GBTC Bitcoin Investment Trust Observer

[NUFCrichard]

Not much going on, true. But I also believe it's even incredible that there's more money going in when people aren't able to cash-out. Do you think people may be more tempted to buy on Coinbase or future ETFs, maybe?

The feds selling off chunks is also helpful for investors, they don't need secondmarket as much to get involved.  It does seem a shame that they aren't continuing to accumulate though, at least they aren't dumping...

[yefi]

Sophisticated investors not so sophisticated by the look of it.

[bassclef]

Not much going on, true. But I also believe it's even incredible that there's more money going in when people aren't able to cash-out. Do you think people may be more tempted to buy on Coinbase or future ETFs, maybe?

The feds selling off chunks is also helpful for investors, they don't need secondmarket as much to get involved.  It does seem a shame that they aren't continuing to accumulate though, at least they aren't dumping...

If I needed to accumulate I would have done so near $180. I'm sure there were many professional interests at that level willing to buy from weak hands.

[Kupsi]

This showed up in my Google news alert today 

http://www.otcmarkets.com/stock/BTCV/profile

[JorgeStolfi]

This showed up in my Google news alert today 
http://www.otcmarkets.com/stock/BTCV/profile

Well, it seems that SMBIT is listed at OTCQX finally.

Is trading there open yet?

Will SMBIT re-enable redemptions?

The SEC filing does not seem say much, unfortunately.  Anything that we did not know already?

[Kupsi]

This showed up in my Google news alert today 
http://www.otcmarkets.com/stock/BTCV/profile

Well, it seems that SMBIT is listed at OTCQX finally.

Is trading there open yet?

No, but I guess it's getting closer since they listed the BIT.

[JorgeStolfi]

Does OTCQX trade 24/7, like bitcoin exchanges? Or only during business hours, like NYSE?

[bobabouey2]

Bitcoin Investment Trust Gets Finra’s OK to Become Public Bitcoin Fund

http://www.wsj.com/articles/bitcoin-investment-trust-gets-finras-ok-to-become-public-bitcoin-fund-1425242094

Google the title to get to a paywall free version.

By MICHAEL J. CASEY
March 1, 2015 3:34 p.m. ET

Barry Silbert’s Bitcoin Investment Trust is poised to become the first publicly traded bitcoin fund, with approval and assignment of a ticker symbol by the financial industry’s main self-regulatory body paving the way for trading on an electronic platform operated by OTC Markets Group .

The BIT, which was first launched in 2013 as a private fund for accredited investors with annual incomes greater than $200,000 or assets of more than $1 million, has been racing against a rival offering by twins Cameron and Tyler Winklevoss, best known for their lawsuit against Facebook Inc. chief executive Mark Zuckerberg .

Whereas the competing Winklevoss Bitcoin Trust is going through a lengthy Securities and Exchange Commission process to register a formal exchange-traded fund, the BIT as taken a backdoor route to public listing. By exploiting a rule that allows holders of a private fund to sell their shares publicly after a 12-month lockup period and completing a less arduous approval process with the Financial Industry Regulatory Authority, some of those long-held shares in BIT should soon be available to investors of any income or wealth bracket. The BIT is sponsored by Grayscale Investments, a unit of Mr. Silbert’s Digital Currency Group, which he established last year to hold the digital currency interests of his broker-dealer SecondMarket Inc.

[chriswen]

Publically traded!

[ElectricMucus]

Barry Silbert’s Bitcoin Investment Trust is poised to become the first publicly traded bitcoin fund, with approval and assignment of a ticker symbol by the financial industry’s main self-regulatory body paving the way for trading on an electronic platform operated by OTC Markets Group .

The BIT, which was first launched in 2013 as a private fund for accredited investors with annual incomes greater than $200,000 or assets of more than $1 million, has been racing against a rival offering by twins Cameron and Tyler Winklevoss, best known for their lawsuit against Facebook Inc. Chief Executive Mark Zuckerberg .

While the competing Winklevoss Bitcoin Trust is going through a lengthy Securities and Exchange Commission process to register a formal exchange-traded fund, the BIT has taken a backdoor route to public listing. By exploiting a rule that allows holders of a private fund to sell their shares publicly after a 12-month lockup period and completing a less arduous approval process with the Financial Industry Regulatory Authority, some of those long-held shares in BIT should soon be available to investors of any income or wealth bracket. The BIT is sponsored by Grayscale Investments, a unit of Mr. Silbert’s Digital Currency Group, which he established last year to hold the digital currency interests of his broker-dealer SecondMarket Inc.

The creation of a publicly traded bitcoin investment vehicle is seen as an important milestone for the digital currency’s bid for mainstream acceptance. Bitcoin advocates hope that regulated instruments will encourage a wider investment base as investors will no longer need to own bitcoin directly, which can expose them to hacking risks. Those same enthusiasts hope that more liquid trading will help smooth bitcoin’s notoriously volatile price and thus make the digital currency more appealing for online payments and value transfers.

Neither Tyler nor Cameron Winklevoss was immediately available for comment. In the past they have argued that their offering will be superior to the Digital Currency Group’s because investors will want the full imprimatur of the SEC before buying an ETF-like vehicle. Without SEC approval, Mr. Silbert’s fund can’t be formally classified as an ETF, but once existing shares are offered publicly it will function very much like one.

As of Sunday, BIT shares were being cited under the temporary ticker symbol BTCV on OTC Markets’ “pink sheets” site, which includes over-the-counter offerings from companies with limited information disclosure. Price quotes are being supplied by Merriman Capital, which has been given a 30-day exclusive status to function as the fund’s initial market maker.

