[BTC-TC and BF] MININGCO.ETF - Closed

[Carnth]

I was looking to invest in some mining stuff and I think that doing it through this fund could be a nice option. I will give it a try.

BTW, I'm already a bitfunder user, I have some assets there and feel confident with the site. While opening an account in btctc should not be a big problem for me I would prefer using bitfunder right now. If I understood well, this have a penalty of 1% because of the bitfunder commisions. Am I right or it has any other penaltys among of that ?

Your are correct.

BitFunder has a pass-through, which I also operate. https://bitfunder.com/asset/MININGCO

The pass-through shares will be sold about 1% higher than MiningCo.ETF because BitFunder charges 1% fees to the seller of a share.
100% of MiningCo.ETF dividends will be paid to the pass-through shares less Bitcoin network transaction fees.

[Carnth]

One thing that scares me:
The dividends are getting lower in each pay out. At the current level of dividends it represents a 7% yearly which seems very low. I know that in the future this will depend of the rentability of the underlying assets, which relys in serveral things like new mining hardware, difficulty, BTC/$ parity etc...

You are correct. Dividends have continued to decrease. Let me explain...

Future Outlook - My guess as to what's to come.

Just about all companies are holding off on purchasing new equipment, except for ASIC devices. Until ASIC devices are in the hands of mining companies, dividends from them will continue to wane.

All the mining companies in the fund have ASIC devices on order. Since ASCIMINER and a few other lucky individuals already have ASIC devices in their hands, dividends from the underlying companies will continue to decrease. Once the ASIC devices are in the hand of the mining companies, our dividends will increase.

Do you have any prediction about the rentability of the fund in the next 12 months or so ?

No.
But we can look at it this way:
Mining dividends are always based on how much of the total hashing power of the entire network the company has.
There are about 144 blocks mined per day... about 3600 BTC per day (at 25 per block). That's it. Even if there were a billion TH on the network, all that would be mined in a day is still about 3600 BTC.
If company X has 0.5% of the total hashing power, they make 18 BTC per day.. on average.
Since ASICMINER and a few other ASIC devices have increased the overall network hashing power while the mining companies' hash rate have stayed the same, the dividends are getting smaller. Because their hashing power--compared to the entire network is getting smaller.
Just as an example (not based on any calculations) now company X would have 0.15% of the total network hashing power and make only 5.4 BTC per day. Again this is just an example. I made no calculations.

Once the mining companies have their ASIC devices mining, their hashing power will once again increase and "take back" some of the overall hashing power that they lost.

Congnative lowered their dividend by 50%, and ~20% of the fund in made up of that 1 asset, so it is reflective.

This has decreased the overall dividend that the fund pays. But at the same time, this will allow Cognitive to purchase new hashing power in the future. Making sure that they will not continue to lose overall hashing power and the entire network grows.

[miTgiB]

Congnative lowered their dividend by 50%, and ~20% of the fund in made up of that 1 asset, so it is reflective.

This has decreased the overall dividend that the fund pays. But at the same time, this will allow Cognitive to purchase new hashing power in the future. Making sure that they will not continue to lose overall hashing power and the entire network grows.

While true, it is not clear to me how the new non-voting shares help current holders with this reduction.  I see it as a double dip.  I see now as a time to liquidate Congnative while it has some value, as the non-voting shares will further dillute the float when ASIC units come online.  Add in the 50% reduction to be used for the same purpose as the non-voting shares which become voting shares when ASIC units are purchased.

[Carnth]

Total dividends of 0.11987888 (management fee included) will be paid this week.

This week, All underlying assets remained relatively stable, accept for Nasty Fans which has jumped to an average of .32 this week (from .29).
This has caused the NAV per share to increase to BTC0.58.

Future Outlook - My guess as to what's to come.

The recent difficulty increase has been caused by the lucky few who are already mining with their ASIC devices. This has continued to hurt our dividend income.
It all comes down to when the ASICs arrive.



