GBTC Bitcoin Investment Trust Observer

[gotmilk_]

Will we see anther big buy today? 

[gog1]

about $800 k

[hongl3liang]

bought 2000+ btc

[JorgeStolfi]

bought 2000+ btc

Something seems to have changed...

Their buys used to have an "organic" feel, somehow inversely related to the BTC price.  But then suddenly, after months of stagnation, we had two false starts, then three buys of 6000-7000 BTC on three successive weeks.  This 2000 BTC buy, if confirmed, breaks this new pattern to some extent, but still goes against the general price trend.

Could this apparent change be related to that still-mysterious SEC letter -- allegedly prohibiting withdrawals (liquidation) of shares, but not deposits (investments)?

[opossum]

In principle, yes. That's why I've said for a while now, in opposition to some of the uberbulls, that if truly big capital wants to enter, they will probably do so off-exchange, by contractually binding large mining operations' outputs to themselves. That might still leave traces in the overall supply situation and have some effect on on-exchange prices, but probably be less of an impact than if they'd outright buy the same amounts on-exchange.

I would somewhat doubt that the miners would sell their bitcoin in advance via futures contracts like this as they would have no way of knowing what the difficulty will be in the future and as a result has no way of knowing their future mining revenue in terms of bitcoin and would be very risky for them.

SecondMarket buys are publicly visible (or at least: the outcome is visible publicly, we don't know where and how they're getting their orders filled), that much is clear. So the psychological effect (if it exists) does apply.

I would say that secondmarket likely gets it's bitcoin from large holders aka whales (maybe from contracts to buy at market rates at anytime in the limited future) or potentially buys on exchanges outright

[jl2012]

2132XBT bought yesterday. I have a feeling that this could be the last batch of Tuesday buying

[JorgeStolfi]

I would somewhat doubt that the miners would sell their bitcoin in advance via futures contracts like this as they would have no way of knowing what the difficulty will be in the future and as a result has no way of knowing their future mining revenue in terms of bitcoin and would be very risky for them.

A mining operator who is building a multimillion mining facility should want to secure a contract that guarantees a return and shifts the risks (and any extraordinary gains) to the VC investors, as much as possible.  Say, the investor gives N million dollars every month for M months, and in return keeps all the coins that the installation mines during that time frame, independently of the difficulty and price. 

Of course, they may not find investors in those terms, and may have to share the risk and unpredictable profits.

[oda.krell]

I would somewhat doubt that the miners would sell their bitcoin in advance via futures contracts like this as they would have no way of knowing what the difficulty will be in the future and as a result has no way of knowing their future mining revenue in terms of bitcoin and would be very risky for them.

A mining operator who is building a multimillion mining facility should want to secure a contract that guarantees a return and shifts the risks (and any extraordinary gains) to the VC investors, as much as possible.  Say, the investor gives N million dollars every month for M months, and in return keeps all the coins that the installation mines during that time frame, independently of the difficulty and price. 

Of course, they may not find investors in those terms, and may have to share the risk and unpredictable profits.

This is probably not that far from what is happening, but I doubt it is completely "independent [...] of [market] price.". Quite possibly a mix... I can see two ways big operations would hedge their risks: a contract at a fixed price, high enough to cover their costs. I doubt that however, since there is option two, which seems economically more favorable to the mining operation: long running contract loosely based on market price (perhaps based on some slow average, or some other filter that takes out the extremes), then hedging against the unknown worst case, i.e. price dropping below profitability, through futures.

[hongl3liang]

yesterday bought 2100+ (11/25/2014)
today bought 4500+ (11/26/2014)
two day together, another ~ $2.5 M was added.

[jl2012]

yesterday bought 2100+ (11/25/2014)
today bought 4500+ (11/26/2014)
two day together, another ~ $2.5 M was added.

updated. This is most likely a single entity, and it has spent 10 million dollars just in November

[hongl3liang]

who knows, it might continue next week

[Alonzo Ewing]

yesterday bought 2100+ (11/25/2014)
today bought 4500+ (11/26/2014)
two day together, another ~ $2.5 M was added.

updated. This is most likely a single entity, and it has spent 10 million dollars just in November

What do you mean?  Isn't this just SecondMarket buying?

[JorgeStolfi]

This is most likely a single entity, and it has spent 10 million dollars just in November

What do you mean?  Isn't this just SecondMarket buying?

It is assumed that SMBIT only buys BTC when some client buys their shares (10 shares = 1 BTC).  If that is true, there seems to be a client who buys 2.5 million dollars worth of shares each week.  But we do not know, really.

[davidorentol]

How many bitcoins they have Total   ? 100k ? 120k ?

[marvinrouge]

How many bitcoins they have Total   ? 100k ? 120k ?

It's on first post -> 134364 btc right now

[gotmilk_]

yesterday bought 2100+ (11/25/2014)
today bought 4500+ (11/26/2014)
two day together, another ~ $2.5 M was added.

updated. This is most likely a single entity, and it has spent 10 million dollars just in November

Nice  4th week in a row!!

[wachtwoord]

yesterday bought 2100+ (11/25/2014)
today bought 4500+ (11/26/2014)
two day together, another ~ $2.5 M was added.

updated. This is most likely a single entity, and it has spent 10 million dollars just in November

Nice  4th week in a row!!

Yeah this is a very good indicator of true interest. And meanwhile Bitcoins on exchanges get cheaper, man these markets are inefficient.

[inca]

yesterday bought 2100+ (11/25/2014)
today bought 4500+ (11/26/2014)
two day together, another ~ $2.5 M was added.

updated. This is most likely a single entity, and it has spent 10 million dollars just in November

Nice  4th week in a row!!

Yeah this is a very good indicator of true interest. And meanwhile Bitcoins on exchanges get cheaper, man these markets are inefficient.

Just wait

[wachtwoord]

yesterday bought 2100+ (11/25/2014)
today bought 4500+ (11/26/2014)
two day together, another ~ $2.5 M was added.

updated. This is most likely a single entity, and it has spent 10 million dollars just in November

Nice  4th week in a row!!

Yeah this is a very good indicator of true interest. And meanwhile Bitcoins on exchanges get cheaper, man these markets are inefficient.

Just wait

Long term free markets are highly efficient

[Melbustus]

This is most likely a single entity, and it has spent 10 million dollars just in November

What do you mean?  Isn't this just SecondMarket buying?

It is assumed that SMBIT only buys BTC when some client buys their shares (10 shares = 1 BTC).  If that is true, there seems to be a client who buys 2.5 million dollars worth of shares each week.  But we do not know, really.

I don't really understand why we're assuming that it's a single client. Secondmarket just updates the aggregate figures every week or so, as far as I can see; how are we reading anything about number of clients purchasing into that?