GBTC Bitcoin Investment Trust Observer

[phoenix1]

Is there a way to find out how many tradeable shares in GBTC have been created through the 'conversion process'?
If I understand correctly, SMBIT stakeholders have to 'convert' their 'stake' to GBTC shares in order to be able to sell them. As such, one would expect there to be a way to track this as it is effectively the max liquidity pool in the 'EFT' at any given time.
If nobody is converting, nothing can happen. Who would invest without knowing approx how many tradeable shares there are, not just how many are eligible for conversion?

Personally I am expecting a low liquidity 'fail', and probably a more volatile price than BTC itself, but lets wait and see  

EDIT: Just been looking back over the thread and it seems my interpretation was incorrect. No 'conversion' needs to take place and 'eligible sellers' will be sent share certificates with instructions on how to sell it they so desire.
 
So why the hell is it taking so long ??

[gotmilk_]

Is there a way to find out how many tradeable shares in GBTC have been created through the 'conversion process'?
If I understand correctly, SMBIT stakeholders have to 'convert' their 'stake' to GBTC shares in order to be able to sell them. As such, one would expect there to be a way to track this as it is effectively the max liquidity pool in the 'EFT' at any given time.
If nobody is converting, nothing can happen. Who would invest without knowing approx how many tradeable shares there are, not just how many are eligible for conversion?

Personally I am expecting a low liquidity 'fail', and probably a more volatile price than BTC itself, but lets wait and see  

EDIT: Just been looking back over the thread and it seems my interpretation was incorrect. No 'conversion' needs to take place and 'eligible sellers' will be sent share certificates with instructions on how to sell it they so desire.
 
So why the hell is it taking so long ??

Maybe sellers already got certificates but they are not willing to sell? After all this are long term investors... Many probably won't even look at those certificates for next 5 years.

[phoenix1]

Maybe sellers already got certificates but they are not willing to sell? After all this are long term investors... Many probably won't even look at those certificates for next 5 years.

I think this is quite likely to be the outcome, hence why I think it will be a low liquidity fail

[BitAddict]

I indeed think BIT hodlers won't be interested in selling unless a high price is offered to them, since most of them are underwater.

The main question is why on hell someone on his sane mind would prefer to pay a high premium for the BIT shares, that are worse than bitcon itself, you have to pay maintenance fees and you can only sell in their own platform. If liquidity there dies you are trapped big time.

Everybody is expeting greater fools paying high premium for this shares, but I highly doubt it will happen (more than the initial rush).
So I bet this market won't have volume at all, unless first we see a big decline or a big rally and that shares starts to move.

[ensurance982]

Any trades yet?

Not a bean - http://quotes.wsj.com/GBTC

inb4 secondmarket exit scam

How would they pull of an exit scam? This isn't your old unregulated Bitcoin stock without any rules and legal consequences in place. This thing is working on the 'good' old financial system.

[ensurance982]

If I take it correctly, it is pretty easy: Either people are not willing to sell at this moment (hell, how can it be any more bullish than that?) or they just can't sell as of now and it still takes some time, then you can make exactly *zero* conclusions from the lack of trades occurring...

[gotmilk_]

I bet BIT will provide liquidity (at least for the ask side)... one way or another.

Why are they buying shares instead of bitcoin directly? Maybe they just like "old and traditional" way of trading. Those investors looks completely different on their investments.

[ensurance982]

I bet BIT will provide liquidity (at least for the ask side)... one way or another.

Why are they buying shares instead of bitcoin directly? Maybe they just like "old and traditional" way of trading. Those investors looks completely different on their investments.

It's the way these investment vehicles works. It's also something the investors from Wall Street don't really care about. It's the ease of use for them, the way they can do their taxes the old way and the fact that it's regulated.

[BitAddict]

If I take it correctly, it is pretty easy: Either people are not willing to sell at this moment (hell, how can it be any more bullish than that?) or they just can't sell as of now and it still takes some time, then you can make exactly *zero* conclusions from the lack of trades occurring...

People trapped in the fund, at a loss, not willing to sell doesn't mean it is bullish. It only means they are bagholders. The more bagholders it has, the harder to go up.

I'm not saying it because there are 0 trades right now, which is obvious they couldn't send their shares there. I'm just saying my opinion of what I think is more likely to happen.

[ensurance982]

If I take it correctly, it is pretty easy: Either people are not willing to sell at this moment (hell, how can it be any more bullish than that?) or they just can't sell as of now and it still takes some time, then you can make exactly *zero* conclusions from the lack of trades occurring...

