GBTC Bitcoin Investment Trust Observer

[JorgeStolfi]

Thanks for the explanation, if this is the case then the SEC policy doesn't seem to make a lot of sense.

After accredited investors purchase shares and hold for 1-year, they are now selling those shares to non-accredited investors on the OTC market. Which means that non-accredited investors are buying the fund in the end. The only difference for GBTC is that only accredited investors can initiate the creation of shares, but anyone can trade them.

If I'm understanding this correctly is seems absurd.

The "Accredited Investor" thing was relevant until last October or so, while BIT was under different rules.  Accredited Investors (i.e. individuals with "money that they could afford to lose") could buy shares directly from SecondMarket by paying in USD, at about the current price o 0.1 BTC per share.

Now, only "Authorized Pariticpants" can get shares from Grayscale, by giving BTC to it.  SecondMarket is an Authorized Participant and so they may still be able to act as middlemen and sell new shares to individuals for USD, as they did before (does the 1 year holding apply to them too?).  If so, perhaps they still require the buyer to be an Accredited Investor.  Those shares would still have to be held for one year before resale.  Perhaps SecondMarket now can charge a premium for those shares?

[Kupsi]

Thanks for the explanation, if this is the case then the SEC policy doesn't seem to make a lot of sense.

After accredited investors purchase shares and hold for 1-year, they are now selling those shares to non-accredited investors on the OTC market. Which means that non-accredited investors are buying the fund in the end. The only difference for GBTC is that only accredited investors can initiate the creation of shares, but anyone can trade them.

If I'm understanding this correctly is seems absurd.

The "Accredited Investor" thing was relevant until last October or so, while BIT was under different rules.  Accredited Investors (i.e. individuals with "money that they could afford to lose") could buy shares directly from SecondMarket by paying in USD, at about the current price o 0.1 BTC per share.

Now, only "Authorized Pariticpants" can get shares from Grayscale, by giving BTC to it.  SecondMarket is an Authorized Participant and so they may still be able to act as middlemen and sell new shares to individuals for USD, as they did before (does the 1 year holding apply to them too?).  If so, perhaps they still require the buyer to be an Accredited Investor.  Those shares would still have to be held for one year before resale.  Perhaps SecondMarket now can charge a premium for those shares?

https://twitter.com/GrayscaleInvest/status/595312440889495552

Qualified accredited investors** can choose to invest directly in the BIT at the applicable NAV per share.  The BIT’s shares are subject to significant resale and transfer restrictions.

http://grayscale.co/investors/

[elux]

Day 2: Daily Range 55.00 - 94.86 (Lots of 100+ shares) 550-948 USD/BTC

[Alley]

I like the ask for $500,000 per coin.

[JorgeStolfi]

BIT shares (GBTC) daily trading summary:

           !   OTX !   OTX !   FRT !    FRT !    FRT !        FRT !       FRT !     
Date       !  PRLO !  PRHI !  PRLO !   PRHI !   VSHR !       VUSD !      PRAV ! OBS 
-----------+-------+-------+-------+--------+--------+------------+-----------+----------
2015-05-04 | 37.98 | 42.00 |   .   | 200.00 |    765 |        .   |    .      | (*0)(*1)
2015-05-05 | 55.00 | 94.86 | 50.00 | 175.00 |    435 |   32198.00 |  74.01839 | (*0)
2015-05-06 |   .   |   .   | 65.00 |  68.00 |    125 |    8268.50 |  66.14800 | (*0)
2015-05-07 | 40.00 | 66.00 | 40.00 |  86.00 |   2844 |  163651.00 |  57.54255 |     
2015-05-08 | 49.00 | 59.00 | 49.00 |  59.00 |  14807 |  750019.70 |  50.65305 |     

2015-05-11 | 50.00 | 57.95 | 49.50 |  57.95 |   2756 |  143247.34 |  51.97654 |     
2015-05-12 | 49.00 | 50.01 | 49.00 |  52.25 |   2286 |  113299.25 |  49.56223 |     
2015-05-13 | 49.00 | 49.00 | 49.00 |  50.00 |    327 |   16113.10 |  49.27554 |     
2015-05-14 | 44.00 | 49.00 | 44.00 |  49.95 |  20894 | 1004923.74 |  48.09628 | (*2)
2015-05-15 | 38.00 | 45.00 | 38.00 |  45.00 |   2320 |   97444.35 |  42.00188 |     

2015-05-18 | 27.15 | 38.00 | 27.15 |  38.00 |   4950 |  158115.83 |  31.94259 |     
2015-05-19 | 27.90 | 29.50 | 27.89 |  29.90 |   4308 |  122327.92 |  28.39552 |  

"OTX" data from the GBTC quote page at OTCQX.
"FRT" data from the Freerealtime site, except those flagged (*0) and (*1) (see below).

PRLO = Lowest price in specified day.

PRHI = Highest price in the specified day.

VSHR = Number of shares traded in day.

VUSD = Trade volume in USD (sum over all trades of num of shares times price per share).

PRAV = Average price in day = VUSD/VSHR.

OBSERVATIONS:

(*0) The "FRT" price range for this entry was obtained from this post.

