Will The Bitcoin Investment Trust affect the price?

[Adrian-x]

Wow if you google "Bitcoin Investment Trust" in regular search you will see that like every news outlet on earth has picked this story up.

It's just too bad they are late to the party. Like by several months.

This is how people discover Bitcoin. First they think Bitcoin is a fad, then they see this EFT thing and say WTF is this why would anyone think of investing in it, it is crazy, cherishing the thought that it is just a stupid virtual cookie craze and they have already made good investment decisions. 

Then they may ask a few pertinent questions if the price goes up after they miss out and consider investing, at first some tread where no one has ever trod before and invest.

Meanwhile Barry Silbert doesn't buy any Bitcoin his investment has been priced in, he is just recouping his cost by selling the EFT, if there is demand (if and only when he has sold all 17,000 XBT worth of the trust,) he will look to sell shares and expand the XBT holdings. Then the party starts.

This process is the process that drives new coins in filling of your containers in your quantitative volume theory. You may know before anyone else knows what is happening, but news like this isn't news as such, it is news of a potential catalytic change in the available information. 

[windjc]

I fail to see why people think that the announcement for the eventual purchase of $2.5 mm of bitcoins over an unspecified period of Time will have any impact on the price of BTC?

It's not so much that the buying will inflate the price right away, but the fact that there's a regulated investment vehicle buying BTC is a major plus for BTC in terms of being accepted by banks and investors.  That will make it easier for people to exchange and spend.  

I don't doubt the thesis that this adds valuation to Bitcoin. I simply doubt the ability of this market as a whole to understand its own dynamic. I don't think the halving is completely priced in either. But we have not seen the last of the herky jerky nature of fluctuating demand resulting in overshoots/undershoots.

Of course. There is going to be major price fluctuation for years, or until enough people invest to liquidate the markets far beyond what they are now. Which is why each of these types of funds are important - by both potentially adding more liquidity and by simple/sheer PR.

Much of any investment's "value" is perceived. Gold is valuable because it is globally perceived to be. Same with real estate, etc.

So a lot of the transformation of bitcoin is the "breaking in" of the worlds psyche. That's where this game will be played for the next couple (several?) years. All the debate between all the "geniuses" out there about bitcoin good vs. bad, fade/future - it's all a part of coming to be accepted. Bitcoin has a much better chance of succeeding if it can solidify itself as a investment commodity than it does if it has to wait for its evolution into a viable currency.  The currency part will most likely take much much longer to become a viable global alternative.

[Herp]

Hmm... price at $140 on Mtgox. Seems the wheels are in motion.

[bobdude17]

I would kill for an update from Barry Silbert on how it's going so far.

[cypherdoc]

i'll tell you this much.  i'd cover if i were short.

the weekend is here.  the Dow is down.  again.  and now we have this uber bullish announcement of SM.  

it's likely the Wall St traders are going to be playing Bitcoin all weekend long.

and you know which way.

[notme]

Wow if you google "Bitcoin Investment Trust" in regular search you will see that like every news outlet on earth has picked this story up.

It's just too bad they are late to the party. Like by several months.

This is how people discover Bitcoin. First they think Bitcoin is a fad, then they see this EFT thing and say WTF is this why would anyone think of investing in it, it is crazy, cherishing the thought that it is just a stupid virtual cookie craze and they have already made good investment decisions. 

Then they may ask a few pertinent questions if the price goes up after they miss out and consider investing, at first some tread where no one has ever trod before and invest.

Meanwhile Barry Silbert doesn't buy any Bitcoin his investment has been priced in, he is just recouping his cost by selling the EFT, if there is demand (if and only when he has sold all 17,000 XBT worth of the trust,) he will look to sell shares and expand the XBT holdings. Then the party starts.

This process is the process that drives new coins in filling of your containers in your quantitative volume theory. You may know before anyone else knows what is happening, but news like this isn't news as such, it is news of a potential catalytic change in the available information. 

