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Author Topic: Bitcoin Investment Fund  (Read 3798 times)
alfred
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July 22, 2011, 03:14:20 AM
 #21

And particularly a NASDAQ long only strategy has not a lot of room to rise in the current crisis, particularly not vs. bitcoins if bitcoins stays strong.

That's not a valid analysis of the fund http://www.xidcapital.com/alpha-fund. It does not need 'room to rise' in the same way that a buy-and-hold strategy of the QQQs might. It can profit in a downward or choppy market because it constantly buys and sells stocks and can spend a lot of time in cash. Have a look at the model charts and you can see that although it still experiences drawdown, there have been no losing years. Contrast that with buy-and-hold of the Nasdaq 100 which is actually still in drawdown from 2000.

The issue of whether it will perform better than buy-and-hold bitcoin - I have no idea. The risk profiles are entirely different, though.


http://www.xidcapital.com
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July 22, 2011, 03:02:02 PM
 #22

An alternative version of these type of funds could be to deal with capex on mining hardware and/or r&d on new technologies for mining/semiconductors.  In this way, rather than the fund being a trading vehicle for bitcoin only, it would be able to identify companies which have some influence in the way bitcoins are generated.  For example, AMD would be an obvious candidate, but other companies working in similar promising areas would be available.  This could help to legitimatize the fund since it would have traditional instruments which would 'benefit in the rise of bitcoin'.

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alfred
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July 23, 2011, 02:20:58 AM
 #23

Way to move the market! AMD jumped almost 20% today.... http://www.google.com/finance?q=amd

http://www.xidcapital.com
KBundy
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July 23, 2011, 06:52:20 AM
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Way to move the market! AMD jumped almost 20% today.... http://www.google.com/finance?q=amd

What a very interesting statistic, and such a rapid increase as well, very interesting indeed.  I wonder if bitcoin really has something to do with the rise in AMD sales in the last quarter?  If that is true, that is incredibly excellent news, such an increase in prospect in such a short period of time?  Talk about momentum, this would be excellent to be attributed to our cause.

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alfred
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July 23, 2011, 05:44:34 PM
 #25

AMD's stock went up after publishing its quarterly report, showing a profit on reduced costs - not on increased revenue. So I doubt bitcoin had anything to do with that. Having said that, mining for bitcoin is an interesting new use for retail computing power, especially considering computing seems to be migrating from the PC to the cloud these days.

http://www.xidcapital.com
Weaver
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July 23, 2011, 09:47:13 PM
 #26

Do you have prior experience?
That is a big point for me...

O.o
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July 23, 2011, 10:02:18 PM
 #27

"Investment" this word never exist in the bitcoin world, since bitcoin itself is the biggest investment

In an inflationed economy, currency continuously drop in value, pushing those who have the currency to invest, otherwise their fortune will be destroyed day by day

In an deflationed economy, unless each one has hoarded enough currency, they will not start to investment/spend

I think currently we are just at the beginning of the hoarding phase Grin Grin

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July 23, 2011, 11:30:11 PM
 #28

I own a fleet of taxis (see www.ecotaxi.com) and with 2600 bitcoins, it is possible to buy and operate a taxi. Earnings would be around $700-900 USD per month (i.e. 50-65 bitcoins monthly). Return on investment is around 20-25% per year.

If your fund ever wants to invest in income producing assets instead of just publicly traded stocks, PM me and I would be happy to help. I can provide references obviously and this would be a formal investment titled in the name of your fund, etc.

Good luck with the fund!

So you would invest 2600 bitcoins to receive less than 1/3 of that as the maximum profit per investor per year, assuming that bitcoins never change and they don't get left out with 1/3 of their money after one year?  Sounds great.
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July 24, 2011, 03:59:27 AM
 #29

A taxi license is a "license to print money" because they are a government granted monopoly. I was driving them for awhile and the earnings for the owners are phenomonal.

fwiw its a great idea as an investment

Now if only we had a p2p bitcoin taxi service  Wink
alfred
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July 24, 2011, 04:24:39 AM
 #30

Do you have prior experience?
That is a big point for me...

I have had 5 years trading experience. The last 2 years specializing in systems like http://www.xidcapital.com/alpha-fund.

http://www.xidcapital.com
alfred
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July 24, 2011, 04:38:30 AM
 #31

"Investment" this word never exist in the bitcoin world, since bitcoin itself is the biggest investment

In an inflationed economy, currency continuously drop in value, pushing those who have the currency to invest, otherwise their fortune will be destroyed day by day

In an deflationed economy, unless each one has hoarded enough currency, they will not start to investment/spend

I think currently we are just at the beginning of the hoarding phase Grin Grin

I'm mostly interested in bitcoin for its utility. Speculating on bitcoin's future value wrt USD is not the only thing people are interested in. Besides, if bitcoin had no utility, it would have zero value and therefore no reason to speculate on it. The more utility it has the more chance you speculators have of making money from your hoard!

http://www.xidcapital.com
alfred
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July 24, 2011, 04:51:49 AM
 #32

I own a fleet of taxis (see www.ecotaxi.com) and with 2600 bitcoins, it is possible to buy and operate a taxi. Earnings would be around $700-900 USD per month (i.e. 50-65 bitcoins monthly). Return on investment is around 20-25% per year.