Mr. Silbert said Finra granted its request for a permanent ticker symbol, GBTC, and that “is expected to be effective shortly.” He said Grayscale is also separately “working through the approval process to enable the BIT’s shares to be quoted under the Alternative Reporting Standards on OTCQX, the top marketplace operated by OTC Markets Group.” That top-tier marketplace holds issuers to significantly higher standards of disclosure than is required for its pink sheet listings.

It is unclear how much secondary trading there will be in the BIT’s publicly listed shares. Any new shares, which are generated whenever Grayscale purchases bitcoins, can be sold only to wealthy, accredited investors. The size of the secondary market float will depend on how many early investors take advantage of the expiry of the lockup period to sell.

In a statement, the Digital Currency Group said, “Although we have been assigned a ticker symbol, no assurances can be given as to when or if such trading will commence, or that an active public secondary market for BIT shares will develop or be maintained.”

Many investors who purchased their shares at the BIT’s launch in the fall of 2013, when bitcoin’s price was around $100, have an incentive to sell. Even though bitcoin’s price is well down from its peak around $1,150 in early December of that year, at the current $247 price quoted by news site Coindesk, those early investors have a chance to realize a healthy profit. The Digital Currency Group is also allowed to offer a limited amount of its proprietary shares to the public, which would encourage the development of the secondary market.

Each share of BIT is worth approximately one-tenth of a bitcoin. As of Friday, the trust’s net asset value stood at $24.43 per share.

Write to Michael J. Casey at michael.j.casey@wsj.com

Secondmarket investors could not sell in the past and now the expiry period is over, and that means it's publicly traded, right?
Or can anybody explain what exactly else that means?

[Kupsi]

Secondmarket investors could not sell in the past and now the expiry period is over, and that means it's publicly traded, right?
Or can anybody explain what exactly else that means?

Yes, the BIT will be listed on OTC Markets and it will be publicly traded.

http://www.otcmarkets.com/stock/BTCV/profile

(The ticker will change to GBTC.)

[ElectricMucus]

Secondmarket investors could not sell in the past and now the expiry period is over, and that means it's publicly traded, right?
Or can anybody explain what exactly else that means?

Yes, the BIT will be listed on OTC Markets and it will be publicly traded.

http://www.otcmarkets.com/stock/BTCV/profile

(The ticker will change to GBTC.)

I mean implicitly, and only if IPO investors decide to sell, because where else are BIT shares supposed to come from?

[Kupsi]

Secondmarket investors could not sell in the past and now the expiry period is over, and that means it's publicly traded, right?
Or can anybody explain what exactly else that means?

Yes, the BIT will be listed on OTC Markets and it will be publicly traded.

http://www.otcmarkets.com/stock/BTCV/profile

(The ticker will change to GBTC.)

I mean implicitly, and only if IPO investors decide to sell, because where else are BIT shares supposed to come from?

As long as the bid price on the OTC market is higher than on the regular bitcoin exchanges, Grayscale will purchase bitcoins, create shares in the BIT and sell the shares to accredited investors which will sell the shares on the OTC market.

[ElectricMucus]

As I get it they still can only sell a year old shares though, just that now there are ones that are old enough.

[Kupsi]

As I get it they still can only sell a year old shares though, just that now there are ones that are old enough.

Hmm... I hope you are wrong. 

[Odalv]

As I get it they still can only sell a year old shares though, just that now there are ones that are old enough.

Even if this is true does it prevent BIT from buying more bitcoins ? (and sell 1 year old shares )

[Kupsi]

As I get it they still can only sell a year old shares though, just that now there are ones that are old enough.

Even if this is true does it prevent BIT from buying more bitcoins ? (and sell 1 year old shares )

~83k coins have been in the BIT for more than a year, so these will be sold at the OTC market if the investors can buy new shares for a lower price than they sell them for. And then the number will increase every month if there is demand.

[ElectricMucus]

Of course they will be able to do that, and I think they'll probably do that with the U.S. Marshals auction.

[JorgeStolfi]

As I get it they still can only sell a year old shares though, just that now there are ones that are old enough.

Even if this is true does it prevent BIT from buying more bitcoins ? (and sell 1 year old shares )

~83k coins have been in the BIT for more than a year, so these will be sold at the OTC market if the investors can buy new shares for a lower price than they sell them for. And then the number will increase every month if there is demand.

Not quite, those bitcoins will be sold only if the owners of the corresponding shares are allowed to redeem them (sell them back to SMBIT).  If the owners sell the shares on the OTC market, SMBIT neither buys nor sells.

Redemptions have been suspended since last October.  It is not clear if and when they will be allowed again.  

I think [SMBIT will buy more bitcoins] with the U.S. Marshals auction.

They should buy more bitcoins only if more people buy shares directly from them. After the shares become tradeable, if the price of their shares on the OTC market is sufficiently high, SMBIT may want to buy bitcoins and sell more shares on that market. Conversely, if the share price on OTCQX drops enough, and redemptions are still disabled, it will be profitable for SMBIT to buy their own shares on the market and sell the corresponding bitcoins.

[Kupsi]

As I get it they still can only sell a year old shares though, just that now there are ones that are old enough.

Even if this is true does it prevent BIT from buying more bitcoins ? (and sell 1 year old shares )

~83k coins have been in the BIT for more than a year, so these will be sold at the OTC market if the investors can buy new shares for a lower price than they sell them for. And then the number will increase every month if there is demand.

Not quite, those bitcoins will be sold only if the owners of the corresponding shares are allowed to redeem them (sell them back to SMBIT).  If the owners sell the shares on the OTC market, SMBIT neither buys nor sells.

Redemptions have been suspended since last October.  It is not clear if and when they will be allowed again.  

Long term investors with shares older than 1 year (about 83k coins) will sell them on OTC market if they can buy new cheaper shares from Grayscale. This will happen if the price on OTC market is higher than on the regular bitcoin exchanges.