Oh, there will be another party alright. But by then most participants will be positioned incorrectly.

You mean like, the party that has already purchased over $2 million in bitcoins and announced they will be selling them soon might have to wait out a downturn before they see any interest?  Because some party sees the profit potential in selling off after the news has been absorbed (buyers have bought)?

In fact, the two parties might even be one and the same if they also have some personal bitcoin.

[bitcodo]

What  
Wall street playing?

I would kill for an update from Barry Silbert on how it's going so far.

He run out of black cartridge printing prospectus. Very bearish.

[uhoh]

What  
Wall street playing?

I would kill for an update from Barry Silbert on how it's going so far.

He run out of black cartridge printing prospectus. Very bearish.

 

[Adrian-x]

Oh, there will be another party alright. But by then most participants will be positioned incorrectly.

Well going back to your CIA suspicions and the Billion Dollar Bitcoin, I think I get it now, I'll reread it.
It looks to me that the function of the FED in Bitcoin Land has been effectively crowd sourced to speculators, and being on the correct side is all about managing the flow of XBT.
Effectively the Bitcoin flow is managed by the Speculators, if the 17,000 XBT in the trust was traded unnoticed, there are some speculators out of pocket or early miners who have cashed out.

[notme]

Oh, there will be another party alright. But by then most participants will be positioned incorrectly.

Well going back to your CIA suspicions and the Billion Dollar Bitcoin, I think I get it now, I'll reread it.
It looks to me that the function of the FED in Bitcoin Land has been effectively crowd sourced to speculators, and being on the correct side is all about managing the flow of XBT.
Effectively the Bitcoin flow is managed by the Speculators, if the 17,000 XBT in the trust was traded unnoticed, there are some speculators out of pocket or early miners who have cashed out.

Train chasers?

[SgtSpike]

I fail to see why people think that the announcement for the eventual purchase of $2.5 mm of bitcoins over an unspecified period of Time will have any impact on the price of BTC? It's not like they're saying that tomorrow they have to spend that much, they have the freedom to do so over days, weeks or months even. No matter how illiquid bitcoins are, those purchases spread over any period if time wint make an impact in a $1+ billion market cap commodity. And after that, they won't be buying any bitcoins at all. When new shares are created, it will be because an authorized participant contributed bitcoins for shares. And when shares are redeemed, all that will occur is that an authorized participant turned in their shares and redeemed them for bitcoins. Whether that person then sells their coins is not assured.

That's how etf's work (which is how this vehicle is described). If this were an open end Mutual fund, then each days purchases and withdrawals would be accompanied by the fund buying or selling bitcoins on an exchange. But that's specifically not what this investment vehicle is.

they already bought their initial batch of bitcoins.

but i still think price will move on this news.

Wow, they sold $2.25M of Bitcoin already?  Can you link the source?  How long did it take?  Have they sold any more beyond that, or are they waiting?

[wachtwoord]

I fail to see why people think that the announcement for the eventual purchase of $2.5 mm of bitcoins over an unspecified period of Time will have any impact on the price of BTC? It's not like they're saying that tomorrow they have to spend that much, they have the freedom to do so over days, weeks or months even. No matter how illiquid bitcoins are, those purchases spread over any period if time wint make an impact in a $1+ billion market cap commodity. And after that, they won't be buying any bitcoins at all. When new shares are created, it will be because an authorized participant contributed bitcoins for shares. And when shares are redeemed, all that will occur is that an authorized participant turned in their shares and redeemed them for bitcoins. Whether that person then sells their coins is not assured.

That's how etf's work (which is how this vehicle is described). If this were an open end Mutual fund, then each days purchases and withdrawals would be accompanied by the fund buying or selling bitcoins on an exchange. But that's specifically not what this investment vehicle is.

they already bought their initial batch of bitcoins.

but i still think price will move on this news.

Wow, they sold $2.25M of Bitcoin already?  Can you link the source?  How long did it take?  Have they sold any more beyond that, or are they waiting?