If your fund ever wants to invest in income producing assets instead of just publicly traded stocks, PM me and I would be happy to help. I can provide references obviously and this would be a formal investment titled in the name of your fund, etc.

Good luck with the fund!

You could float taxi shares on the https://glbse.com/ (not sure if it is up and running). For each share sold, you would need to pay a dividend per month to return the earnings to the owner of the share. The question is whether you need to capitalize a whole taxi before you can start to pay earnings on it. In other words, do you have a taxi that is operating right now that you could sell a portion of? If not, you need to attract investors to put in 2600 btc up front and that will be tricky.

http://www.xidcapital.com
bitdragon
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July 24, 2011, 04:28:21 PM
 #33

You are forgetting that the taxi and license can be sold at anytime and the investor recovers the original bitcoins they invested. So you invest 2600 coins and at the end of 1 year, you have about 720 new coins from profits plus the original 2600 coins. It is an excellent business.

How can I recover the original 2600 coins after one year? Surely that depends on another investor willing to pay that price and that depends on the exchange rate right?
Thanks!

alfred
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August 13, 2011, 06:52:46 AM
 #34

1,000 units of the fund have been listed on GLBSE under the ticker XID.ALPHA

http://www.xidcapital.com
NetTecture
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August 16, 2011, 04:59:37 AM
 #35

Ok, STUPID question - how are you going to deal with the possibl appreciation ot BTC when dealing on NASDAQ?

I mean, lets assume you hit your theoretical profits (which may not happen - quite likely you end up witha loss, but lets just ignore it).

At the same time, BTC go to 100 USD.

So, you turn the USD valuation up * 1.5, but thanks to BTC raising *10 the fund, in BTC, is still down significantly.

This is a serious issue I think - typical for the current valuation changes of BTC. Lot of people think BTC will end up at 1000+ USD quite soon or more or less fail, and with such appreciations all investments must only be looked at from their BTC side. The strong posible raise in BTC makes it very bad to not keep the funds in BTC.
alfred
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August 16, 2011, 05:49:13 AM
 #36

The fund is priced in USD so the price quoted in BTC varies with the exchange rate in exactly the same way that anything priced in USD would. So if BTC appreciates more than the fund does, the price quoted in BTC will go down.

The aim of the fund is to generate return in USD, not BTC. BTC is simply used as a means to transact. If people want to invest in BTC themselves, all they need to do is buy it on MtGox and keep it. There's nothing wrong with that, although I personally think it is a very risky investment and note BTC has lost 35% of its value since the fund started trading 40 odd days ago (it was $17 then, it is now $11).

I think there are two reasons to be interested in bitcoin. One is to speculate on it by buying or selling it on MtGox. The other is to use it for commerce, which is what I'm doing. If there is no one using it for commerce, then it would have no value, there would be no point speculating on it and it would not appreciate to $1000 to make you a millionaire. I don't understand why anyone who has an interest in BTC appreciating would go out of their way to 'bash' anyone who wants to use it - seems a bit self-defeating to me.

http://www.xidcapital.com
S3052
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August 16, 2011, 08:38:23 PM
 #37

And particularly a NASDAQ long only strategy has not a lot of room to rise in the current crisis, particularly not vs. bitcoins if bitcoins stays strong.

That's not a valid analysis of the fund http://www.xidcapital.com/alpha-fund. It does not need 'room to rise' in the same way that a buy-and-hold strategy of the QQQs might. It can profit in a downward or choppy market because it constantly buys and sells stocks and can spend a lot of time in cash. Have a look at the model charts and you can see that although it still experiences drawdown, there have been no losing years. Contrast that with buy-and-hold of the Nasdaq 100 which is actually still in drawdown from 2000.

The issue of whether it will perform better than buy-and-hold bitcoin - I have no idea. The risk profiles are entirely different, though.



The actual trading performance is for me more important as historical models. Since start of trading, performance of this alpha fund is down in the absolute and even underperforming the benchmark.

>15years analysis experience

Always do your own due diligence & consult your financial advisor. Never invest unless you can afford to lose your entire investment.

http://twitter.com/BitcoinAnalyst

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alfred
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August 17, 2011, 02:42:08 AM
 #38

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The actual trading performance is for me more important as historical models. Since start of trading, performance of this alpha fund is down in the absolute and even underperforming the benchmark.

Agreed that actual trading performance is paramount, and I will continue to track it and make it public. The performance to date is disappointing. It is still early days - I am hoping it will pull ahead, and stay ahead, before too long. The period of tracked actual performance is still short, and there are plenty of time periods like it in the model so I'm personally not too discouraged.

http://www.xidcapital.com
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August 17, 2011, 06:26:05 AM
 #39

This is perfectly fine. Let's continue to watch it.

>15years analysis experience

Always do your own due diligence & consult your financial advisor. Never invest unless you can afford to lose your entire investment.

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