Will The Bitcoin Investment Trust affect the price?

[World]

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.

WOW thx

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[msc]

based on that it looks to me like Chodpaba is correct in assuming there will not be an ongoing purchase of BTC.

It's an open-ended trust, which means ongoing purchases.  It doesn't matter too much either way.  Others will follow in their footsteps.

[HeliKopterBen]

I dont see any reason why the ETF should not be approved.  The SEC has approved many double and triple leveraged long and short ETFs for indices, precious metals, ect.  These ETFs are almost guaranteed to lose value over long periods of time, especially the inverse ETFs.  Bitcoin should be much safer. 

[QuestionAuthority]

Finally there's an investment vehicle on this forum that won't result in masses of people here losing all their Bitcoins because only a few can afford to invest in it.

[SheHadMANHands]

"Barry Silbert has been obsessed with Bitcoin. Obsessed. His priorities in life, he says, are ordered as such: his wife, his company, and Bitcoin. The crypo-currency is the first thing he has seen like it since the Internet.

Silbert has invested plenty of his own money into actual Bitcoins, which he’s purchased on Bitcoin exchange Mt. Gox. He’s also invested in 10 Bitcoin-related startups (and one fund) through his aptly named fund, The Bitcoin Opportunity Fund.

As of today, he’s taken it a step further, merging his second and third priorities. Today, he announced that his company, SecondMarket, which allows investors to buy and sell shares in private companies, will now allow investors to buy and sell shares in a Bitcoin trust.

Bitcoin Investment Trust launches as an open-ended private trust that invests exclusively in Bitcoin. The private fund is currently raising capital, and SecondMarket has kicked things off with a $2 million allocation. The Trust will operate as a subsidiary of SecondMarket.

The fund will allow people to invest in Bitcoin the same way they’d invest in gold or silver. In fact, Silbert said, the trust mimics the structure of Spider Gold Trust, the exchange traded fund (ETF) which invests exclusively in gold. These commodities trusts were the catalyst to making gold an investable asset class of its own, bringing gold investing to the masses.  (....)"


http://pandodaily.com/2013/09/25/secondmarket-goes-all-in-on-bitcoin-launching-a-private-trust/

i don´t get it: this is obviously a big thing to happen to bitcoin. despite all fears of becoming outlawed, despite unstable infrastructure, despite regulators hyperventilating, despite all the fud, despite of the "crash", despite of being complicated, despite of lacking uses in the real world -- here you have a guy like barry silbert putting his reputation and with it his multi-million $ company at stake since he seem to know that bitcoin IS big for which every bitcoin enthusiast should welcome him,  this forum is full of pessimistic farts acting in a similar way as the non-bitcoin educated folks/nay sayers always do when it comes discuss bitcoin ("scam, ponzi, no use, drugs, no intrinsic value...). if you are sooooo pessimistic about obvoiusly good news why don´t you simply put your energy and time into something you believe in ?i doubt that pessimism will help bitcoin to fly. i think enthusiasm will help more. if you are mad because you sold your 10 k bitcoins last year, it was clearly not happening because you were enthusi

sry 4 rant

Just saying.. but it would not be beyond the CIA to put agents on popular bitcoin forum boards in an attempt to drive the price down/crash bitcoin.

tinfoilhat.gif

[NewLiberty]

I dont see any reason why the ETF should not be approved.  The SEC has approved many double and triple leveraged long and short ETFs for indices, precious metals, ect.  These ETFs are almost guaranteed to lose value over long periods of time, especially the inverse ETFs.  Bitcoin should be much safer. 

There's no SEC S-1 filing for this.  It is a PRIVATE offering.

It may grow up into an ETF someday, but they get the first mover advantage for all of us accredited investors as we won't have to wait for Winklevoss ETF.
I don't know that it opens the door to the IRA investment yet, still researching that.

This is a good thing.
We who work with bitcoin, and use bitcoin or develop for it are not their market.  Not at all, but this opens a different market that most of us would not be interested in participating in because we do know how to do it ourselves and don't need what they are offering.

Consider your typical accredited investor.  We have tax lawyers keeping us safe and finding ways to do things the legal way, we have different types of investments, diversity is highly valued.  Using Second Market provides a tidy way for the tax lawyers and accountants to deal with the investment.

This helps to legitimize a bitcoin investment.  It puts in in the basket of FaceBook and Twitter.  So it is good for Bitcoin, generally.

They are not filing an S-1 with the SEC, but they are using boilerplate from the standard ETF filing.  The Winklevoss twins are forging ahead with that alone still. 
https://searchwww.sec.gov/EDGARFSClient/jsp/EDGAR_MainAccess.jsp?search_text=Bitcoin&sort=Date&formType=FormS1

There are dangers as well.  For example if this BIT fund ever DOES become the Bloomberg ticker for Bitcoin, if it becomes the default pricing mechanism for determining Bitcoin value, there are significant risks associated with that for Bitcoin generally. 

[User705]

Bloomberg already uses XBT.

link please.  Where are they pulling pricing data from?

[NewLiberty]

Bloomberg already uses XBT.

link please.  Where are they pulling pricing data from?