The bough $2.25M worth of Bitcoin (@$126 iirc) and this is the initial seeding of the fund. There are no updates about how much of it is sold to investors already.

[hmmmstrange]

I fail to see why people think that the announcement for the eventual purchase of $2.5 mm of bitcoins over an unspecified period of Time will have any impact on the price of BTC? It's not like they're saying that tomorrow they have to spend that much, they have the freedom to do so over days, weeks or months even. No matter how illiquid bitcoins are, those purchases spread over any period if time wint make an impact in a $1+ billion market cap commodity. And after that, they won't be buying any bitcoins at all. When new shares are created, it will be because an authorized participant contributed bitcoins for shares. And when shares are redeemed, all that will occur is that an authorized participant turned in their shares and redeemed them for bitcoins. Whether that person then sells their coins is not assured.

That's how etf's work (which is how this vehicle is described). If this were an open end Mutual fund, then each days purchases and withdrawals would be accompanied by the fund buying or selling bitcoins on an exchange. But that's specifically not what this investment vehicle is.

they already bought their initial batch of bitcoins.

but i still think price will move on this news.

How do you know "they" bought the bitcoins. It could very well be someone who had them who wanted to move them into an etf. I wouldn't be surprised if they were Keiser's coins that were traded for 1.75 million 250,000 shares of the BIT etf.

[wachtwoord]

I fail to see why people think that the announcement for the eventual purchase of $2.5 mm of bitcoins over an unspecified period of Time will have any impact on the price of BTC? It's not like they're saying that tomorrow they have to spend that much, they have the freedom to do so over days, weeks or months even. No matter how illiquid bitcoins are, those purchases spread over any period if time wint make an impact in a $1+ billion market cap commodity. And after that, they won't be buying any bitcoins at all. When new shares are created, it will be because an authorized participant contributed bitcoins for shares. And when shares are redeemed, all that will occur is that an authorized participant turned in their shares and redeemed them for bitcoins. Whether that person then sells their coins is not assured.

That's how etf's work (which is how this vehicle is described). If this were an open end Mutual fund, then each days purchases and withdrawals would be accompanied by the fund buying or selling bitcoins on an exchange. But that's specifically not what this investment vehicle is.

they already bought their initial batch of bitcoins.

but i still think price will move on this news.

How do you know "they" bought the bitcoins. It could very well be someone who had them who wanted to move them into an etf. I wouldn't be surprised if they were Keiser's coins that were traded for 1.75 million shares of the BIT etf.

Because it was seed money provided by the daughter company of Second Market.

[Adrian-x]

Maybe you could refresh my memory, which CIA suspicions are those? I spew so much crap I can hardly keep track of it myself.

Bitcoin being invented by the CIA - to educate Austrians and CB'ers about Economics - reference NSA Snowden a move to encourage cyber security.

[Adrian-x]

I was only partly joking about the education part. 

But still the idea of the CIA Crowd sourcing the responsibility of money flow in an economy to speculators trading in self interest is brilliant.

The EFT will provide another layer of buffering to the price.

[Adrian-x]

But then—it is of critical importance to me that not too many people believe what I have to say.

that's not a problem in this thread

[cypherdoc]

chodpaba

i've never seen you this active.  responding to every post.  you're usually much more circumspect and measured.

you must be short.

[Herp]

chodpaba

i've never seen you this active.  responding to every post.  you're usually much more circumspect and measured.

you must be short.

He's obviously trying to obfuscate any sensible discussion in this thread with worthless spam. A reader would just see a long thread filled with his nonsense and off-topics.

[Herp]

I would much rather we see the runup I have anticipated as a (more or less) repeat of 2012, to finally price in the halving.

But if we keep going at this rate, it won't happen... Not any time soon. Blow out too early and we have to wait.

That is what I am afraid will happen.

You remind me of the casual short troll from yahoo finance stock boards.