GBTC Bitcoin Investment Trust Observer

[gentlemand]

Are you saying that the BTC that's backing up the GBTC shares is *not* actually there? That's quite a claim.

Nope. I'm saying people buying GBTC shares are buying GBTC shares, not Bitcoin.

The price might be partially derived from their Bitcoin holdings, but a big chunk of it is coming from its own peculiar demands because of its nature.

As its customers are not buying BTC then they have nothing to do with BCH either.

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[MrSunshine]

Are you saying that the BTC that's backing up the GBTC shares is *not* actually there? That's quite a claim.

Nope. I'm saying people buying GBTC shares are buying GBTC shares, not Bitcoin.

The price might be partially derived from their Bitcoin holdings, but a big chunk of it is coming from its own peculiar demands because of its nature.

As its customers are not buying BTC then they have nothing to do with BCH either.

I am pretty sure I read that GBTC will be distributing the BCH value to GBTC holders, that were holding at the time of the split, at some point in the future.

[mmortal03]

Are you saying that the BTC that's backing up the GBTC shares is *not* actually there? That's quite a claim.

Nope. I'm saying people buying GBTC shares are buying GBTC shares, not Bitcoin.

The price might be partially derived from their Bitcoin holdings, but a big chunk of it is coming from its own peculiar demands because of its nature.

As its customers are not buying BTC then they have nothing to do with BCH either.

I am pretty sure I read that GBTC will be distributing the BCH value to GBTC holders, that were holding at the time of the split, at some point in the future.

Yep: https://finance.yahoo.com/news/grayscale-investments-llc-statement-regarding-203000163.html

[megadeth]

They're creating another entity to hold the BCC:
https://news.bitcoin.com/grayscales-trust-contemplates-creating-another-entity-for-bitcoin-cash/

[oblox]

They're creating another entity to hold the BCC:
https://news.bitcoin.com/grayscales-trust-contemplates-creating-another-entity-for-bitcoin-cash/

Nothing filed. It's under evaluation.

[mmortal03]

They're creating another entity to hold the BCC:
https://news.bitcoin.com/grayscales-trust-contemplates-creating-another-entity-for-bitcoin-cash/

Nothing filed. It's under evaluation.

Right, I think I posted the link that that references last month, but nothing has been made official: http://www.prnewswire.com/news-releases/bitcoin-investment-trust-provides-update-on-possible-bitcoin-cash-distribution-300515060.html

[mmortal03]

The Bitcoin Investment Trust looks like they're going to have shareholders vote in less than two weeks to amend the trust to do some relevant things: https://grayscale.co/wp-content/uploads/2015/09/BIT-Consent-Request-October-17-FINAL.pdf

The meeting date is October 24, 2017.

[MrSunshine]

The Bitcoin Investment Trust looks like they're going to have shareholders vote in less than two weeks to amend the trust to do some relevant things: https://grayscale.co/wp-content/uploads/2015/09/BIT-Consent-Request-October-17-FINAL.pdf

The meeting date is October 24, 2017.

Too much legalize wording for me. Is there any reason we should vote against this?

[mmortal03]

The Bitcoin Investment Trust looks like they're going to have shareholders vote in less than two weeks to amend the trust to do some relevant things: https://grayscale.co/wp-content/uploads/2015/09/BIT-Consent-Request-October-17-FINAL.pdf

The meeting date is October 24, 2017.

Too much legalize wording for me. Is there any reason we should vote against this?

I don't know if there is any reason to vote against it, but one argument for it is that I'm understanding it to mean that it opens up the possibility for them to send out distributions based on the BCH fork.

[iCEBREAKER]

GBTC exists for only one reason: to provide an investment vehicle for exposure to Bitcoin.

Thus, Grayscale's fiduciary duty requires they preserve and maximize their investors' exposure to Bitcoin.

Grayscale should have sold their Trust's Bcash as soon as possible and returned the profit to investors in the form of Bitcoin (like a dividend reinvestment).

A single unit of GBTC represents <0.1BTC and that number inexorably dwindles as management fees are collected.

Bcash offerd GBTC an opportunity to restore all accumulated management fees plus a healthy bonus, meaning 1 unit of GBTC could have been worth >0.1BTC.

I was shocked to discover Barry Silbert instead chose to use his investors' money to play political games and sacrificed the free airdrop money for the sake of his notably unprofessional personal crusade against Core and their socioeconomic majority of users.

I'm 99% sure that's a regulatory violation if not also criminal embezzlement; I never gave Barry permission to use my share of GBTC's Bcash to create an entirely new Bcash Trust.

Going by the Wiki definition of embezzlement, Barry is going to fry for pulling this stunt.

