RoadTrain
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May 11, 2015, 09:54:06 PM |
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Sorry for being ignorant, but how technically these fund fees are paid?
They are discounted when the shares are redeemed, i.e. returned to Grayscale in exchange for the BTC they are supposed to stand for. So is the amount to pay dependent on share's age? Does it mean that tradable shares are not equal, i.e. older shares are subject to more fees at redemption? |
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nioc
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May 11, 2015, 11:41:50 PM |
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The GBTC market closed at 50 dollars per share with volume of 2756 shares (less than 275 bitcoins).  The volume was lower than Thursday's 2844. It remains to be seen if Friday's high volume was an anomaly. I don't know why you put it like that, the volume today is only 3% less |
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bobabouey2
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May 12, 2015, 12:20:15 AM |
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Sorry for being ignorant, but how technically these fund fees are paid?
They are discounted when the shares are redeemed, i.e. returned to Grayscale in exchange for the BTC they are supposed to stand for. So is the amount to pay dependent on share's age? Does it mean that tradable shares are not equal, i.e. older shares are subject to more fees at redemption? Jorge's description isn't exactly how it works. Every business day, the Trust calculates its Net Asset Value (NAV). NAV is value of bitcoin and any cash, less accrued fees, expenses and some other stuff. As fee is earned or other expenses are paid, cash is used to pay those expenses, and bitcoin is sold if necessary. So NAV is constantly adjusting based on value of bitcoin and fees / expenses accrued. See here, searching for "Non-GAAP Net Asset Value." https://www.otciq.com/otciq/ajax/showFinancialReportById.pdf?id=135313If and when redemptions are resumed, the NAV would be the basis on which redemptions are made. The NAV is also the price at which accredited investors can purchase directly from BIT, although those shares would not be publicly tradeable for 12 months. By the same token, when looking at the premium / discount of the share price vs. bitcoin, you should really be comparing to the daily NAV, not .1 of bitcoin. Which is here, click the market performance tab - $23.35: http://grayscale.co/bitcoin-investment-trust/ (It seems like the NAV on the old bitcointrust.co is no longer current, the Grayscale site is referred to in the OTC filings as the current official source). |
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JorgeStolfi
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May 12, 2015, 12:32:08 AM |
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Jorge's description isn't exactly how it works. Every business day, the Trust calculates its Net Asset Value (NAV). NAV is value of bitcoin and any cash, less accrued fees, expenses and some other stuff. As fee is earned or other expenses are paid, cash is used to pay those expenses, and bitcoin is sold if necessary. So NAV is constantly adjusting based on value of bitcoin and fees / expenses accrued. See here, searching for "Non-GAAP Net Asset Value." https://www.otciq.com/otciq/ajax/showFinancialReportById.pdf?id=135313If and when redemptions are resumed, the NAV would be the basis on which redemptions are made. The NAV is also the price at which accredited investors can purchase directly from BIT, although those shares would not be publicly tradeable for 12 months. Not disputing this, except a detail: if I read correctly, the official filed documents (available through the OTCQX site) say that Grayscale takes only bitcoins, not dollars, when issuing new shares; and returns only bitcoins, not dollars, when the shares are dedeemed. It is some top-level brokers (of which SecondMarket is one, possibly the only one) who may take dollars from clients and buy bitcoins to give to Grayscale, or get bitcoins from Grayscale and may sell them to give dollars to clients. Did I read correctly? |
Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
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bobabouey2
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May 12, 2015, 01:09:26 AM |
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Jorge's description isn't exactly how it works. Every business day, the Trust calculates its Net Asset Value (NAV). NAV is value of bitcoin and any cash, less accrued fees, expenses and some other stuff. As fee is earned or other expenses are paid, cash is used to pay those expenses, and bitcoin is sold if necessary. So NAV is constantly adjusting based on value of bitcoin and fees / expenses accrued. See here, searching for "Non-GAAP Net Asset Value." https://www.otciq.com/otciq/ajax/showFinancialReportById.pdf?id=135313If and when redemptions are resumed, the NAV would be the basis on which redemptions are made. The NAV is also the price at which accredited investors can purchase directly from BIT, although those shares would not be publicly tradeable for 12 months. Not disputing this, except a detail: if I read correctly, the official filed documents (available through the OTCQX site) say that Grayscale takes only bitcoins, not dollars, when issuing new shares; and returns only bitcoins, not dollars, when the shares are dedeemed. It is some top-level brokers (of which SecondMarket is one, possibly the only one) who may take dollars from clients and buy bitcoins to give to Grayscale, or get bitcoins from Grayscale and may sell them to give dollars to clients. Did I read correctly? Yes, I think you are correct. I should have said that NAV is the price at which accredited investors can purchase directly from an Authorized Participant. And according to the last annual report, the only authorized participant currently is SecondMarket. I wish I could find a copy of the original prospectus. I'm curious if the initial trust had all the complexities related to authorized participants, or if it was a simpler structure, and was amended once they refined the OTC listing approach, in anticipation of eventually behaving more like a true ETF. |
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JorgeStolfi
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May 12, 2015, 02:32:23 AM |
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y is SecondMarket.
