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Title: How a hedge fund should invest in bitcoin Post by: notig on April 11, 2013, 07:46:25 AM Say you have a hedge fund with 400 million available to invest in bitcoin. How should they go about doing this?
Let's look at the wrong way: buying 400 million worth of bitcoins either all at once or spread throughout time. Not a good idea Lets look at the right way : Spend somewhere in the vacinity of 10-25% of your available funds on actual bitcoins spread out in time. So in this case that would be 40-100 million tops. The rest of the funds you would INVEST into stability. You would use that money to create a massive bid wall at the price you entered the market. a 300 million dollar bidwall at the price you enter the market will pretty much provide some stability (in crashing). The idea is that the amount you invest of 10-25% would do so well in increasing in value that you don't need to invest everything. You win if the price goes up. And if the price tries to go down and your wall starts to get eaten... then you can use those bitcoins that were purchased to start creating stability on the inevitable price rise as well. http://www.reddit.com/r/Bitcoin/comments/1c4fxm/how_a_large_hedge_fund_should_invest_in_bitcoin/ |