Embezzlement is the act of withholding assets for the purpose of conversion (theft) of such assets, by one or more persons to whom the assets were entrusted, either to be held or to be used for specific purposes.[1] Embezzlement is a type of financial fraud, e.g. a lawyer might embezzle funds from the trust accounts of their clients; a financial advisor might embezzle the funds of investors; and a husband or a wife might embezzle funds from a bank account jointly held with the spouse.

Imagine some whale had 1000BTC worth of GBTC and thanks to Barry's scheming malfeasance lost the chance to gain 100BTC from his free, airdropped Bcash.

In what universe does that whale not call up his legal dept. and release the hounds?

The second paragraph is especially damning of Barry's notably perfidious intrigues in support of controversial hard forks:

Directors of corporations, in fulfilling their managerial responsibilities, are charged with certain fiduciary duties.  The primary duties are the duty of care and the duty of loyalty.

    Duty of Care: This duty requires that directors inform themselves “prior to making a business decision, of all material information reasonably available to them.”  Whether the directors were informed of all material information depends on the quality of the information, the advice available, and whether the directors had “sufficient opportunity to acquire knowledge concerning the problem before action.”  Moreover, a director may not simply accept the information presented.  Rather, the director must assess the information with a “critical eye,” so as to protect the interests of the corporations and its stockholders.
    
    Duty of Loyalty: As the Delaware Supreme Court explained in Guth v. Loft, 5 A.2d 503, 510 (Del. 1939): “Corporate officers and directors are not permitted to use their position of trust and confidence to further their private interests. . . . A public policy, existing through the years, and derived from a profound knowledge of human characteristics and motives, has established a rule that demands of a corporate officer or director, peremptorily and inexorably, the most scrupulous observance of his duty, not only affirmatively to protect the interests of the corporation committed to his charge, but to refrain from doing anything that would work injury to the corporation, or to deprive it of profit or advantage which his skill and ability might properly bring to it, or to enable it to make in the reasonable and lawful exercise of its power.”

IIRC, Grayscale initially announced they were doing the obviously right thing (liquidate Bcash ASAP, then return Bitcoin to Bitcoin Investment Trust investors).

But then Barry saw another way to profit from his DCG's war on Core, and we've all noted how much that guy loves marketing toxic assets like Bcash.

[marcus_of_augustus]

^^^ sounds like GBTC has become Barry's little toy fund to pull political shennaigan's, did I read that right? Maybe we could hook him up with cypherdoc and the other earlier days miscreants to complete the circle?

[centralbanksequalsbombs]

Uh, yah....seems like many here are already privy to DCG's game.

Bad Actors:
DCG = DIGITAL CURRENCY GROUP (Barry Silbert, Jeff Garzik, coinbase, bitpay, etc) supports FUD & have/will try to infiltrate & eventually shutdown bitcoin.
r/btc reddit thread and (the other) company-controlled bitcoin website (bitcoin.com) also spread FUD but then try to accuse others of spreading FUD, LOL? Why do they push hard on altcoins (bitcoin cash, ethereum, FUD?)  Why do they push for forks?

Forks creating scamchains are a courtesy brought to you by DCG group of companies led by Barry Silbert with his fellow minion Jeff Garzik and friend Roger Ver. Central banks love to fund their seeders who in turn fund DCG operations so they can get inside the community to circumvent Bitcoin's progress and try to destroy bitcoin.

Luckily their attempts have been marked by continuous grand failed altcoins...
"Bitcoin Classic" failure
"Bitcoin XT" failure
"Bitcoin Unlimited" failure
"Bitcoin Cash" failure
coming soon..."Bitcoin Segwit2x" (BTC1) failure

[mmortal03]

GBTC is still trading sideways versus BTC for the last month or so. Very interesting.

[mmortal03]

GBTC was discussed on TV (Bloomberg): https://www.reddit.com/r/Bitcoin/comments/76rdbm/investment_companies_can_soon_get_in_huge_pump/

[manchester93]

GBTC exists for only one reason: to provide an investment vehicle for exposure to Bitcoin.

Thus, Grayscale's fiduciary duty requires they preserve and maximize their investors' exposure to Bitcoin.

Grayscale should have sold their Trust's Bcash as soon as possible and returned the profit to investors in the form of Bitcoin (like a dividend reinvestment).

A single unit of GBTC represents <0.1BTC and that number inexorably dwindles as management fees are collected.

Bcash offerd GBTC an opportunity to restore all accumulated management fees plus a healthy bonus, meaning 1 unit of GBTC could have been worth >0.1BTC.

I was shocked to discover Barry Silbert instead chose to use his investors' money to play political games and sacrificed the free airdrop money for the sake of his notably unprofessional personal crusade against Core and their socioeconomic majority of users.

I'm 99% sure that's a regulatory violation if not also criminal embezzlement; I never gave Barry permission to use my share of GBTC's Bcash to create an entirely new Bcash Trust.

Going by the Wiki definition of embezzlement, Barry is going to fry for pulling this stunt.

