Will The Bitcoin Investment Trust affect the price?

[SgtSpike]

I'm no lawyer, and you aren't either. This is ridiculous.

My job here is done.

He understands the relevant laws a lot better than you though, apparently.

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[windjc]

I'm no lawyer, and you aren't either. This is ridiculous.

My job here is done.

What a moron.

[uhoh]

I'm no lawyer, and you aren't either. This is ridiculous.

My job here is done.

He understands the relevant laws a lot better than you though, apparently.

This.

SM's offering is not an ETF, it does not itself require SEC approval because it's not being traded on an open exchange.

[ElectricMucus]

ok, I'll bump it when it gets shut down.

[NewLiberty]

i thought there was a difference, SM is only open to accredited investors

They don't suddenly become accredited for an entirely different financial product. But Second Market are thinking they found a loophole and ran with it.

It is a blanket category and requires no special knowledge by the investor.  Some of them hire due diligence analysis.  It isn't a loophole.
Why do you suggest there ought there be a new restriction of transfer between knowledgeable parties in a private matter?

[windjc]

i thought there was a difference, SM is only open to accredited investors

They don't suddenly become accredited for an entirely different financial product. But Second Market are thinking they found a loophole and ran with it.

It is a blanket category and requires no special knowledge by the investor.  Some of them hire due diligence analysis.  It isn't a loophole.
Why do you suggest there ought there be a new restriction of transfer between knowledgeable parties in a private matter?

Because he is proud and trying to save face. He knows if he's right, even if there is basically no chance that he can claim intelligence and if he is wrong he can slink into darkness without having to face reality publicly.

[Herp]

No, I can do anything what is not forbidden. ... this is how new inventions works

That's what mtgox thought too btw, see where it got them.
It is forbidden and I already told you why.

You're obviously clueless. MtGox accounts in US were frozen because they were operating without a money transmitter license not because they were trading, facilitating the sale of bitcoin.

Bitcoins are illegal because they're not legal tender

In March 2013, the U.S. Financial Crimes Enforcement Network issues a new set of guidelines on "de-centralized virtual currency", clearly targeting Bitcoin. Under the new guidelines, "a user of virtual currency is not a Money Services Businesses (MSB) under FinCEN's regulations and therefore is not subject to MSB registration, reporting, and record keeping regulations." Miners on the other hand, might need to register, if they sell bitcoins for "real currency or its equivalent".[1]

In general, there are a number of currencies in existence that are not official government-backed currencies. A currency is, after all, nothing more than a convenient unit of account. While national laws may vary from country to country, and you should certainly check the laws of your jurisdiction, in general trading in any commodity, including digital currency like Bitcoin, BerkShares, game currencies like WoW gold, or Linden dollars, is not illegal.

https://en.bitcoin.it/wiki/Myths#Bitcoins_are_illegal_because_they.27re_not_legal_tender

[chufchuf]

No, I can do anything what is not forbidden. ... this is how new inventions works

That's what mtgox thought too btw, see where it got them.
It is forbidden and I already told you why.

You're obviously clueless. MtGox accounts in US were frozen because they were operating without a money transmitter license not because they were trading, facilitating the sale of bitcoin.

Electric Mucus is a desperate troll that has spent inordinate amounts of time angling in on any ridiculous bearish boutades he can muster since he sold at single digits or something like that, or because he has a lot of weird belief in nation states, or something else, who cares.

MtGox was in the middle of a dispute with Coinlab in order to get money transmission license partners in order to adjust to the sudden change of rules by the FinCen, get your narrative straight Electric Mucus. If these 'rules' were so clear-cut, the NSA wouldn't have asked FinCen to clarify them two months earlier...

[cypherdoc]

https://bitcointalk.org/index.php?topic=68655.msg1078151#msg1078151

I don't think he's ever been the same since.

[NewLiberty]

Ah, it is good to recall history, thank you.
Sometimes I wonder when folks post incredible and obvious false concerns along with a bearish attitude, if they are secret bulls working to discredit the bears.  Perhaps I am too cynical. Perhaps they honestly believe false things simply because it supports an already existing opinion or hope.

