SecondMarket CEO: Wall Street Will Put 'Hundreds of Millions' Into Bitcoin

[spiderbrain]

I think it's funny when people say big investment funds wouldn't put people's money into bitcoin. These are the same people who bought greek debt and collateralised sub-prime mortage products. They are insane and they have trillions.

[spiderbrain]

Why isn't the value of Bitcoin going up quickly right now?

People who have recently become surprisingly rich will naturally sell some of their bitcoins. doesn't mean they're not into the project, just balencing things out a bit. As these people get more comfortable with how many bitcoins they own they'll stop selling and the price will start creep up again. I'm guessing that there is a lot of big money waiting on the sidelines for a bottom before they start buying in. Where's the bottom before the next leg up? Who knows....

[xDan]

They are insane and they have trillions.

I love this! Hope you are right

[JimboToronto]

Are people with a ton of Bitcoin slowly selling theirs, making this a type of Ponzi scheme after all?

http://www.youtube.com/watch?v=7u4F8cpzqao

[Zangelbert Bingledack]

It takes time for people to research Bitcoin and learn how to store it, etc. You think people are just going to see the news and know what the hell to do to make a secure wallet? That they even comprehend what Bitcoin is after seeing it in a news article? It takes several weeks at minimum, and the price just rose nearly an order of magnitude. These are seismic wealth increases for holders so they are being sold into, as should be well expected. Do you expect an early adopter to maintain a 90% crypto portfolio, and then a 99% one, without rebalancing!? Until the media hype overpowers that effect, and it does look like this past week may be getting there (meaning a boost a few weeks from now), the price will consolidate.

[Rygon]

I think the rise we saw to $1200 was frontrunning the development of a Bitcoin IRA through SecondMarket. This "story" is just reinforcing what everyone already knew. If those hundreds of millions actually come through, we'll see a steady increase in price over months, not some big jump.

IMO, we'll see another leap in prices when the Winkelvoss ETF is closer to launching.

[Manticore]

Self-directed IRAs from the providers mentioned can basically invest in anything so there is no news there. You can setup an LLC and use your IRA to invest in illiquid investments like real estate. This is why it's called a 'self-directed' IRA.

Being picked up by wealth management platforms would be big news, though. I can see this happening -- I just wonder if it will be a thing for retail investors or more for private clients.

[SnowMonkey_CG]

Correct me if I'm wrong.

Current market cap is roughly $900 x 12m coins = $10.8bn

To go to $10,000/BTC market cap (with current coin count) would have to be $10,000 x 12m = $120bn.

So to go to those levels we need an extra $109bn invested... suddenly wall street's 'hundreds of millions' doesn't seem so great, not even pushing us to $1000?

I must be making a mistake in the maths, please point it out.

[Ivanhoe]

Correct me if I'm wrong.

Current market cap is roughly $900 x 12m coins = $10.8bn

To go to $10,000/BTC market cap (with current coin count) would have to be $10,000 x 12m = $120bn.

So to go to those levels we need an extra $109bn invested... suddenly wall street's 'hundreds of millions' doesn't seem so great, not even pushing us to $1000?

I must be making a mistake in the maths, please point it out.

You are assuming that every coin is bought for at least $ 10 000 dollar here, that's your mistake.

[SnowMonkey_CG]

Aha!  Thanks of course, the price is bought UP to $10k.  Makes sense now.

[superresistant]

It takes time for people to research Bitcoin and learn how to store it, etc. You think people are just going to see the news and know what the hell to do to make a secure wallet? That they even comprehend what Bitcoin is after seeing it in a news article? It takes several weeks at minimum, and the price just rose nearly an order of magnitude. These are seismic wealth increases for holders so they are being sold into, as should be well expected. Do you expect an early adopter to maintain a 90% crypto portfolio, and then a 99% one, without rebalancing!? Until the media hype overpowers that effect, and it does look like this past week may be getting there (meaning a boost a few weeks from now), the price will consolidate.

People have no idea what is a Dollar. Still, they use it everyday.

[Luckybit]

Are people with a ton of Bitcoin slowly selling theirs, making this a type of Ponzi scheme after all?

what? how selling by early adopters equates ponzi in your mind? many people who bought cheaper are taking profits when they see the moment is right (before a serious resistance), and that same thing happens in *every* market, why the hell would that be a ponzi? do you even know the definition?

