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Author Topic: Will The Bitcoin Investment Trust affect the price?  (Read 16581 times)
HeliKopterBen
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September 26, 2013, 02:03:26 PM
 #61

This is just a way for the big boys to frontrun the average joe before the ETF comes out.  However, the early adopters frontran them all. 

Counterfeit:  made in imitation of something else with intent to deceive:  merriam-webster
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September 26, 2013, 02:47:57 PM
 #62

This is how it works, The fund has already bought all the coins it is going to buy, As they sell more shares the fraction of coin represented by each share gets gradually smaller. People who buy this fund will not buy Bitcoin directly, that is the reason they buy this fund, so they don't have to dirty their hands with it.

that sounds wrong, each share must be equal to one another no? this fund will always only be ~1700BTC again sound really wrong, the min investment in 25K....

I would think the fund will grow to wtv size it can accommodate and then in about 9 months Huh they will have a BIT market which should track very closely the bitcoin price, adding a good deal of liquidity to the over all bitcoin market.

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September 26, 2013, 02:51:54 PM
 #63

This is how it works, The fund has already bought all the coins it is going to buy, As they sell more shares the fraction of coin represented by each share gets gradually smaller. People who buy this fund will not buy Bitcoin directly, that is the reason they buy this fund, so they don't have to dirty their hands with it.

that sounds wrong, each share must be equal to one another no? this fund will always only be ~1700BTC again sound really wrong, the min investment in 25K....

I would think the fund will grow to wtv size it can accommodate and then in about 9 months Huh they will have a BIT market which should track very closely the bitcoin price, adding a good deal of liquidity to the over all bitcoin market.

it is wrong. Each share is .1 btc. It was intially capitalized with $2.25million of secondmarkets money. It will grow according to demand
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September 26, 2013, 02:52:54 PM
 #64

This is how it works, The fund has already bought all the coins it is going to buy, As they sell more shares the fraction of coin represented by each share gets gradually smaller. People who buy this fund will not buy Bitcoin directly, that is the reason they buy this fund, so they don't have to dirty their hands with it.

Why do people have to have an opinion on topics that escapes them is beyond me.

Sorry, but you're totally clueless in this matter. The $2 million worth of Bitcoin is just seed money. Read the prospectus. It's modeled after GLD. As money comes pouring in, the trust will keep buying bitcoins.


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FNG
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September 26, 2013, 02:56:10 PM
 #65

cypherdoc
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September 26, 2013, 03:12:09 PM
 #66

The big news is that secondmarket has launched "Bitcoin Investment Trust"   http://www.bitcointrust.co/    also see https://www.secondmarket.com/education/learn/bitcoin-education-center

Quote

The Bitcoin Investment Trust (BIT) is a private, open-ended trust that is invested exclusively in bitcoin and derives its value solely from the price of bitcoin. It enables investors to gain exposure to the price movement of bitcoin without the challenges of buying, storing, and safekeeping bitcoins.


So let's speculate, will price be affected? by how much? and why?


This is how it works.

1. Price tenfolds when everyone thought it wouldn't happen anymore/yet.

2. After it happened ten times more people/businesses got interested and take baby steps but expect tenfolding to happen soon again.

3. go back to 1.


Where are we?

$100,000/BTC?

B&H
cypherdoc
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September 26, 2013, 03:18:26 PM
 #67

I'll be surprised if this trust has any affect at all. Unlike an ETF, you have to be accredited to invest. Second Market isn't a huge company and they don't have a huge investor base.

What is your definition of huge? They've sold $billions worth of securities..

The bitcoin market is extremely tight..if they are able to gather as little as $20 mil it will greatly affect the price.

Of course. Market cap of whole bitcoin market is peanuts really. Merely $1.5billion. Lots of lame no one gives a shit corpos listed on Nasdaq have much higher market cap.

Facebook has $120 billion market cap, Twitter probably half of that. Secondmarket offered early access to investors in both Facebook and Twitter.

So imagine what would few billions, which is nothing on Wall Street, mean to the Bitcoin price.

Keep in mind this fund is featured on Secondmarket, being their top investment opportunity at the moment. They even have a special Bitcoin tutorial section on their website.

This guy is a major Secondmarket shareholder and board director http://www.forbes.com/sites/stevenbertoni/2011/11/02/secondmarket-valued-at-200-million-after-investment-by-former-facebook-exec/ and one of the guys calling the shots. Guy is super hyped when it comes to Bitcoin http://www.youtube.com/watch?v=BJW1stK-NRI

nice link:

"Palihapitiya is the latest in series of high profile VC’s to plough cash into SecondMarket. Silbert has already attracted investments from Lawrence Lenihan of FirstMark Capital, New Enterprise Associates, SVB Financial Group,  Hong Kong billionaire Li Ka-shing and Singapore’s Temasek Holdings."

now we know what stimulated the interest in Bitcoin.  Palihapitiya is already on the Bitcoin rocket. 

now just draw links btwn the other names in that paragraph and you can see who else is coming.
RationalSpeculator
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September 26, 2013, 03:19:17 PM
 #68

The big news is that secondmarket has launched "Bitcoin Investment Trust"   http://www.bitcointrust.co/    also see https://www.secondmarket.com/education/learn/bitcoin-education-center

Quote

The Bitcoin Investment Trust (BIT) is a private, open-ended trust that is invested exclusively in bitcoin and derives its value solely from the price of bitcoin. It enables investors to gain exposure to the price movement of bitcoin without the challenges of buying, storing, and safekeeping bitcoins.