(*1) For 2015-05-04, the values of PRLO, VSHR, VUSD, and PRAV could not
be determined; the value of VSHR was taken from the OTCQX page.

(*2) The summary pages at OTCQX and FreeRealTime.com say 19894, but
adding the FreeRealTime list of trades we get 20894 (1000 more). The
VSHR value given is the latter. There were 2 trades near the end of the
day; perhaps one was undoing the other?

[coinableS]

GBTC data from OTCQX page at end of day:

Date             day's price range      day's volume
---------------+----------------------+-------------
2015-05-04        37.98 --   42.00               765
2015-05-05        55.00 --   94.86               435

At this rate one GBTC share will be worth $2,000 in no time! 

[pleaseexplain]

with all this messy way this quazi etf works why is not the following also possible until (if ever) COIN arrives.

I set up a company in a country (X) that sees bitcoin as a commodity.  I buy 20,000 bitcoin.  I then set up a company in the US for example which buys company x. The US company has 1 million shares. People are able to buy the shares and sell them to others as well.

I make some money on fees and an etf like product is immediately available to people - no year long wait etc.

Comments?
 

[marcus_of_augustus]

seems like even localbitcoins might have more reliable pricing than this thing ??

[JorgeStolfi]

with all this messy way this quazi etf works why is not the following also possible until (if ever) COIN arrives.

I set up a company in a country (X) that sees bitcoin as a commodity.  I buy 20,000 bitcoin.  I then set up a company in the US for example which buys company x. The US company has 1 million shares. People are able to buy the shares and sell them to others as well.

I make some money on fees and an etf like product is immediately available to people - no year long wait etc.

Comments?

You don't need that complication.  The Fortress Investment Group (a huge investment fund) and Overstock are traded in the open market, and at one time both owned some raw bitcoins.  (Overstock still does, Fortress may have unloaded them in early 2014.)  

So, when you bought shares of those companies, you became owner of some bitcoins.  (And maybe in a much stricter sense than when you buy BIT shares, because the latter may not really give you ownership of a slice of Grayscale.)

The catch is that (AFAIK) the SEC will require the company to post quarterly and annual reports on their finances, and the company needs the SEC's permission to list its shares on NYSE or NASDAQ.   If the assets of the company are entirely bitcoins, the company would have no revenue, just expenses, and would look no better than COIN; therefore, it would probably be in the same limbo as COIN, waiting for the SEC's decision...

[Chef Ramsay]

seems like even localbitcoins might have more reliable pricing than this thing ??

Maybe but I think we need to give this thing a few weeks to manifest itself to get the bigger picture for the mood of the market.

[lay785]

how can we short GBTC?

[Hunyadi]

how can we short GBTC?

Hahahah! Good question!

[gotmilk_]

how can we short GBTC?

You can't.

[skivrmt]

how can we short GBTC?

Hahahah! Good question!

You can't.  Simple answer.  No one will let you borrow the shares to short.

[bobabouey2]

with all this messy way this quazi etf works why is not the following also possible until (if ever) COIN arrives.

I set up a company in a country (X) that sees bitcoin as a commodity.  I buy 20,000 bitcoin.  I then set up a company in the US for example which buys company x. The US company has 1 million shares. People are able to buy the shares and sell them to others as well.

I make some money on fees and an etf like product is immediately available to people - no year long wait etc.

Comments?
 

Creating a shell public company that has freely tradeable shares in the US is not easy.  They are known as "blank check" companies and use to be the source of lots of scams.

There is a current version known as a SPAC (Special Purpose Acquisition Company), but there are many restraints on what they can do, and you still have to generally describe the type of investment you're going to pursue.  If you said you were going to acquire bitcoin, you'd get stuck in the same quagmire as COIN.

[ElectricMucus]

GBTC data from OTCQX page at end of day:

Date             day's price range      day's volume
---------------+----------------------+-------------
2015-05-04        37.98 --   42.00               765
2015-05-05        55.00 --   94.86               435

43.5 BTC

Did somebody call it a turd yet?
Ah, right... it was me.

[chriswen]

Bids

Code:

KCG Americas LLC		   550    65.00   
Canaccord Genuity Inc		   200 	  65.00
Puma Capital, LLC		   100 	  38.00
Citadel Securities		   109	  36.00
Maxim Group LLC		   	   50000  35.00
Automated Trading Desk, LLC        1150   25.00
Cantor Fitzgerald & Co             100    25.00
Merriman Curhan Ford & Co	   100	  20.00

Asks

Code:

KCG Americas LLC		   100	  93.00 
Canaccord Genuity Inc		   1      299.95                  

[bad trader]

It looks like GBTC trading won't officially even open today.



It's hard to say if there is demand when there is no supply whatsoever.

[chriswen]

It looks like GBTC trading won't officially even open today.



It's hard to say if there is demand when there is no supply whatsoever.

Well its open, but there's no trading.

[bad trader]

Well its open, but there's no trading.

I know. 125 shares (~12,5 bitcoins) have been traded today, but, if I understand this correctly, on that page they only really count trades that are at least 100 shares (~10 bitcoins) large and there has not been a single such trade today. Therefore there has not been an opening trade.