MiningCo.ETF is available on BTCT.co and as a pass-through on BitFunder.

[BitcoinMint.US]

The fund is performing nicely so far.

[Carnth]

Total dividends of 0.10828914 (management fee included) will be paid this week.
Dividends may be paid an hour off due to Daylight Saving/Summer Time.



This week, all underlying assets except GMP have taken a hit. Nasty Fans has dipped to .30; bASIC-MINING has lowered to .34; and COGNITIVE has dropped to .21 for the last 7 day averages.

This has caused the NAV per share to lower to BTC0.55.



Future Outlook - My guess as to what's to come.

The recent jump in price of BTC vs USD has weighed on the share prices.

The continual arrival of ASIC devices is slowly chewing away at the current mining companies' profits--this is causing the lower dividends.
As such, investors have started to move elsewhere (such as ASCIMINER and its pass-throughs)--this causes the lower price.


I can't give advice about buying or selling shares; but all of the underlying assets in MiningCo.ETF have ASIC devices on order. It's only a matter of time.



MiningCo.ETF is available on BTCT.co and as a pass-through on BitFunder.

[zx9r]

Would it be possible to add ASICMINER shares to the underlying assets ?

I think that the current ASICMINER market price is a bit high at 0.7-0.8 but may be it is possible to buy a bulk at a better price (may be 0.5)

[Carnth]

Would it be possible to add ASICMINER shares to the underlying assets ?

ASCIMINER is not a mining company.
Actually, Bitfountain is a ASIC equipment manufacturer that just happens to be mining using the equipment they make.*

It would be like if Whirlpool (who makes kitchen appliances) made bread makers and used them to sell bread.


As such, they are not a mining company and don't conform to the asset contract.


*Anyone, please correct me if I'm wrong.

[🏰 TradeFortress 🏰]

They are in the mining sector through.

[zx9r]

Would it be possible to add ASICMINER shares to the underlying assets ?

ASCIMINER is not a mining company.
Actually, Bitfountain is a ASIC equipment manufacturer that just happens to be mining using the equipment they make.*

It would be like if Whirlpool (who makes kitchen appliances) made bread makers and used them to sell bread.


As such, they are not a mining company and don't conform to the asset contract.


*Anyone, please correct me if I'm wrong.

I totally disagree, as far as I kwow ASICMINER es THE mining company right now. There is not any other mining company with a haspower greater than ASICMINER at this moment (soon they will reach the 50 Thash/s) Also they are paying mining dividends higher than any other. They build their own hardware to mine but that can only be a positive thing in my opinion.

[VJain]

*Anyone, please correct me if I'm wrong.

ASIC manufactures sell devices to miners. We are both an ASIC manufacture and a miner. Does this make us less useful and more evil than both?

This help at all?

ie - they are both a manufacturing company AND a mining company.

If this is too "vague". I'd like to propose a motion to amend the contract to allow for this type of entity.

[Carnth]

They are in the mining sector through.

I totally disagree, as far as I kwow ASICMINER es THE mining company right now.

OK. I hear you loud and clear!

I'd like to propose a motion to amend the contract to allow for this type of entity.

This is a great idea.

How does this look for the motion:


Motion to change the asset contract.

Motion summary:
Removal of the clauses that requires mining equipment to be owned by the shareholders.
This will allow the inclusion of additional mining companies (such as ASICMINER) into the fund.
Enhanced HTML formatting will allow for easier readability by adding bold, italics, and proper word-wrapping.


Motion Changes:

Change this sentence from the paragraph "Summary"
From: "MININGCO.ETF is an Exchange Traded Fund that holds assets that are invested in mining Bitcoins where mining equipment is owned by the shareholders."

To: "MININGCO.ETF is an Exchange Traded Fund that holds assets that are invested in mining Bitcoins."

--

Remove from the paragraph "Assets to be included," the following clause: "Only mining assets where equipment is owned by the shareholders will be included in the fund."