I wish I could find a copy of the original prospectus. I'm curious if the initial trust had all the complexities related to authorized participants, or if it was a simpler structure, and was amended once they refined the OTC listing approach, in anticipation of eventually behaving more like a true ETF.
Since the beginning, AFAIK, the full investment contract was confidential and shown only to investors, apparently with certain non-disclosure restrictions. The information on the BIT website was fairly terse. Grayscale was not mentioned (and presumably did not exist). There was no mention of brokers, Authorized Participants, or other intermediaries: accredited investors could buy BIT shares directly from BIT/Secondmarket, in dollars (minimum 25'000 USD, IIRC), and redeem them for dollars after the 6 month holding period. |
Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
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bad trader
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May 12, 2015, 02:54:56 AM |
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The GBTC market closed at 50 dollars per share with volume of 2756 shares (less than 275 bitcoins). The volume was lower than Thursday's 2844. It remains to be seen if Friday's high volume was an anomaly. I don't know why you put it like that, the volume today is only 3% less Well, it was roughly the same as on Thursday. The point is it was much higher on Friday: 14807 |
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derpinheimer
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May 12, 2015, 04:32:46 AM |
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The GBTC market closed at 50 dollars per share with volume of 2756 shares (less than 275 bitcoins). The volume was lower than Thursday's 2844. It remains to be seen if Friday's high volume was an anomaly. I don't know why you put it like that, the volume today is only 3% less Well, it was roughly the same as on Thursday. The point is it was much higher on Friday: 14807 Exactly. Friday was a hopeful vision of the future. <300BTC traded today is disappointing. |
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chriswen
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May 12, 2015, 08:32:33 AM |
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Interesting thing is that MAXM has bids at $49 and an ask at $50.
Also we're not there yet but there is an upper limit to trading volume. Not everyone will be willing to trade shares. The amount of GBTC is currently capped so there's a bit of a limit to its liquidity.
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nioc
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May 12, 2015, 09:21:16 AM |
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The GBTC market closed at 50 dollars per share with volume of 2756 shares (less than 275 bitcoins). The volume was lower than Thursday's 2844. It remains to be seen if Friday's high volume was an anomaly. I don't know why you put it like that, the volume today is only 3% less Well, it was roughly the same as on Thursday. The point is it was much higher on Friday: 14807 thanks, it would be helpful if I knew which day it was  |
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RoadTrain
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May 12, 2015, 07:15:42 PM |
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Sorry for being ignorant, but how technically these fund fees are paid?
