Winklevoss: Trying to pump before they dump?

[I_bitcoin]

PUMP:

"The brothers are unsurprisingly bullish on Bitcoin. Cameron’s conservative bet is that its US dollar valuation will surpass $40,000 per coin — a potentially colossal figure — as he explained in a response to one Reddit user: "small bull case scenario for Bitcoin is a 400 billion USD dollar market cap, so 40,000 USD a coin, but I believe it could be much larger. When this will happen, if it happens, I don’t know, but if it happens, it will probably happen much faster than anyone imagines.""

DUMP:

"The twins are in the process of setting up the Winklevoss Bitcoin Trust, a listed fund to manage their Bitcoin wealth and bring greater legitimacy to the virtual currency. Papers for the initial public offering were filed in July, but the final decision is still pending. Due to regulations, Cameron was unable to discuss the trust in the AMA"

http://thenextweb.com/insider/2013/12/15/winklevoss-twin-says-bitcoin-valuation-will-top-40k-plays-down-silk-road-closure/#!p2vds

"In a move that could come to mark a major new era for the virtual currency, Tyler and Cameron Winklevoss have filed to float their stash of Bitcoins on a conventional stock exchange. The former Olympic rowers have lodged papers for a $20m initial public offering of the Winklevoss Bitcoin Trust, which holds their Bitcoin wealth, and would be managed by the Winklevoss' investment fund, Math-Based Asset Services. "

http://www.telegraph.co.uk/finance/currency/10157710/Winklevoss-twins-20m-plan-to-make-Bitcoin-mainstream.html

Obviously they want the price to be as high as possible, before they dump via this fund. This is a clever tactic, as the dumping via a trust can support the price (wow new trust, look at the adoption) and you can get rid of your coins. If you dump on an exchange it leads to total collapse.

If they are so convinced of this high price, why sell the position. Sounds like a scam to me.

They have been talking about this for quite some time.   Reddit is not the first we have heard the proposal.   FWIW...

[Frost000]

I seriously doubt that they'll simply dump everything they've got. Maybe a few coins here and there, but their entire position? Nope, no way.

They've been strong supporters for a while now and it really does seem genuine.

[cbeast]

They don't seem to be playing anything diabolical. They just seem like two regular egotistical overachieving privileged dudes that want to become tycoon billionaires. 

[porc]

Poor Winkleviii 

People are "out-dumping" them. LOL.

[infinitybo]

Plus that's only open to accredited investors, with a minimum investment of 25k$.

[theecoinomist]

That's preposterious and you know it OP, the Winklevii will of course sell off a portion and collect annual maintenance fee similar to the Exante Fund.

[odolvlobo]

That's preposterous and you know it OP.

It is an interesting spin on the facts, but it's not preposterous. It really depends on how much of their bitcoin hoard they deposit into the fund.

The twins own about 100 million BTC. Suppose they deposit the entire amount into the fund and 10,000 shares of the fund are sold per month. Here is a table showing their holdings:

Month	| Bitcoins Held	| Shares Held	| Dollars Held (@$40k/BTC)
-1	100,000	0	0
0	0	100,000	$0
1	0	90,000	$400,000,000
2	0	80,000	$800,000,000
3	0	70,000	$1,200,000,000
4	0	60,000	$1,600,000,000
5	0	50,000	$2,000,000,000
6	0	40,000	$2,400,000,000
7	0	30,000	$2,800,000,000
8	0	20,000	$3,200,000,000
9	0	10,000	$3,600,000,000
10	0	0	$4,000,000,000

As you can see in this scenario, they have dumped their entire bitcoin hoard in 10 months by setting up the fund and selling all their shares.

[yatsey87]

Have they said what they actually plan to do with their holdings? Are they going to keep them for x amount of time and then sell, or what? If the Winkle says he expects them to rise to 40k, surely they'll be keeping them to nearer that figure?

[odolvlobo]

Have they said what they actually plan to do with their holdings? Are they going to keep them for x amount of time and then sell, or what?

There is no purpose in setting up the fund if they don't intend to sell the shares. They don't have to sell all of their shares, but they have an incentive to sell a large portion.

If the Winkle says he expects them to rise to 40k, surely they'll be keeping them to nearer that figure?

You don't know that they actually expect it to go that high. They may be telling everyone $40k, but actually plan to dump at $10k.

[yatsey87]

Have they said what they actually plan to do with their holdings? Are they going to keep them for x amount of time and then sell, or what?

There is no purpose in setting up the fund if they don't intend to sell the shares. They don't have to sell all of their shares, but they have an incentive to sell a large portion.

If the Winkle says he expects them to rise to 40k, surely they'll be keeping them to nearer that figure?

You don't know that they actually expect it to go that high. They may be telling everyone $40k, but actually plan to dump at $10k.

I wonder if they plan on holding them all with the view to sell, or slowly sell them off bit by bit over time? Have they stated what their plan for their holdings is?

And yeah, obviously 40k is pure speculation, but maybe they'll get rid after they hit a certain amount, like you said. I think 10k isn't too ridiculous a number for BTC, especially once it gains some mainstream acceptance.