That's a really far reach. As far as the trust is concerned, Bcash =/= Bitcoin, and legally it certainly can't be declared a dividend (I'd be very curious to see a coherent argument to the contrary), so that logic is moot. I can't find any justification to expect any obligations regarding Bcash. It may function as a dividend to BTC holders in practice, but that doesn't confer legal obligations on GBTC.

There could be thousands of hard forks; is GBTC expected to split the trust's coins for every one of them? Even before we consider lack of replay protection in some forks, there are risks involved in doing so. What if actual Bitcoin were lost in trying to recover these shit tokens?! Where do creditors' best interests really lie, then? Especially when there is nothing in the terms about custodial responsibility for altcoins?

Further, it's absurd to expect the trustee to sell at a particular price. What if Bcash rose to 0.5BTC/coin? Then people like you would be making the opposite complaint...

[iCEBREAKER]

GBTC exists for only one reason: to provide an investment vehicle for exposure to Bitcoin.

Thus, Grayscale's fiduciary duty requires they preserve and maximize their investors' exposure to Bitcoin.

Grayscale should have sold their Trust's Bcash as soon as possible and returned the profit to investors in the form of Bitcoin (like a dividend reinvestment).

A single unit of GBTC represents <0.1BTC and that number inexorably dwindles as management fees are collected.

Bcash offerd GBTC an opportunity to restore all accumulated management fees plus a healthy bonus, meaning 1 unit of GBTC could have been worth >0.1BTC.

I was shocked to discover Barry Silbert instead chose to use his investors' money to play political games and sacrificed the free airdrop money for the sake of his notably unprofessional personal crusade against Core and their socioeconomic majority of users.

I'm 99% sure that's a regulatory violation if not also criminal embezzlement; I never gave Barry permission to use my share of GBTC's Bcash to create an entirely new Bcash Trust.

Going by the Wiki definition of embezzlement, Barry is going to fry for pulling this stunt.

That's a really far reach. As far as the trust is concerned, Bcash =/= Bitcoin, and legally it certainly can't be declared a dividend (I'd be very curious to see a coherent argument to the contrary), so that logic is moot. I can't find any justification to expect any obligations regarding Bcash. It may function as a dividend to BTC holders in practice, but that doesn't confer legal obligations on GBTC.

There could be thousands of hard forks; is GBTC expected to split the trust's coins for every one of them? Even before we consider lack of replay protection in some forks, there are risks involved in doing so. What if actual Bitcoin were lost in trying to recover these shit tokens?! Where do creditors' best interests really lie, then? Especially when there is nothing in the terms about custodial responsibility for altcoins?

Further, it's absurd to expect the trustee to sell at a particular price. What if Bcash rose to 0.5BTC/coin? Then people like you would be making the opposite complaint...

I already committed to the position that GBTC's Bcash/Bgold/Bcash2X/Clams2X/etc. should be sold dumped for BTC ASAP, so please STFU with the "people like you" accusations.

If Barry was not using Bcash misappropriated from his investors to start his Bcash Trust, you would certainly have a great point about potential for "thousands of hard forks."

But that's not the world we live in.  Here, Barry *is* actively maneuvering to claim (rather than ignoring) GBTC's Bcash, but in a way that furthers his personal war against Core using other people's money rather than helping GBTC do its job of maximizing investors' BTC exposure.

You may find "justification to expect obligations regarding Bcash" by simply reading the press release about how/why/when Grayscale intends to distribute Bcash Trust shares to those who held GBTC at fork time.

Now that we've established Bcash obligations definitely exit, re-read the bit you omitted from my previous post.  Here, I'll make it easy for you to see the Important Words.

Duty of Loyalty: As the Delaware Supreme Court explained in 1939:

“Corporate officers and directors are not permitted to use their position of trust and confidence to further their private interests

Public policy...demands of a corporate officer or director...refrain from doing anything that would work injury to the corporation, or to deprive it of profit or advantage which his skill and ability might properly bring to it.

It appears the rest of us are arguing about specific details (IE DGC-vs-Core-based conflicts of interest and maximizing investor BTC exposure) about proper management of GBTC's Bcash obligations while you're still stuck trying to understand why they exist in the first place.

If Barry weaponizes (at cost to neutral investors) GBTC's Bcash and Bcash2X coins for use in his parasitic conglomerate's asinine war against Core, it will not go well for him.

GBTC investors should not tolerate Barry abusing his position of trust to further his private interest (DGC firing Core) and thereby depriving GBTC of profit his skill and ability might properly bring it.

If we vote to condone spinning off every anti-Core hard fork into a new Trust, I'll be happy to cash out my 2000% profit and buy more gold/silver mining stocks.

[mmortal03]

If we vote to condone spinning off every anti-Core hard fork into a new Trust

Is that what's happening, or will they just be providing distributions/dividends to GBTC shareholders?