He means a pyramid scheme. I am tired of people calling it a Ponzi scheme when they mean to say pyramid scheme. Bitcoin does have some pyramid scheme aura around it based on the fact that no one knows how many coins Satoshi has, and less than 50 addresses have almost half of all the coins in existence.

It's not a pyramid scheme though because those people will spend or cash out when their coins are worth millions or billions.

[Rygon]

Don't forget that these funds now make it more likely that we'll see fractional reserve banking in bitcoins, and options to short bitcoins using those additional funds. Regulators don't exactly have a great track record of verifying that commodity funds actually have possession of underlying assets (see gold and silver ETF's). And I doubt that the funds will be willing to disclose cold storage public addresses.

[sgbett]

I think it's funny when people say big investment funds wouldn't put people's money into bitcoin. These are the same people who bought greek debt and collateralised sub-prime mortage products. They are insane and they have trillions.

qft!

[piramida]

Aha!  Thanks of course, the price is bought UP to $10k.  Makes sense now.

And also don't forget that it does not take 50 actual billions to move the price to 10k, it just takes as much as orderbook depth on all exchanges, and that is usually a tiny bit of the total amount of coins (right now, about 1% of coins are in asks). So the approximate amount of money needed to take us to 10k today is about 500million only. Of course, there will be crashes and new coins would be coming to exchanges once the price grows, as happens now at 1k, etc etc, so to get the actual sustained value of 10k per coin there has to be several billion incoming, not 100 though. Still pretty realistic.

[BitchicksHusband]

Aha!  Thanks of course, the price is bought UP to $10k.  Makes sense now.

And also don't forget that it does not take 50 actual billions to move the price to 10k, it just takes as much as orderbook depth on all exchanges, and that is usually a tiny bit of the total amount of coins (right now, about 1% of coins are in asks). So the approximate amount of money needed to take us to 10k today is about 500million only. Of course, there will be crashes and new coins would be coming to exchanges once the price grows, as happens now at 1k, etc etc, so to get the actual sustained value of 10k per coin there has to be several billion incoming, not 100 though. Still pretty realistic.

Thanks for the excellent explanation.  Hopefully it will get people to stop the n × 12 million or n × 21 million calculations.

[David Rabahy]

Suppose there are 10 things.  Things 1 through 9 just happened to be bought at $1 each.  According to those trades, the market capitalization is 10 * $1 = $10.  But, how much is the last one really worth?  Suppose the seller regrets selling the first 9 so cheaply.  So, they sell the last one for $100 and just so happens to find a buyer.  Now based on the last/latest sale, the market capitalization is 10 * $100 = $1,000 *but* only $109 have changed hands.

My questions is, "How much fiat has changed hands so far in the exchange of Bitcoins?"

[Mirsad]

Factor 10-100 below Market Cap.
Just check the amount of coins traded.

99% are in cold storage. It's impossible for everyone to get rich.
There isn't even enough to pay everyone 50$ per coin.

Hopefully there won't be a bankrun in bitcoin or we'll see a 99% crash.

[hollowframe]

Factor 10-100 below Market Cap.
Just check the amount of coins traded.

99% are in cold storage. It's impossible for everyone to get rich.
There isn't even enough to pay everyone 50$ per coin.

Hopefully there won't be a bankrun in bitcoin or we'll see a 99% crash.

hasnt been thus far, but (shrug)

[windjc]

lol, this is coming from 2nd Market CEO, not reliable.

Why?

This is just an advertisement / press release on behalf of his platform, published on what looks like a source that is not reputable.

Wouldn't getting caught in a big fat lie hurt his little fund which has done fantastic so far? It seems like a big risk to take when you are already doing quite well.

Then again... humans! LOL.

I wouldn't say it's a big fat lie. Just unsubstantiated advertising.

Well... if it's not true, I would call it a big fat lie! LOL!

So... here we are.

http://blogs.marketwatch.com/thetell/2013/12/12/fidelity-halts-bitcoin-investments-from-iras/

This all seems to be a clusterfuck of misunderstanding. Second Market can take accredited investors IRA money. Including those with Fidelity. Its been that way for a while I believe. Fidelity responded to the "news" story yesterday by saying it wasn't open to their (regular) clients.