They are discounted when the shares are redeemed, i.e. returned to Grayscale in exchange for the BTC they are supposed to stand for. So is the amount to pay dependent on share's age? Does it mean that tradable shares are not equal, i.e. older shares are subject to more fees at redemption? Jorge's description isn't exactly how it works. Every business day, the Trust calculates its Net Asset Value (NAV). NAV is value of bitcoin and any cash, less accrued fees, expenses and some other stuff. As fee is earned or other expenses are paid, cash is used to pay those expenses, and bitcoin is sold if necessary. So NAV is constantly adjusting based on value of bitcoin and fees / expenses accrued. See here, searching for "Non-GAAP Net Asset Value." https://www.otciq.com/otciq/ajax/showFinancialReportById.pdf?id=135313If and when redemptions are resumed, the NAV would be the basis on which redemptions are made. The NAV is also the price at which accredited investors can purchase directly from BIT, although those shares would not be publicly tradeable for 12 months. By the same token, when looking at the premium / discount of the share price vs. bitcoin, you should really be comparing to the daily NAV, not .1 of bitcoin. Which is here, click the market performance tab - $23.35: http://grayscale.co/bitcoin-investment-trust/ (It seems like the NAV on the old bitcointrust.co is no longer current, the Grayscale site is referred to in the OTC filings as the current official source). Thanks, this is a good and thorough explanation. Now it makes sense  |
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Cconvert2G36
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May 12, 2015, 08:25:25 PM |
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Interesting thing is that MAXM has bids at $49 and an ask at $50.
Also we're not there yet but there is an upper limit to trading volume. Not everyone will be willing to trade shares. The amount of GBTC is currently capped so there's a bit of a limit to its liquidity.
Why is this interesting? I thought making a market and raking a spread is their business model. |
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bad trader
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May 12, 2015, 08:42:14 PM |
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The GBTC market closed at 49 dollars per share with volume of 2286 shares (less than 225 bitcoins).  |
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jl2012 (OP)
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May 13, 2015, 03:32:12 AM |
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Updated with new format of reporting
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Donation address: 374iXxS4BuqFHsEwwxUuH3nvJ69Y7Hqur3 (Bitcoin ONLY)
LRDGENPLYrcTRssGoZrsCT1hngaH3BVkM4 (LTC)
PGP: D3CC 1772 8600 5BB8 FF67 3294 C524 2A1A B393 6517
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bad trader
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May 13, 2015, 09:21:14 PM
Last edit: May 13, 2015, 10:02:53 PM by bad trader |
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The GBTC market closed at 49 dollars per share with volume of 327 shares (less than 32.1 bitcoins).  It looks like OTCMarkets lied to me. GBTC officially closed at 49.95 yesterday, not at 49.00. Today it should be 49.00, though. There were not many trades:  |
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ElectricMucus
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Marketing manager - GO MP
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May 13, 2015, 09:41:08 PM |
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The GBTC market closed at 49 dollars per share with volume of 327 shares (less than 32.1 bitcoins).
I'm flabbergasted. |
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Cconvert2G36
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May 13, 2015, 09:47:52 PM |
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The GBTC market closed at 49 dollars per share with volume of 327 shares (less than 32.1 bitcoins).
I'm flabbergasted. That the BIT 12 month bagholders of 100's of thousands of shares refuse to sell at $490 per btc equiv? Me too. |
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JorgeStolfi
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May 14, 2015, 03:46:37 AM |
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That the BIT 12 month bagholders of 100's of thousands of shares refuse to sell at $490 per btc equiv? Me too.
Could they be waiting in the hope that the GBTC price will go higher? |
Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
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Cconvert2G36
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May 14, 2015, 05:36:58 AM |
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That the BIT 12 month bagholders of 100's of thousands of shares refuse to sell at $490 per btc equiv? Me too.
Could they be waiting in the hope that the GBTC price will go higher? I have 5 scenarios in mind. 1. It is a tiny portion of their net worth and they are willing to ride to the moon or $0. 2. It is a tiny portion of their net worth and they can't be arsed to bother transferring shares to sell. 3. They are waiting until Nov, Dec 2015 to use capital losses to offset capital gains in other arenas. 4. They are too incompetent/scared to buy and secure the same asset for less than half price, but still want to hodl. 5. Selling hundreds of thousands of shares would drive GBTC price to or below NAV of the trust. |
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