Great thesis... but, can you deny, that "big money" would be put off by a lack of clarity regulation-wise? Sure "big money" could buy into anything at anytime, your assertion that they could have bought in, and chose not to, is kinda limp, as you have implied yourself, and I can attest to from personal experience, in actual fact, serious money IS put off by regulatory issues, more than ANYTHING else!! businesses and investors do not like uncertainty, and there is a definite correlation between lack of regulation, and lack of backing by "serious" or "institutional" investors. To claim that is not the case is plain daft imo (and again, I am not guessing here.. I am talking from experience)
The gist of this argument seems to be that "big money" does not want to invest
now in raw bitcoins for fear of future regulations, but it would invest
now in bitcoin fund shares because future regulations will not affect them.
I do not quite see what regulatory risks could apply to companies investing in raw bitcoins, that would not apply also to companies investing in bitcoin fund shares, and on the funds temselves.
Suppose, for example, that some future regulation essentially forces Coinbase and all other "clean" exchanges to shut down, so that it becomes nearly impossible to trade raw bitcoins in an open market. Presumably the "bubble-packaged" bitcoins (fund shares) will remain tradeable on OTCQX, NASDAQ, and the like. But then the bitcoin funds themselves will no longer be able to trade their bitcoins in an open market. Whatever channel the funds will retain to do that (e.g. OTC trading), the large long-term investors should be able to use too. In that eventuality, raw bitcoins then would become low-liquidity assets like real estate or industrial installations. How could raw bitcoins lose value because of those restrictions, without the fund shares losing value too?
So I would think that "big money" presently does not want to invest in raw bitcoins
or in bitcoin fund shares, because it sees
both as bad investments, with considerable risk (including, but not only, the risk of both being hit by future regulatory changes), and without any solid fundamentals or potential market that could justify an expectation of rising prices. On the contrary, this expectation is entirely based on the hope that 'big money' will start investing in bitcoin; but, if such a "circular" demand could lift the price of bitcoin, it could lift the price of any penny stock.
The thing is , and what I disagree with you on Jorge, is you seem to have this picture that investors, who are in a position to make meaningful investments in BTC, only do so essentially "to make money from the greater fools " and I put it to you, that actually, if all they wanted to do is earn a "few bucks" by scamming a few newbies, then in actual fact they have many many MANY FAR less riskier ventures that they could earn them a decent, and far far less riskier and easier return from far larger and more understood markets, than being involved with BTC. So ergo, most investors that are involved in BTC are not just involved to make a few bucks in a "risky" as fuck and uncertain market.. sure you could argue that they saw an opportunity and leveraged funds to make a quick and "easy" profit , but if they have the money to enter the BTC market, then they have the money to enter all sorts of other ventures, with a fraction of the risk, and perfectly decent returns. Go figure.
I would not say that all big investors are explicitly aiming to make money out of "greater fools", but they are generally indifferent to that possibility,
provided that the profits are reasonably likely.
For example, if some 'big money' had predicted the evolution of gold prices 15 years ago, it would surely buy a lot just before the bubble, and sell everything at the peak, with no moral scruples -- while knowing well that its profit would come entirely from the loss of the "greater fools" who bought at the peak.
That said, I did not get your point in the above paragraph. Do you mean that there is 'big money' that would invest in BTC for the long run, hoping for its lasting success, rather than for sort-term speculation -- if there was no risk? I can believe there is such money, but I cannot see how it could see bitcoin as "too risky" without seeing bitcoin funds in the same way.
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