[Adrian-x]

Electric Mucus is a desperate troll that...

Encourages critical thinking. You can win at Bitcoin but winning can be luck.
When you convince EM you can be sure luck isn't part of it.
FTFU.

[NewLiberty]

Electric Mucus is a desperate troll that...

Encourages critical thinking. You can win at Bitcoin but winning can be luck.
When you convince EM you can be sure luck isn't part of it.
FTFU.

Yes, it is good to listen carefully to the critics.  Often that can point to where the next innovation is needed.

For example, when I keep hearing "Bitcoin isn't backed by anything" arguments on the news, I know I am on the right path with the Bitcoin specie project.
Bitcoin has a decentralized bank instead of a central bank.  Bitcoin is backed by all that it can buy and now that it is redeemable in bullion as well, it now has better backing than any fiat currency with a central bank.
Anyone with too much bitcoin that would like to back it in bullion can do so, we are just showing the way forward and making it easy and affordable for anyone, and doing it in a way that puts the focus on Bitcoin and it's value.

[Stephen Gornick]

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

There is demand for leverage such that today someone wanting to buy a bitcoin using leverage has to pay a price that is 10% over the current spot price and still has to wait nearly 90 days to get delivery.  See the BUZ3 (December 16, 2013 settlement) futures contract on ICBIT as an example:
 - https://icbit.se

The only thing needed to profit from this is a supply of bitcoins that you can "lock up" for 90 days.  Oh, look .... the fine print for BIT says your funds might get locked up on you:

An investment in the BIT will be illiquid and there may be significant restrictions on transferring interests in the BIT.

- https://www.secondmarket.com/fund/bitcoin-investment-trust

So Bitcoin is just like any other commodity or security in that there are derivative products and profit exists.    Seeing more funds emerge will help Bitcoin because it will help the commodity be used to solve problems more efficiently or used in new ways.    While it would seem this increased usage of bitcoins would only put upward pressure on the exchange rate, don't forget that providing liquidity for that wanting to go short on Bitcoin is likely one of the possibilities a fund like BIT brings as well.

[cypherdoc]

this is all building in the direction i personally conceptualized from the beginning of my involvement in Bitcoin in early 2011.  that of a Bitcoin Standard.

it seems reasonable that derivative products such as BIT will continue to be developed.  this is good in that it increases liquidity and velocity.  taking it one step further, i can easily see the use of the USD and other fiat currencies being fractionally reserved off of a Bitcoin Standard, much like gold was used prior to 1971.  

it would be so easy to implement and it would bring a much needed discipline to the market.

there is no reason Bitcoin needs to bring Armageddon.

[QuestionAuthority]

Electric Mucus is a desperate troll that...

Encourages critical thinking. You can win at Bitcoin but winning can be luck.
When you convince EM you can be sure luck isn't part of it.
FTFU.

Yes, it is good to listen carefully to the critics.  Often that can point to where the next innovation is needed.

For example, when I keep hearing "Bitcoin isn't backed by anything" arguments on the news, I know I am on the right path with the Bitcoin specie project.
Bitcoin has a decentralized bank instead of a central bank.  Bitcoin is backed by all that it can buy and now that it is redeemable in bullion as well, it now has better backing than any fiat currency with a central bank.
Anyone with too much bitcoin that would like to back it in bullion can do so, we are just showing the way forward and making it easy and affordable for anyone, and doing it in a way that puts the focus on Bitcoin and it's value.

It's good to see that too. When I started getting excited about Bitcoin and playing around with mining in early 2011 Bitcoin was backed by faith and energy. Not that religion isn't profitable but I would like to support a financial instrument based on a little more than the support structure the Catholic Church relies on. Bitcoin has come so far is such a short time it's now difficult to imagine a world without it. I remember my first small purchase at Spendbitcoin and how cool it was to get instant Amazon credit that could be used to buy real stuff. I was like a kid finding a stash of cookies in their grandmothers cupboard. Made me feel young again. lol

[cypherdoc]

That is, unless the Zerocoin protocols are implemented.

to the global financial system? 