So let's speculate, will price be affected? by how much? and why?


This is how it works.

1. Price tenfolds when everyone thought it wouldn't happen anymore/yet.

2. After it happened ten times more people/businesses got interested and take baby steps but expect tenfolding to happen soon again.

3. go back to 1.


Where are we?

$100,000/BTC?

B&H

Sorry, not an option.  Grin

Try again Wink

1 or 2 ?
nobbynobbynoob
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September 26, 2013, 03:48:41 PM
 #69

Sorry, not an option.  Grin

Try again Wink

1 or 2 ?

Still at 2 methinks, but no idea for how much longer to wait before return to 1. Grin

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RationalSpeculator
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September 26, 2013, 04:08:53 PM
 #70

Sorry, not an option.  Grin

Try again Wink

1 or 2 ?

Still at 2 methinks, but no idea for how much longer to wait before return to 1. Grin

I agree Smiley

I'm also not sure when we go back to 1.

It seems half the board is still in stage 2, the other half in stage 1. I think there still needs to shift a bunch form 2 to 1.
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September 26, 2013, 04:27:18 PM
 #71

The price development story here is not the effect that purchasing for this fund will have, but the opening of more funds like this and other derivative instruments. The affect on price will happen on a much longer timeline than many of you are thinking.

perhaps.

but this announcement really should be looked at as the 2nd fund to announce this strategy next to Winklevii.

it's possible that "speculation" could result in a sooner ramp than you think.  especially since we've had this nice long consolidation period of 5-6 months now. 

charts are looking primed.
hmmmstrange
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September 26, 2013, 04:42:03 PM
 #72

Does anyone know offhand if I can use secondmarket as a trust for a self directed IRA?
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September 26, 2013, 04:43:42 PM
 #73

Does anyone know offhand if I can use secondmarket as a trust for a self directed IRA?

i've been thinking the same thing.
Herp
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September 26, 2013, 05:00:46 PM
 #74

The price development story here is not the effect that purchasing for this fund will have, but the opening of more funds like this and other derivative instruments. The affect on price will happen on a much longer timeline than many of you are thinking.

perhaps.

but this announcement really should be looked at as the 2nd fund to announce this strategy next to Winklevii.

it's possible that "speculation" could result in a sooner ramp than you think.  especially since we've had this nice long consolidation period of 5-6 months now.  

charts are looking primed.

Chance Bitcoin price will skyrocket is very high and it's all because the reputation SecondMarket has and it's client base of rich customers.

Reuter's Felix Salmon is no a friend of Bitcoin. He mocked Bitcoin from day one, however, he makes some interesting points which give clear evidence on why SecondMarket will attract lots of cash for this Bitcoin trust.

http://blogs.reuters.com/felix-salmon/2013/09/26/the-bitcoin-bug-bites-secondmarket/

Quote
The problem is that SecondMarket isn’t just a service for issuers and investors. It has also, of late, become a lead-generation engine — or, to put it another way, a mechanism for selling schmucks to wolves. SecondMarket has contact details for a very large number of accredited investors, many of whom trust the company and the reputational capital it has built up over the years. If you send enough of those investors investment pitches for diamond funds, or art funds, or space-based vaporware, the sillier among them will bite. And, eventually, regret doing so. SecondMarket’s investor list is a valuable thing, but the company isn’t behaving in the manner that you’d expect of an owner of something precious and valuable. Instead, it seems to be happy renting its list out to just about anybody.


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cypherdoc
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September 26, 2013, 05:05:47 PM
 #75

The price development story here is not the effect that purchasing for this fund will have, but the opening of more funds like this and other derivative instruments. The affect on price will happen on a much longer timeline than many of you are thinking.

perhaps.

but this announcement really should be looked at as the 2nd fund to announce this strategy next to Winklevii.

it's possible that "speculation" could result in a sooner ramp than you think.  especially since we've had this nice long consolidation period of 5-6 months now.  

charts are looking primed.

Chance Bitcoin price will skyrocket is very high and it's all because the reputation SecondMarket has and it's client base of rich customers.