It's a Bloomberg internal ticker. When it was first reported it appeared to be using Gox data.
http://www.zerohedge.com/news/2013-08-10/bitcoin-now-officially-schrodinger-currency

Sure, X is what gets used in front of non government currencies.  Don't have to tell me that.
I even added that to the Wikipedia article on the ISO 4217 myself 
http://en.wikipedia.org/wiki/ISO_4217
XBT  isn't in the standard yet, but as it is in use (as well as XAG for silver and XAU for gold).
Goat was there with the assist by catching it and suggesting the 8 decimal designation.
My understanding is that the Litecoin Foundation is contemplating making use of XLT or LTC for some things.

The question is as user705 succinctly put it, from whence comes the pricing data.
Volume weighted averages are good because so much happens off the exchanges, which for a long time was dominated by Gox, but not so much at the moment.

I am struggling with this issue currently for my http://Http://coldhardca.sh (backing bitcoin with silver and gold) project.

[smoothie]

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.

This ^

[Adrian-x]

The question is as user705 succinctly put it, from whence comes the pricing data.
Volume weighted averages are good because so much happens off the exchanges, which for a long time was dominated by Gox, but not so much at the moment.

I am struggling with this issue currently for my http://Http://coldhardca.sh (backing bitcoin with silver and gold) project.

http://www.coindesk.com/price/ Has a nice API and some agreeable rules for defining the BPI (Bitcoin price index)

[GreenBits]

Angry Birds maker Rovio has a market cap of around $6-7 billion ffs People need to put this in context a bit. This is f... Angry birds we're talking about not a revolutionary payment system and store of value that can revolutionize the world.  
http://www.dailymail.co.uk/sciencetech/article-2141123/Angry-Birds-creators-float-stock-market-5-5-BILLION-puzzle-game-hits-200-million-users-month.html

angry birds is bigger than bitcoin ?

-what if angry birds gets outlawed, regulated ?
-is angry bird really anoymous ?
-will there ever be more than 21 mill angry birds ?
-only criminals are using angry birds for drugs, money laundering, etc.
-angry birds must be a ponzi scheme
-my grandma will never play angry birds
-what is the intrinsic value of an angry bird ?

i ha'd, paused, and ha'd again

but on topic, i think the Winklevii offering will get red taped until regulators have had a better time to feel out/define the BTCspace. The SecondMarket offering does move this process along a few years, will give empirical evidence to guide regulation in the future hopefully..

[SheHadMANHands]

and here we go up !     

[msc]

and here we go up !     

Chart looks beautiful.

[NewLiberty]

The question is as user705 succinctly put it, from whence comes the pricing data.
Volume weighted averages are good because so much happens off the exchanges, which for a long time was dominated by Gox, but not so much at the moment.

I am struggling with this issue currently for my http://Http://coldhardca.sh (backing bitcoin with silver and gold) project.

http://www.coindesk.com/price/ Has a nice API and some agreeable rules for defining the BPI (Bitcoin price index)

I'd reviewed that, and am still looking.  Arbitrary rules give a political smell which tends to wrinkle my nose.  Either that or their list in (i) is just an attempt to make it very easy for them.
It looks specifically designed to remove MtGox?  I just don't think it is what I seek.

Simple price and volume math based on clean data from as many different sources without excluding so many of where the volume is would be ideal.
I don't see a clear reason not to bring in Localbitcoin, Gox and all the smaller and country specific exchanges as well.

[FNG]

"Mark Murphy, a SecondMarket spokesman, said the fund had heard from financial professionals, technology figures, gold enthusiasts and others.

“There’s really high interest,” said Murphy, who said there is no goal as far as the size of the fund."

http://www.rawstory.com/rs/2013/09/26/new-investment-venture-targets-1-5-billion-bitcoin-market/

[QuestionAuthority]

Finally there's an investment vehicle on this forum that won't result in masses of people here losing all their Bitcoins because only a few can afford to invest in it.

Dude, it's only been a day or two. Don't worry some bright scam artist entrepreneur will offer a pass-through. Then everyone can join in the fun of losing all their bitcoins!

No worries there. A pass-through can't work because dirt poor redneck Texas wife-beaters can't qualify for the trust. 

[rampantparanoia]

Dude, it's only been a day or two. Don't worry some bright scam artist entrepreneur will offer a pass-through. Then everyone can join in the fun of losing all their bitcoins!

No worries there. A pass-through can't work because dirt poor redneck Texas wife-beaters can't qualify for the trust. 

...may want to reevaluate your criteria for defining someone as "bright"

[bobdude17]

Dude, it's only been a day or two. Don't worry some bright scam artist entrepreneur will offer a pass-through. Then everyone can join in the fun of losing all their bitcoins!

No worries there. A pass-through can't work because dirt poor redneck Texas wife-beaters can't qualify for the trust. 

...may want to reevaluate your criteria for defining someone as "bright"

 

[bitcodo]

So we have all those trusts and funds; and they will grow and new will arrive. They will accumulate bitcoins. So no bitcoins left for real use. No real economy. And .... bitcoins will be worth 0.

[NewLiberty]

So we have all those trusts and funds; and they will grow and new will arrive. They will accumulate bitcoins. So no bitcoins left for real use. No real economy. And .... bitcoins will be worth 0.

The calculation is off... the investors are buying bitcoin yes, but the investing fund sells the underlying asset (bitcoins) at a trickle to pay its costs.  The buyers are not buying bitcoins per se, they are buying an investment vehicle, and the fund buys bitcoin with most of the money that the investors give them.

Essentially these funds create faucets of bitcoin and increase the price of bitcoins in the process.  Their investors pay for the privilege of doing this.