--

Change this sentence from the "Executive Summary" on the asset details page
From: "Only mining companies where the shareholders own the equipment are included."

To: "Only mining companies are included."

--

Remove from the the "Business Description" on the asset details page, the following clause: "Only mining assets where equipment is owned by the shareholders will be included in the fund."

--

Allow the asset contract to be updated with enhanced html formatting, a feature of BTC-TC that was implemented after this asset was created.

[Deprived]

Not sure why you need a contract change at all.  ASICMINER shareholders own the company.  Therefore they own any mining gear owned by the company.  Only reason why ASICMINER wouldn't be valid under contract contract is if the contract were interpreted as meaning you'd invest only in companies that only mined.  But that's not what contract says - so as far as I can see you can invest in ANY company that has mining as part of its activities AND where the company is owned by shareholders (i.e. no bonds).

[zx9r]

Not sure why you need a contract change at all.  ASICMINER shareholders own the company.  Therefore they own any mining gear owned by the company.  Only reason why ASICMINER wouldn't be valid under contract contract is if the contract were interpreted as meaning you'd invest only in companies that only mined.  But that's not what contract says - so as far as I can see you can invest in ANY company that has mining as part of its activities AND where the company is owned by shareholders (i.e. no bonds).

+1

[🏰 TradeFortress 🏰]

It could be that the "30MH/s per share" estimates made some people think it was a PMB?

[Carnth]

Total dividends of 0.12953689 (management fee included) will be paid this week.


This week, Cognitive has been hit hard by the release of COG.F.

This has caused the NAV per share to lower to BTC0.54.



Future Outlook - My guess as to what's to come and my opinions.

The high price of price of BTC vs USD  still weighs on the share prices. This will probably be the new norm.

Nasty Fans and bASIC-MINING are doing a great job with dividends despite the increasing difficulty. The downward trend of dividends was stopped thanks to them.

I will be looking to add ASCIMINER to the fund. But I fear that buying in now will be buying in at the highest price. (Would love to hear your thoughts on this.)



MiningCo.ETF is available on BTCT.co and as a pass-through on BitFunder.

[zx9r]

I think that the current price of ASICMINER is overvalued at this moment. But I'm not an expert, should check the different topics about it in this forum.

[miTgiB]

Cost averaging ASICMINER shares is the only way in what this market is to insure exposure.  With as little liquidity as there is as a whole, I would not suggest anything more than several investments over a drawn out period.  The fund cannot really afford a large investment anyway without an influx of additional capitol.

[Carnth]

I think that the current price of ASICMINER is overvalued at this moment.

I agree. I would still like more opinions on the current cost of ASCIMINER.
I am very curious to see what the price of ASCIMINER we be when other companies get their ASIC devices mining.

Cost averaging ASICMINER shares is the only way in what this market is to insure exposure.  With as little liquidity as there is as a whole, I would not suggest anything more than several investments over a drawn out period.  The fund cannot really afford a large investment anyway without an influx of additional capitol.

This is true. Cost averaging is sound strategy.
It's also true that I don't keep a lot of BTC in the fund. I usually only keep enough in the fund to manage day-to-day stuff. The rest is used for underlying assets.



News Update:

GLARI Mining Project has gone into "Shareholder Protection Mode" in anticipation of starting to mine on Avalon ASIC devices.
As such, the share price of GMP is now 1.00 btc.

This has jumped the MiningCo.ETF NAV per share to BTC0.65

[zx9r]

News Update:

GLARI Mining Project has gone into "Shareholder Protection Mode" in anticipation of starting to mine on Avalon ASIC devices.
As such, the share price of GMP is now 1.00 btc.

This has jumped the MiningCo.ETF NAV per share to BTC0.65

I would like to suggest that when you make an update, write in another post instead of editing the last one. I follow the new posts in this topic and is impossible to follow editions of previous posts. I saw the increased price in btct and then came to this topic to see if something has changed but would be nicer to see it here before.