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.

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.

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

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.

In order to keep the general discussion about the fund separate from the specifics of the initial offering, I've posted about the time, date, and mechanics of the offering in a separate thread:

https://bitcointalk.org/index.php?topic=272879.0

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.

The fund was approved for listing on BTC-TC last night, so we can move forward with issuing shares at any time. However, the whole application process went very quickly and smoothly, and there is no particular urgency to getting the listing out the door, so what I'd like to do is leave the discussion open for another couple of days to allow any remaining questions to be answered and to give the exchange moderators extra time for any feedback they might like to offer.

I'll post again shortly with details of the specific date and time for getting started, but for now I'd like to thank everyone who has put time and effort into reading and evaluating the listing documents. Thank you also to those who have additionally provided feedback, both publicly and in private.

And difficulty futures have been available for a relatively long time on ICBIT, although liquidity is nearly non-existent, unfortunately.

We're now delving into company-specific details, which takes us pretty far afield from the general point I was offering; as of this writing, put options on ASICMiner are available at three different strike prices on BTCT.co alone. I cannot really comment on what would make them 'worthwhile' for anyone in particular, although I will say that in general, options premiums in the Bitcoin space seem to favour option writers.

Fair enough.


There are multiple ways to short mining, either directly -- by borrowing shares (e.g., from someone who holds ASICMiner shares) and then selling them -- or synthetically, via options (e.g., buying put options on the underlying miner). More generally, however, "taking a position in mining" does not have to mean "taking a net long position with delta equal to 1". It might mean taking a short position, or it might mean taking a hedged long position, or anything in between. For example, many people buy exchange-traded shares of a high-yielding miner such as ASICMiner and immediately write calls against the position, yielding an overall position delta which is still positive but less than 1 -- potentially enabling themselves to net the dividend plus the option premium, and gaining a short-term hedge against a fall in the value of the underlying share. (Naturally, that only works if someone buys their calls, given the lack of market makers.)

Nobody has to say what they think you think. We already know what you think, because you have told us explicitly and emphatically: you think that "The question was straightforward...".

As far as I can tell, the only way that what you have already told us you think can be true is that either 1) you are grossly mistaken about what a good answer to the question looks like, or 2) you are spot on that the answer to the question is straightforward, I am grossly mistaken, and therefore your grasp of the territory is vastly superior to my own. (For the avoidance of doubt, note the asymmetry. If you grasp the simplicity where I can't manage to find anything but complexity, then I must be clueless. By contrast, if you are mistaken in your grasp of simplicity, then that implies nothing about me: I could still be clueless.)


Absolutely correct. I can peruse historical graphs of difficulty, total network power, and BTC vs. USD, and I can also read prognostications about how many terashashes are about to hit the network; anybody can do those things, so if you're looking for me to restate the obvious, you've come to the wrong place. If you're looking for someone who knows what the future will be, you've also come to the wrong place. And if you're looking for me to offer you a step by step introduction to the risks of shorting Bitcoin to acquire fiat-denominated mining hardware, then once more you've come to the wrong place.


I have no idea how it is that you think I have poked fun at you, but for any misunderstanding I may have created that led you to infer that, I certainly do apologise.

In any case, I would strongly recommend that you do not participate in any fund where you believe the fund manager's grasp of the territory is so flawed and inadequate.


This is grossly mistaken. Let's assume for the sake of argument that taking a long position in mining is going to lose money; then, skipping over borrowing costs for the sake of simplicity, it is straightforward to make money -- not lose it -- by taking a short position in mining. Even if you had a perfectly functioning crystal ball telling you the future of mining, you cannot have any idea whatsoever whether a fund is going to win, lose, or break even on exposure to mining unless you know what kind of exposure it is.

You say that you don't care too much about hedges and derivatives, and you seem happy to ignore the difference between a long and a short position -- now sweeping the entire distinction under the carpet by switching to talk of investing in mining rather than the original topic, which was taking a position in mining. That provides one strategy for taking a complex topic and turning it into something "straightforward", but doing so moves the discussion far away from the realities of the Bitcoin economy, not to mention the fundamentals of investing.

EDIT: Updated with a parenthetical on asymmetry, lest I be accused again of poking fun at anyone.

Glad to be of service, but I can't really take credit; it's paraphrased from comments levelled at other people by one of our rather colourful colleagues here on the forum...

The listing document, my earlier comments, and the 2000-word article left you unclear about my thinking on the topic; you still believe that the original question is straightforward; and now, apparently, you even believe that a "long term position" and a "long position" are interchangeable. You also suggest that I am now trying to avoid your question, and that had I merely taken the time for "answering it properly", I would have been able to prove to you how deeply I understand Bitcoin economics.

