2013-07-16 Financial Times - Bitcoin ETF plan struggles to find support

[kiko]

http://www.ft.com/cms/s/0/1e187c88-eda2-11e2-8d7c-00144feabdc0.html

The article is mainly wall street gossip with no new info.  They do cagily confirm that the fund hasn't any (required) institutional partners yet. Essentially wall street wants nothing to do with bitcoin unless there is a risk-free way to skim off the top.

A person familiar with the proposed Bitcoin ETF, which still needs to be approved by the US securities watchdog, says the fund has yet to recruit authorised participants, or APs. A spokeswoman for the Winklevoss twins, Tyler and Cameron, declined to comment on the matter.
Authorised participants are essential to building the funds since they create and redeem the ETF shares, usually in exchange for baskets of the underlying securities, from the ETF sponsor.

“I don’t think we’re ever going to have a situation where everyone just decides we don’t want to make money,” says one AP who declined to be named. When it comes to the Bitcoin ETF, however, that moneymaking opportunity for Wall Street banks and trading firms is harder to find.

[PrintCoins]

I really don't understand the purpose. If someone wants to buy and sell bitcoins, they can do it directly and digitally. If the ETF is for bags of corn or tons of copper, those can't easily be bought and sold because of their physical attributes, but bitcoins don't have this limitation.

With all ETFs you need to verify that they have the goods and can secure them and won't be shut down and don't have sinister motivations (such as walking away with the cash). These two guys made their fortune from suing FB. It just seems like you are adding a layer of risk on top of an already risky "asset".

[meanig]

I really don't understand the purpose. If someone wants to buy and sell bitcoins, they can do it directly and digitally. If the ETF is for bags of corn or tons of copper, those can't easily be bought and sold because of their physical attributes, but bitcoins don't have this limitation.

With all ETFs you need to verify that they have the goods and can secure them and won't be shut down and don't have sinister motivations (such as walking away with the cash). These two guys made their fortune from suing FB. It just seems like you are adding a layer of risk on top of an already risky "asset".

Investment firms already have the legal and fiduciary frameworks in place for holding ETF shares. A bitcoin ETF will allow all the big funds to dip their toes into the Bitcoin market with minimal fuss and zero compliance issues.

[superduh]

401ks and so forth. it's for the legal framework for people to invest

[kjlimo]

401ks and so forth. it's for the legal framework for people to invest

This.  I can't wait to invest in bitcoins through my Roth IRA... that way when I'm a billionaire, I don't owe Uncle Sam a cent... and I can just live off my savings tax free for the rest of my life... legally powered by bitcoin!

[Kluge]

Essentially wall street wants nothing to do with bitcoin anything unless there is a risk-free way to skim off the top.

FTFY 

[Logik]

I really don't understand the purpose. If someone wants to buy and sell bitcoins, they can do it directly and digitally. If the ETF is for bags of corn or tons of copper, those can't easily be bought and sold because of their physical attributes, but bitcoins don't have this limitation.  

They do. What characterises buying bags of corn or tons of copper is that it's impractical, not that it's physical. For many people (in fact >99% of them) buying BTC is the same.

Now you might say that it's easy, but it's easy for you. A farmer would say buying bags of corn is easy. A copper smelter would say buying tons of copper is easy.. it's really about the majority of people not the minority.

[CurbsideProphet]

I really don't understand the purpose. If someone wants to buy and sell bitcoins, they can do it directly and digitally. If the ETF is for bags of corn or tons of copper, those can't easily be bought and sold because of their physical attributes, but bitcoins don't have this limitation.

With all ETFs you need to verify that they have the goods and can secure them and won't be shut down and don't have sinister motivations (such as walking away with the cash). These two guys made their fortune from suing FB. It just seems like you are adding a layer of risk on top of an already risky "asset".

They have ETFs for just about every major currency in the world so it isn't only about the difficulty of obtaining the underlying asset.  However, since they're trying to define Bitcoin as a commodity and not as a currency, I think they will be fighting an uphill battle.