Reuter's Felix Salmon is no a friend of Bitcoin. He mocked Bitcoin from day one, however, he makes some interesting points which give clear evidence on why SecondMarket will attract lots of cash for this Bitcoin trust.

http://blogs.reuters.com/felix-salmon/2013/09/26/the-bitcoin-bug-bites-secondmarket/

Quote
The problem is that SecondMarket isn’t just a service for issuers and investors. It has also, of late, become a lead-generation engine — or, to put it another way, a mechanism for selling schmucks to wolves. SecondMarket has contact details for a very large number of accredited investors, many of whom trust the company and the reputational capital it has built up over the years. If you send enough of those investors investment pitches for diamond funds, or art funds, or space-based vaporware, the sillier among them will bite. And, eventually, regret doing so. SecondMarket’s investor list is a valuable thing, but the company isn’t behaving in the manner that you’d expect of an owner of something precious and valuable. Instead, it seems to be happy renting its list out to just about anybody.

Attracting buyers for the trust != attracting buyers of Bitcoin.

Firewall works both ways.

this is true but the same could be said of GLD and SLV both of which helped ignite/perpetuate the gold/silver bull.
rolling
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September 26, 2013, 05:19:00 PM
 #76

The price development story here is not the effect that purchasing for this fund will have, but the opening of more funds like this and other derivative instruments. The affect on price will happen on a much longer timeline than many of you are thinking.

perhaps.

but this announcement really should be looked at as the 2nd fund to announce this strategy next to Winklevii.

it's possible that "speculation" could result in a sooner ramp than you think.  especially since we've had this nice long consolidation period of 5-6 months now. 

charts are looking primed.

I will concede only that what is not known is not priced in. What is known, most importantly, what is known by the 'smart money' is already priced in.

And I beg to differ that these are equivalent strategies. The ETF will be trading in and out of Bitcoin—that is, whenever they have a reliable means to do so. But the trust will not. People will be trading in and out of the trust, but it will be a limited pool of coins that won't change substantially. They have stated that initially each share would represent .1 Bitcoin, and that this would slowly go down over time as they fractionalize the shares.

You are wrong, they said they will take their expenses out of the .1 but they did not say that new investors would dilute the initial investors holdings of Bitcoin.  They will buy .1 Bitcoin for each share in the fund which will be diluted by expenses.

http://www.coindesk.com/secondmarket-launches-bitcoin-investment-trust-invests-2-million/

Quote
Initially, each BIT share will represent 0.1 bitcoins, but the trust will not generate any income and will regularly sell/distribute bitcoins to pay for on-going expenses, so the amount of bitcoin represented by each share will gradually decline over time.
Herp
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September 26, 2013, 05:30:18 PM
 #77

Choupacabra embarrassed himself and proved how clueless he is when making this statement few posts earlier:

Quote
"This is how it works, The fund has already bought all the coins it is going to buy,"

My grandfather had a saying:
Quote
"It's wise to STFU after eating shit."


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[E]ncrypted & secure
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rampantparanoia
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September 26, 2013, 05:33:20 PM
 #78


cypherdoc
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September 26, 2013, 05:40:30 PM
 #79

The price development story here is not the effect that purchasing for this fund will have, but the opening of more funds like this and other derivative instruments. The affect on price will happen on a much longer timeline than many of you are thinking.

perhaps.

but this announcement really should be looked at as the 2nd fund to announce this strategy next to Winklevii.

it's possible that "speculation" could result in a sooner ramp than you think.  especially since we've had this nice long consolidation period of 5-6 months now.  

charts are looking primed.

Chance Bitcoin price will skyrocket is very high and it's all because the reputation SecondMarket has and it's client base of rich customers.

Reuter's Felix Salmon is no a friend of Bitcoin. He mocked Bitcoin from day one, however, he makes some interesting points which give clear evidence on why SecondMarket will attract lots of cash for this Bitcoin trust.

http://blogs.reuters.com/felix-salmon/2013/09/26/the-bitcoin-bug-bites-secondmarket/

Quote
The problem is that SecondMarket isn’t just a service for issuers and investors. It has also, of late, become a lead-generation engine — or, to put it another way, a mechanism for selling schmucks to wolves. SecondMarket has contact details for a very large number of accredited investors, many of whom trust the company and the reputational capital it has built up over the years. If you send enough of those investors investment pitches for diamond funds, or art funds, or space-based vaporware, the sillier among them will bite. And, eventually, regret doing so. SecondMarket’s investor list is a valuable thing, but the company isn’t behaving in the manner that you’d expect of an owner of something precious and valuable. Instead, it seems to be happy renting its list out to just about anybody.

Attracting buyers for the trust != attracting buyers of Bitcoin.

Firewall works both ways.

this is true but the same could be said of GLD and SLV both of which helped ignite/perpetuate the gold/silver bull.

How long did that take?

about 9 months:

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September 26, 2013, 05:47:09 PM
 #80


Quote
Initially, each BIT share will represent 0.1 bitcoins, but the trust will not generate any income and will regularly sell/distribute bitcoins to pay for on-going expenses, so the amount of bitcoin represented by each share will gradually decline over time.

It says it will do that only to cover ongoing expenses, not to make room for new investors. If more than 2mil wants in, they will have to buy more, which you said they wouldn't.

If I'm wrong, by all means fill me in.
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