I stated that incorrectly. Surely they can talk about it once the launch has happened, but it sounds from the excerpt like they can't talk about it beforehand. I don't have any special knowledge about the rules but I am guessing that launch date would be considered "inside information" which would mean they can't give it out until it's "public knowledge" via formal official announcement by the regulating bodies.

Don't forget all etf also come with fee.

That is only fair and to be expected.

I'm not sure about this, but I don't believe this is correct.  I've held the GLD and SLV ETFs before (disclosure: not currently holding gold, but I do have a few hundred shares of SLV).  My understanding is that the ETF managers do NOT have to maintain physical gold and silver in order to back the ETF.  In the event of a price collapse, it is NOT an option for the ETF holder to request delivery of physical gold and/or silver in exchange for their shares. 

I could be wrong, but I believe the ETF manager is simply required to manage the ETF in a way that the EFT price closely tracks the price of the underlying commodity.

It wouldn't take much googling to find out that there are a LOT of gold and silver bugs who will tell you NEVER to buy the ETFs because they don't have the security of the underlying commodity.  If you want that security, there are other places to buy it that DO have the underlying commodity as support.  Just for an example of the significant difference, check out www.silversaver.com  (http://www.silversaver.com) (disclosure: I also own commodities through SilverSaver.)

The above is complete nonsense.

All ETF are backed by something. You can not take delivery of the underlining asset in the case of ETF.

You cannot, because you're a small player, but larger third parties can. They can also do the opposite, deliver a basket of Bitcoin (or whatever the fund represents) and add it to the fund in exchange for shares. Read the filing :)

Compelling analysis.  I'm glad you shared this insight.

Okay let me spell it out, the above post word for word is incorrect. Invert the post and you get close to the truth. ETFs are backed with the underlying (legally) and in particular for the Bitcoin one this will be very easy to prove by auditing.

So, in other words:

M'i ton erus tuoba siht, tub, I t'nod eveileb siht si tcerroc. E'vi dleh eht DLG and VLS sFTE erofeb....oh, never mind....

(Good to know that in inverse world, I must be holding some GLD shares, but no silver, either in ETF or physically-backed shared.)

I have not read the filing for COIN.  I have read them for GLD and SLV, and, in fact, I learned something today, so thank you for that.  There are still more risks in holding the ETFs as compared to the actual assets:
http://solari.com/articles/Precious_Metals_Puzzle_Palace/
http://www.theaureport.com/pub/na/5817

but GLD and SLV seem to have more safeguards in place than many ETFs/ETNs, etc...

Haha, yes I agree about holding actual assets :). I don't think most people that frequent this forum need this ETF (although maybe some for US tax advantages). The rest of the world however is a different story altogether ;)

Indeed!  And seriously, thank you for giving me the impetus to do some reading today.  It was educational!

I'm happy you found my comments useful in some way :)

If more btc has to be bought or sold to balance out when does it happen?  In real time during the trading day?  End of trading day?  Or just when the winks feel they need to buy or sell a bunch?

The fund does nothing. Certain big players are allowed to either add buckets of Bitcoin to the fund in exchange for shares or redeem shares in exchange for Bitcoins. Whenever the price of the fund doesn't match the price of Bitcoin in the overall market this will be an opportunity for arbitrage for these players. We let the free market do the  rest and presto, the price will follow the market price with a very narrow error margin.

Ok, thats basically like another exchange and every buy in the ETF equals a buy on a regular exchange.

No it doesn't. The shares are traded and can go up in value. If the value of a share is larger than the value of 0.2 BTC and there is sufficient liquidity a market maker will arbitrage, buy a number of Bitcoins (with the number as defined basket size in the filing) send these to the fund and will in exchange get new shares. Subsequently it can sell these shares on the open market making money (remember the shares were trading above the value for Bitcoin on the open market).

1 share in the fund will always represent 0.2 BTC (unless they do a share split) and if more Bitcoin are deposited into the fund more shares will be given out (without diluting shareholders!). Reversely, a market maker can also buy shares in COIN and subsequently redeem these in exchange for the underlying Bitcoins (also per basket). It will do so when the market price of COIN is below that of Bitcoin (and subsequently they can sell the received Bitcoins on the open market to complete the arbitrage cycle).

Or as Ron Burgundy would say ...
https://www.youtube.com/watch?v=pnvHGaHl04o&feature=kp

Thanks, wachtwoord, that's very educational.

It would be more accurate to say that every time someone buys 5 shares of COIN then it would be the same as someone buying one BTC on an exchange.

If the price of COIN was above 1/5 the price of BTC then people would buy BTC on the exchanges in anticipation of APs buying bitcoin with the intention of redeeming it for COIN and selling the COIN on the market.