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Author Topic: Bitcoin ETF (Exchange Traded Fund)  (Read 3501 times)
EuSouBitcoin
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June 20, 2011, 01:26:07 PM
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Topic: Since bitcoin is a "virtual commodity", why not create a bitcoin exchange traded fund (ETF)? You could make 1 ETF share represent 1 BTC. If someone could successfully do this it would certainly help with regard to exchanging BTC for fiat currencies. Discuss amongst yourselves.
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dinzy
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June 20, 2011, 02:34:58 PM
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Since it's so easy, why not do it yourself?  Not that I have any idea how this would be any different.  ETFs own the stocks so in this case you would own a fraction of the bitcoins in the etf and this would differ from owning the bitcoins yourself how?  Or are you naively suggesting that someone could magically list a BTC fund on a legitimate stock exchange?

sorry to be such a prick, but I couldn't help myself
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June 22, 2011, 06:53:39 AM
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Topic: Since bitcoin is a "virtual commodity", why not create a bitcoin exchange traded fund (ETF)? You could make 1 ETF share represent 1 BTC. If someone could successfully do this it would certainly help with regard to exchanging BTC for fiat currencies. Discuss amongst yourselves.

One advantage (to us) would be that people could invest in BTC with their IRAs. This would help raise the price of btc. Not sure if it would work out well for the retirees, though.

I'm not sure, but I think there are minimum capital requirements. I think ETFs are considered hedge funds, which require $500,000. Now if early adopter were out there with 50k btc, they could probably start one up.

One final thing is that I think it might be hard to set a NAV since there are many different trading sites and btc is not very liquid.

I did find this book which was interesting. http://www.amazon.com/Create-Your-Hedge-Fund-Yourself/dp/0470138955  Not personally going to buy it.
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June 22, 2011, 09:45:29 AM
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The reason why ETFs are used is that they contain assets of a kind or mix that individual investors can't easily buy on their own. It is much easier for most people to buy a bitcoin than a share in an ETF, so there's no point in creating one.
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June 22, 2011, 05:42:52 PM
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Correct, Grinder.  Since ETFs are typically aggregated, they point at an index that details the collective movement.  But since BTC is an individual source, an ETF consisting solely of BTCs would be like investing directly in BTCs.

Not a miner.  An investor, speculator, and enthusiast.
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June 23, 2011, 12:27:48 AM
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Correct, Grinder.  Since ETFs are typically aggregated, they point at an index that details the collective movement.  But since BTC is an individual source, an ETF consisting solely of BTCs would be like investing directly in BTCs.

Typical isn't always, for example GLD. Or even better, FXY. Yeah you could just invest directly in yen, but people find ETF easier in a lot of cases. Hell in forex you get a 50:1 margin while in an ETF you get 4:1 at best. Don't forget the best reason to have a BTC ETF: a futures options market.
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