People trapped in the fund, at a loss, not willing to sell doesn't mean it is bullish. It only means they are bagholders.

So what, just a decrease in supply, if you ask me... If less people are willing to sell, less coins enter the open markets, which is better for the price.

[BitAddict]

If I take it correctly, it is pretty easy: Either people are not willing to sell at this moment (hell, how can it be any more bullish than that?) or they just can't sell as of now and it still takes some time, then you can make exactly *zero* conclusions from the lack of trades occurring...

People trapped in the fund, at a loss, not willing to sell doesn't mean it is bullish. It only means they are bagholders.

So what, just a decrease in supply, if you ask me... If less people are willing to sell, less coins enter the open markets, which is better for the price.

They are bagholders already bought in. Not selling now doesn't mean they are big potential dumpers if price goes below $200.
So, having bagholders at a big loss in a overall bearish market for one and a half year isn't bullish at all.

[ensurance982]

If I take it correctly, it is pretty easy: Either people are not willing to sell at this moment (hell, how can it be any more bullish than that?) or they just can't sell as of now and it still takes some time, then you can make exactly *zero* conclusions from the lack of trades occurring...

People trapped in the fund, at a loss, not willing to sell doesn't mean it is bullish. It only means they are bagholders.

So what, just a decrease in supply, if you ask me... If less people are willing to sell, less coins enter the open markets, which is better for the price.

They are bagholders already bought in. Not selling now doesn't mean they are big potential dumpers if price goes below $200.

Yeah I don't see them selling, either, but the total amount of coins in circulation is lower as long as they hold on to their coins. Yes, if they haven't sold now, they won't sell at $200. Works for me.

[brg444]

If I take it correctly, it is pretty easy: Either people are not willing to sell at this moment (hell, how can it be any more bullish than that?) or they just can't sell as of now and it still takes some time, then you can make exactly *zero* conclusions from the lack of trades occurring...

People trapped in the fund, at a loss, not willing to sell doesn't mean it is bullish. It only means they are bagholders. The more bagholders it has, the harder to go up.

I'm not saying it because there are 0 trades right now, which is obvious they couldn't send their shares there. I'm just saying my opinion of what I think is more likely to happen.

Is it not the case that some bought shares of BIT when price was around 100 and are not at a loss but a profit right now?

Do we have an estimate of what percentage of holders that might be?

[ensurance982]

If I take it correctly, it is pretty easy: Either people are not willing to sell at this moment (hell, how can it be any more bullish than that?) or they just can't sell as of now and it still takes some time, then you can make exactly *zero* conclusions from the lack of trades occurring...

People trapped in the fund, at a loss, not willing to sell doesn't mean it is bullish. It only means they are bagholders. The more bagholders it has, the harder to go up.

I'm not saying it because there are 0 trades right now, which is obvious they couldn't send their shares there. I'm just saying my opinion of what I think is more likely to happen.

Is it not the case that some bought shares of BIT when price was around 100 and are not at a loss but a profit right now?

Do we have an estimate of what percentage of holders that might be?

Isn't the fund only around since late 2013? I mean sure there have still been lower prices, but right now we're approximately at the same levels with a chance for a turnaround. I wouldn't sell right now.

[gotmilk_]

If I take it correctly, it is pretty easy: Either people are not willing to sell at this moment (hell, how can it be any more bullish than that?) or they just can't sell as of now and it still takes some time, then you can make exactly *zero* conclusions from the lack of trades occurring...

People trapped in the fund, at a loss, not willing to sell doesn't mean it is bullish. It only means they are bagholders. The more bagholders it has, the harder to go up.

I'm not saying it because there are 0 trades right now, which is obvious they couldn't send their shares there. I'm just saying my opinion of what I think is more likely to happen.

Is it not the case that some bought shares of BIT when price was around 100 and are not at a loss but a profit right now?

Do we have an estimate of what percentage of holders that might be?

Isn't the fund only around since late 2013? I mean sure there have still been lower prices, but right now we're approximately at the same levels with a chance for a turnaround. I wouldn't sell right now.

https://bitcointalk.org/index.php?topic=337486.msg6449073#msg6449073

34k+ bought bellow the current price. Question is if those share holders already exit (until it was possible) or they still hold.
Anyway here is also a nice arbitrage for many there... selling old shares for 35$ and buying new bitcoins/shares (as investor into BIT) at current price.

[ensurance982]

If I take it correctly, it is pretty easy: Either people are not willing to sell at this moment (hell, how can it be any more bullish than that?) or they just can't sell as of now and it still takes some time, then you can make exactly *zero* conclusions from the lack of trades occurring...