[cypherdoc]

That is, unless the Zerocoin protocols are implemented.

to the global financial system?  

As it is, the blockchain is a rich source of data. It will reveal more about the economies it touches—as it touches more of them. I observe by your comment that you do not see this.

no, i agree that Bitcoin is already shining a big bright light on the current global financial systems infragilities.

it's just that the way you wrote your post it implies that the anonymous Zerocoin protocol could be applied to that fragile system instead of what it was intended to anonymize, ie, Bitcoin.

[cypherdoc]

That is, unless the Zerocoin protocols are implemented.

to the global financial system?  

As it is, the blockchain is a rich source of data. It will reveal more about the economies it touches—as it touches more of them. I observe by your comment that you do not see this.

no, i agree that Bitcoin is already shining a big bright light on the current global financial systems infragilities.

it's just that the way you wrote your post it implies that the anonymous Zerocoin protocol could be applied to that fragile system instead of what it was intended to anonymize, ie, Bitcoin.

It would also obfuscate more finely grained information that is presently stored in the blockchain. It presents an interesting problem for behind-the-scenes movers of money. On the one hand, it would be a tremendous advantage to them, but only if it preserves the differential in information available to them for a high cost, and nobody else. As long as that fine-grained information is available to any ol' grad student for free it presents much less of an advantage. With Zerocoin they would be able to preserve more of the advantage available to them through proprietary channels. But then, it would also provide more protection, in the form of information leakage, to individuals—somewhat leveling the playing field in the information wars.

Bitcoin, by itself, already is a tool that the 99.99% of the population will be able to use pseudonomously to protect themselves.  in fact, it seems pretty anonymous in my hands.  and it is already changing the global financial landscape even though you might not realize it yet.

if the academics can find a way to implement Zerocoin in an effective, efficient way to make anonymity guaranteed, it's all over for traditional Wall Street which depends on information obscurity and well as bail ins.  i really hope the folks at Hopkins figure it out.

[cypherdoc]

With Zerocoin they would be able to preserve more of the advantage available to them through proprietary channels.

this would only be a temporary effect to pay off existing corrupt channels of information asymmetry.

but by using Bitcoin in the long term, the playing field is leveled and that advantage will erode away.  their whole advantage today exists b/c of control of the printing presses.

[NewLiberty]

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

There is demand for leverage such that today someone wanting to buy a bitcoin using leverage has to pay a price that is 10% over the current spot price and still has to wait nearly 90 days to get delivery.  See the BUZ3 (December 16, 2013 settlement) futures contract on ICBIT as an example:
 - https://icbit.se

The only thing needed to profit from this is a supply of bitcoins that you can "lock up" for 90 days.  Oh, look .... the fine print for BIT says your funds might get locked up on you:

An investment in the BIT will be illiquid and there may be significant restrictions on transferring interests in the BIT.

- https://www.secondmarket.com/fund/bitcoin-investment-trust

So Bitcoin is just like any other commodity or security in that there are derivative products and profit exists.    Seeing more funds emerge will help Bitcoin because it will help the commodity be used to solve problems more efficiently or used in new ways.    While it would seem this increased usage of bitcoins would only put upward pressure on the exchange rate, don't forget that providing liquidity for that wanting to go short on Bitcoin is likely one of the possibility a fund like BIT brings as well.

Yes, this is so.  It opens the possibility of some large financial interest, or even a bank or central bank with arguable legislative approval (and who's function is to manipulate currencies) can take large short positions covered only by their ability to print money.  This is limited to SecondMarket's ability to lend bitcoins for sale, but as you point out it may be "illiquid" which means that they don't guarantee that there are any buyers if you want to sell shares, or that there are any sellers if you want to buy, except themselves.  
It doesn't pass Coindesk's test for setting price for their index.

My speculation on the effects (not on the market in general, just BIT's effect on the market) is:
Short term bear (the funds to buy the starting btc are spent, some who would have bought in the market exchanges in the near term will buy BIT instead.)
Long term Bull (as the potential for bigger money and new avenues of money may be invested, SecondMarket may need to start buying again)