As I indicated in the listing document, I have no intention of attempting to prove anything to anyone. Given the superior grasp of Bitcoin economics which you have asserted for yourself, the most important question has been answered: you should not participate in the fund.

(Clearly you believe your grasp of Bitcoin economics must be far superior to my own, since I have already indicated why I do not find it straightforward to analyse the Bitcoin-demoninated NPV of a Bitcoin-denominated revenue stream from sunk cost mining hardware, as contrasted with either ongoing partial reinvestment in fiat-denominated mining hardware via a Bitcoin-denominated revenue stream or a new purchase of fiat-denominated hardware. Nor do I find the question even to be intelligible, let alone straightforward, in the absence of specifying the form and duration a "long term position" might take and how it might be hedged -- a net short position, a net long position, or some variant in between -- both with respect to the mining operation itself and with respect to the value of BTC versus fiat and, if such hedging were available more efficiently, with respect to difficulty.)

Although your question seems very straightforward, it actually packs in quite a bit of complexity and subtlety. So, rather than trying to pin down a specific yes/no answer and coming up short on something the details of which depend very much on the specific business in question, I would point instead to the comments in the listing document itself which address mining. The document also links to a substantially longer discussion in a standalone article about direct investment in mining hardware, and last but not least there are some brief comments in my reply to Deprived earlier in this same thread.

Ah, I get it -- no problem at all.

Taking the second question first, ironically enough the change doesn't matter, as I had originally interpreted you to be asking about an exit strategy for the fund anyway, just specific to the mechanics of the exchange. (It was your question which prompted the addition of a sentence to the listing documents yesterday, intended to clarify how closure of the fund might be handled using the buyback facility of the exchange.) As I mentioned originally, I would not at this point envision passing the fund on to another manager but would instead envision closing it.

As for the first question, the superficial answer is simply excelling at the fund's stated goal of achieving capital growth denominated in Bitcoin. The deeper answer, though, is much more about adapting my thinking and strategies to the very limited environment of Bitcoin, where tools that folks take for granted in the fiat world just aren't available yet.

Many thanks for your support, Luckybit -- I appreciate it!

I'm pleased to say that as of this morning, the exchange has opened BTC Growth for peer review by moderators. This next step of the process -- attention from the moderators and their assessment of the listing submission -- will yield a decision as to whether the fund will be listed on the exchange.

Since I have no reliable means of gauging demand except for observing what happens if and when the exchange approves the fund, I can't really guess in advance how the process might progress. However, given the level of attention currently being focused on mining operations that will begin 'real soon now', I suspect that any worries about having too much capital to put to work will be quickly put to rest.


From the section headed "Subscriptions and Redemptions":

"When in operation, the subscription and redemption facility will be made available only for a relatively brief period following the publication of the fund's NAV, so as to preclude any incentive for the issuer either to issue or to re-purchase on the basis of knowledge about the fund's NAV which has not yet been made public. (While doing so might provide a short term benefit for existing participants in the fund, it would be contrary to the interests of new participants and thus would not serve the longer term development of the fund as a whole.)"

As to what "relatively brief period" might mean, that again will depend on overall demand and liquidity. If only a handful of shares are being traded, and the market price is slow to react to changes in NAV, that would be a different matter than if a speedy and liquid market brings prices in line with NAV quite quickly.


Yes, I really don't understand what seems to be a fixation on dividends rather than total returns. It is trivially easy to push out a whacking great big (but entirely unsustainable) dividend. Nor do I understand why it seems to be OK with so many would-be buyers of various assets when future dividend streams are linked to an entirely unquantified description of "profit". It is trivially easy to achieve no profit at all -- and therefore pay zero dividends -- simply by incurring new expenses (such as salaries, for example). Too often, IMHO, folks read "profit" but think "revenue" -- or else recognise the difference but think that they know how to get from revenue to profit, even when the issuer hasn't filled them in on any specifics. I'm not saying that all or even most folks do that, but it's hard to avoid the impression that many do.

The asset is now awaiting unlocking by the operators of the exchange, in preparation for attention from the moderators who serve as gatekeepers between submissions and listings.

Please see the section of the document headed "Initial Offering, Minimum Participation Level, and Fund Closure" and "Subscriptions and Redemptions" for more details on the release of shares.

I'm sure that governments can and will change their collective minds about how best to handle Bitcoin; rapid change in the Bitcoin landscape more generally is just something we should assume. However, this seems to me to be a larger and broader issue, rather than a being a concern which is specifically focused on this fund or that fund, this exchange or that exchange.