People trapped in the fund, at a loss, not willing to sell doesn't mean it is bullish. It only means they are bagholders. The more bagholders it has, the harder to go up.

I'm not saying it because there are 0 trades right now, which is obvious they couldn't send their shares there. I'm just saying my opinion of what I think is more likely to happen.

Is it not the case that some bought shares of BIT when price was around 100 and are not at a loss but a profit right now?

Do we have an estimate of what percentage of holders that might be?

Isn't the fund only around since late 2013? I mean sure there have still been lower prices, but right now we're approximately at the same levels with a chance for a turnaround. I wouldn't sell right now.

https://bitcointalk.org/index.php?topic=337486.msg6449073#msg6449073

34k+ bought bellow the current price. Question is if those share holders already exit (until it was possible) or they still hold.
Anyway here is also a nice arbitrage for many there... selling old shares for 35$ and buying new bitcoins/shares (as investor into BIT) at current price.

Those numbers are pretty old already, though. Yeah the arbitrage-opportunity is there. I think it will be interesting to see, how many people are going to take it, and on what volume.

[backb]

If I take it correctly, it is pretty easy: Either people are not willing to sell at this moment (hell, how can it be any more bullish than that?) or they just can't sell as of now and it still takes some time, then you can make exactly *zero* conclusions from the lack of trades occurring...

People trapped in the fund, at a loss, not willing to sell doesn't mean it is bullish. It only means they are bagholders. The more bagholders it has, the harder to go up.

I'm not saying it because there are 0 trades right now, which is obvious they couldn't send their shares there. I'm just saying my opinion of what I think is more likely to happen.

Is it not the case that some bought shares of BIT when price was around 100 and are not at a loss but a profit right now?

Do we have an estimate of what percentage of holders that might be?

Isn't the fund only around since late 2013? I mean sure there have still been lower prices, but right now we're approximately at the same levels with a chance for a turnaround. I wouldn't sell right now.

I really don't get why anyone would want to sell their GBTC coins at current prices, to be honest... I mean they all bought in at higher prices and they are obviously investors who aren't in for the daily fluctuations, thus they most likely can afford to wait, as well.

Yes, very investors bought in Sep-Oct 2013 when BTC was cheaper than today. (The first ~18'000 BTC apparently were "seed" investment by the fund creators themselves.)  Most investment occured between Nov/2013 and May/2014.

http://www.ic.unicamp.br/~stolfi/temp/2015-02-12-smbit-plot.jpg

[ click on plot for full version ]

BTW,, there are no "GBTC coins".  Those are BIT shares; GBTC is just their ticker symbol on OTCQX, just as AAPL is the symbol for Apple shares on NYSE.

[JorgeStolfi]

Maybe sellers already got certificates but they are not willing to sell? After all this are long term investors... Many probably won't even look at those certificates for next 5 years.

I find it hard to believe that nobody will want to sell.  Surely some will have lost faith and will want to cut their losses, or will need the money for some emergency/

According to the data posted by the OP, there may be between 200'000 and 300'000 BIT shares that were issued in September and October of 2013, when the price was ~130 $/BTC.  Their owners could sell now at ~250 $/BTC and still make a respectable ROI.  All shares issued after the first week of Nove/2013 were sold above today's price.

However, ~180'000 of those shares (~18'000 BTC) were the "seed" provided by the fund creators.  They may have different motivations than ordinary investors.

By the way, that is the main motivation for someone to create a fund: it is a way to sell a large hoard of BTC to a new market ("old-fashioned investors"), therefore without depressing the price.  And then also maybe make some money from fees, if the fund becomes popular.  Even if they play strictly by the rules and don't try to trade with their BTC holdings.

[JorgeStolfi]

PS. According to their 2014 report filed with the SEC (available through the OTCQX page), there have been some redemptions in 2014.  The ~69 M$ figure I computed is the net total investment to date; if those redemptions were made at profit, the actual amount invested by the current BIT share holders was even larger than the net total.

PS2. Also from that report, I understood the bitcoins held by Greyscale are not insured against theft, embezzlement, or accidental loss; and Greyscale refuses to be held liable for losses to investors resulting from such events.  Could someone please confirm this?

[Torque]

I find it hard to believe that nobody will want to sell.  Surely some will have lost faith and will want to cut their losses, or will need the money for some emergency/

Anyone with $25K lying around to invest in a high risk asset hardly needs any emergency money, lol.  And loss cutters already did so in January.