[pisston]

If we vote to condone spinning off every anti-Core hard fork into a new Trust

Is that what's happening, or will they just be providing distributions/dividends to GBTC shareholders?

Generally I really do not like the moment that forks are formed very often. Although if you recall the split in August, then no problem. It did not cause, even the Bitcoin double could be a prototype of a solid price. But what will happen in November, it is very difficult to predict and it makes you uncomfortable.

[iCEBREAKER]

If we vote to condone spinning off every anti-Core hard fork into a new Trust

Is that what's happening, or will they just be providing distributions/dividends to GBTC shareholders?

That's the latest version of what Barry & The Bankster Boys want to happen.

The original plan was to dump the Bcash ASAP and return the BTC profit to shareholders, as is their entitlement.

It's hard to tell what's happening because Grayscale keeps changing their story as it evolves from honorable intentions to outright embezzlement.

Grayscale originally announced it was going to do the right thing (inducing investors including myself to hold GBTC through the Bcash fork rather than sell it before).

News provided by Grayscale Investments, LLC
Jul 28, 2017

The Sponsor currently expects to cause the Trust to liquidate any Bitcoin Cash associated with the Bitcoin held by the Trust and to cause the proceeds of such liquidation to be distributed on a pro rata basis to holders of units of the Trust.  It is expected that any such distribution would be made only after allowing time for evaluation of the market for Bitcoin Cash and consideration of the manner in which to liquidate such Bitcoin Cash, which may be months after the fork occurs. As part of the evaluation of the market for Bitcoin Cash, the Sponsor expects to consider, among other factors, whether there are any appropriately regulated exchanges that have listed Bitcoin Cash. In addition, such distribution, if and when made, would be to owners who held Trust units on a specified record date, which is anticipated to be the day the fork occurs. The amount of any distribution will be net of expenses of the Sponsor and the Trust, including costs associated with liquidation and distribution.

But right after the fork, despite the large numbers of exchanges immediately facilitating the dumping of Bcash for Bitcoin, Grayscale started using weasel words like "considerations" and "concerns" to lay the groundwork for a future pivot.

News provided by Grayscale Investments, LLC
Aug 02, 2017

The Sponsor can offer no assurance as to whether or when any distribution relating to Bitcoin Cash may occur. Any such distribution may be delayed or prevented due to technical, regulatory, commercial or other considerations, including security concerns. The amount of any potential distribution will be made only after allowing time for evaluation of the market for Bitcoin Cash and consideration of the manner in which to liquidate such Bitcoin Cash, which may be months after the date of this release. It is anticipated that any potential distribution would be net of expenses of the Sponsor and the Trust, including costs associated with liquidation and distribution.

Still, the "anticipated" plan is to dump Bcash ASAP and return the BTC to their proper owners.  This is just boilerplate saying it will take a while and please be patient, right?

Nope.  Here comes the pivot.  Now we see what Barry & The Boys were planning from the start of their anti-Core Bcash attack fork.

News provided by Grayscale Investments, LLC
Sep 06, 2017

To maximize shareholder value, the Sponsor has begun a process with the Trust's professional advisers to evaluate, among other options, the feasibility of forming an entity to hold the Bitcoin Cash and distributing interests in that entity to the Trust's shareholders. As part of that evaluation, the Sponsor expects to engage in discussion with relevant regulators, including the U.S. Internal Revenue Service and the U.S. Securities and Exchange Commission, to ensure that the Trust continues to be treated as a grantor trust for U.S. federal income tax purposes. Receiving regulatory guidance in respect of such a distribution, while prudent, may be a lengthy process of several months or more.  There can be no assurance regarding whether or when the Trust will obtain such guidance.

How nice of Barry to take our Bcash and weaponize it for his social, economic, and 51% attacks against Core.

I'm *sure* GBTC holders will benefit if Barry's attack works and Core is abandoned by devs not interested in working for the DCG and its Blockchain Alliance allies.

It's great Barry found a way to get us GBTC holders to pay for the 10s millions of dollars it takes to get something like GBCH designed/lawyered/approved/implemented/insured. /s

[mmortal03]

It's great Barry found a way to get us GBTC holders to pay for the 10s millions of dollars it takes to get something like GBCH designed/lawyered/approved/implemented/insured. /s

Thanks for the sources and everything -- good post. I'm taking all of this to mean that we'd get shares of the "GBCH" whenever it comes out. The tricky thing about that would seem to be that the only reason that GBTC can even exist is by way of that "accredited investor year wait" loophole. How would regular shareholders even be able to get shares of such a "GBCH" in a reasonable timeframe, if they actually had to wait for a year before any shares would even be available to the general market? I can't imagine that creating another such pink sheet fund with that loophole would be the most expedient, legal way to get the proportional BCH value distributed to shareholders.