[geerdt]

Why would some rich entrepreneurs like them not feel the same way about BTC that we do?

[yatsey87]

Why would some rich entrepreneurs like them not feel the same way about BTC that we do?

I'm sure they do, but I think people just don't trust them or are suspicious. They seem fairly sound to me.

[Noruka]

If they are so convinced of this high price, why sell the position.

Some (especially those with several billions or even trillions) might avoid Bitcoin as a currency with public information available about two people owning ~1% of it – knowing they bought "low" compared to the current exchange rate and they might need some money to get their IPO started. It simply can't go – or at least it won't stay at $40,000 with a wealth distribution like this – greed and the risk of someone dumping 1% holds it down – that's why you diversify…

That being said: I think their intentions are good.

Yes, this another major problem for bitcoin, however they cant solve it, as they are tiny in comparison to some other early adopters. We already have a huge one sided distribution in favor of early adopters, who hold over 50% of the bitcoin supply. This design was built in on purpose, Satoshi himself doesnt seem to mind otherwise he would have designed it differently. Again I find it peculiar to say the least, that they are so convinced of the $40000 price tag but already want to dump.

To me the explanation that they just want OUT is more straightforward than what you point to, as they cant fix the design flaw (if they think distribution is one).

you do realize that is how all long term investments work right!? the early adopters are the ones that put up the most risk and are the ones that benefit the most if the investment grows. Thats why there are people that become early adopters for higher risk and once the company/website/crypto coin becomes too mainstream they sell and move on to the next big hit. You could then technically say any investment, even a start-up company, is a "ponzi scheme" where the earlier investors make the majority of the money in the long term. How dare people buy in early to grow an investment!

/facepalm

[kgo]

Have they said what they actually plan to do with their holdings? Are they going to keep them for x amount of time and then sell, or what?

There is no purpose in setting up the fund if they don't intend to sell the shares. They don't have to sell all of their shares, but they have an incentive to sell a large portion.

Sure there is.  Administration fees.  They could setup a fund completely independent of their personal holdings and buy bitcoins on the open market.  They could put their funds in the ETF, and buy/sell for other people via the ETF without touching their own shares at all.  They'll make a profit on admin fees regardless of whether they sell their personal stash.

[porc]

Have they said what they actually plan to do with their holdings? Are they going to keep them for x amount of time and then sell, or what?

There is no purpose in setting up the fund if they don't intend to sell the shares. They don't have to sell all of their shares, but they have an incentive to sell a large portion.

Sure there is.  Administration fees.  They could setup a fund completely independent of their personal holdings and buy bitcoins on the open market.  They could put their funds in the ETF, and buy/sell for other people via the ETF without touching their own shares at all.  They'll make a profit on admin fees regardless of whether they sell their personal stash.

Read the link.

"Winklevoss have filed to float their stash of Bitcoins on a conventional stock exchange."

[yatsey87]

Have they said what they actually plan to do with their holdings? Are they going to keep them for x amount of time and then sell, or what?

There is no purpose in setting up the fund if they don't intend to sell the shares. They don't have to sell all of their shares, but they have an incentive to sell a large portion.

Sure there is.  Administration fees.  They could setup a fund completely independent of their personal holdings and buy bitcoins on the open market.  They could put their funds in the ETF, and buy/sell for other people via the ETF without touching their own shares at all.  They'll make a profit on admin fees regardless of whether they sell their personal stash.

Read the link.

"Winklevoss have filed to float their stash of Bitcoins on a conventional stock exchange."

So you can buy shares in a stash of Bitcoins?

[Bostonbitcoin]

No, sorry, OP doesn't understand how the trust would work or how public markets work.

The Winklevoss bros would still own a majority share in the trust which would not only still own BTC but be REQUIRED to keep owning BTC by its prospectus.

[odolvlobo]

... The Winklevoss bros would still own a majority share in the trust ...

I might have missed it but I don't see anything in the prospectus requiring the Winklevii to own a majority of the shares of the trust.

[kgo]

Have they said what they actually plan to do with their holdings? Are they going to keep them for x amount of time and then sell, or what?

There is no purpose in setting up the fund if they don't intend to sell the shares. They don't have to sell all of their shares, but they have an incentive to sell a large portion.

Sure there is.  Administration fees.  They could setup a fund completely independent of their personal holdings and buy bitcoins on the open market.  They could put their funds in the ETF, and buy/sell for other people via the ETF without touching their own shares at all.  They'll make a profit on admin fees regardless of whether they sell their personal stash.

Read the link.

"Winklevoss have filed to float their stash of Bitcoins on a conventional stock exchange."

Actual SEC filing doesn't say anything about where the bitcoins come from, and indicate there is no cap on the number of coins the trust can hold.  It's not tied to their personal bitcoin holdings, although they could sell their bitcoins into the trust, line anyone else.

[vadoff]

They invested at ~$100. If they wanted to dump, I think they would've done it when it plateaued near $1200 for some time.
I've seen some of their AMAs, and it seems like they truly believe in the currency.

Not saying they won't dump... but probably not until the value hits at least $10k+.