Winklevoss: Trying to pump before they dump?

[Lloydie]

IMHO:

The Winklevii are young and rich. Their reputation counts a lot to them because they still need it.

Even if they relinquished some btcs into the ETF, its not a big deal. It would be better than dumping on the market.

The etf is likely to bring net new money into the system. Therefore, btcs should rise in price. Why would anyone dump an asset that is rising in value?

Regulatory risks can't be ignored, therefore they could be doing this to recoup initial funds invested plus profits. The etf removes the binary outcome for the Winklevii. They make money either way but they make more if btcs go to $40k.

Please check Btc usage growth rates on bitcoinpulse to see for yourself that Btc adoption is expanding very rapidly. If you were the Winklevii, would you dump? I wouldn't. However, I would try to remove the binary outcome due to regulatory changes beyond my control.

[bitpop]

They're Jews, they'll get to 40k

[Hideyoshi]

This is not dumping. They will not be selling their bitcoins, they will be selling securities. They will still hold all bitcoins that they bought, but will simply allow others to invest in those bitcoins too.
To explain more specifically:
If they have many bitcoins, and sell them on market, these bitcoins will fill sell orders and will cause prices to fall. This is true. But they are not selling bitcoins directly on market, they are offering bitcoin backed securities at current price of bitcoins on market. So only possible market action is for people to buy "bitcoins" in form of these securities, and either keep the price same, or cause it to go up, depending on how they treat their system. If not many people buy these securities, they do not have to lower price to sell them off as quickly as possible, as they would if they were dumping bitcoins on exchange market. They already have bitcoins, and believe they will rise in value, so can earn income from that. They know that people will want to buy their product, and can wait patiently for those people to do so. And they can already make extra money on fees they will charge of those people who invested already.

At least this is how I understand their plan.

[iluvpie60]

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 are going to sell because they, unlike you all, understand Bitcoins will get completely fing trashed by altcoins. Bitcoins will never be worth more than 2,000 per. Altcoins are already better/faster transaction speed/less fees/use less energy/can be supported by less miners/blocks are generated faster.

You got to be a fing complete idiot to think your Bitcoins are going to be the number 1 coin forever. Within 2 years Nobody will give a flying F about Bitcoins. It will be all about Altcoins because they are better in every way. The more and more people who get into it, the more and more people will see that Bitcoins have no benefits over lets say, Feathercoin, and Peercoin.

PS I like swearing. lol idk.

[Adrian-x]

. Bitcoins will never be worth more than 2,000 per...

You got to be a fing complete idiot to think your Bitcoins are going to be the number 1 coin forever. Within 2 years Nobody will give a flying F about Bitcoins. It will be all about Altcoins...

We'll know this because Bitcointalk.org will change its name to altcointalk.org.

[CygnusX1]

1. Early adopters will need to liquidate some of their positions in order for bitcoin to appreciate. The rate that new coins are mined will not satisfy demand for new entrants. Major holders will have to sell off chunks of their position to newcomers allowing wealth to be more evenly distributed for the sake of the economy. The benefit though is that as new money flows into the economy, the value of each slice becomes much more valuable than it would if newcomers were not able to buy in.

2. A publicly traded trust is a brilliant way to get institutional money in the bitcoin system. Most of us can agree that one of the major issues holding back adoption of bitcoin is the difficulty of investing. Most people are not capable of figuring out all the steps to do it. There are also legal boundaries restricting where money can flow. For example, it is next to impossible right now for 401k and IRA money to invest in bitcoin. By creating a public trust, the Winklevoss are actually paving a path for these kinds of institutional funds to get into bitcoin. This is a win for anyone holding bitcoin.

It is naive to think that the Winklevoss are trying to scam. They are doing exactly what needs to be done to help grow the bitcoin economy. Yes, they will sell off some of their position and make money along the way but so will everyone else.

[odolvlobo]

This is not dumping. They will not be selling their bitcoins, they will be selling securities. They will still hold all bitcoins that they bought, but will simply allow others to invest in those bitcoins too.
...
At least this is how I understand their plan.

The trust works like this: The twins give their bitcoins to the trust in exchange for shares of the trust. Then, anyone that wants to buy shares in the trust buys shares from the twins through an exchange. That is how they dump their bitcoins (after pumping). When they deposit their bitcoins in the trust, they will no longer own those bitcoins (directly).

The argument that they are selling shares and not bitcoins is naive. It is like saying that if you sell a private key you aren't selling the bitcoins that it holds. The shares represent ownership of bitcoins, so they are selling bitcoins in effect when they sell their shares.

Finally, an explanation of pump and dump: someone buys shares/bitcoins/altcoins at a low price. Then they generate huge interest in the shares/bitcoins/altcoins through various methods (this is the "pump"). Then when the price has risen, they sell their shares/bitcoins/altcoins at the higher price (this is the dump). Note that the "dump" doesn't necessarily cause the price to drop. The drop usually comes afterward when the all the interest caused by the "pump" dissipates. Pump and dump is illegal when the "pump" consists of spreading and promoting lies and unrealistic expectations.

[Hideyoshi]

In this case there is no such pump. Winkelvoss were not why bitcoin price went up. They just made good decision at good time, and everyone else made price go up. They seem to understand why bitcoin is important, and why price will keep going up, and it would be against their self interests to dump what they believe in.

[bitpop]

I don't see them pumping or supporting us in any way

[brush242]

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.

Agreed. For three reasons: A) No one who intends on doing such a thing--even if they are doing it ethically--does not file paperwork to insure that the DOJ generally, and the SEC particularly, watches them like a hawk. 2) Just by announcing it, they have millions of people that mine/invest watching them, very, very, carefully. And D) It's just another way to invest in BTC, just like any other investment, Mutual funds, index funds, SPDRs, what have you. If they set the program up such that they have a duty of fiduciary responsibility, that limits their options as well, period.

[nodroids]

Why would you doubt that BTC will go into the thousands when a. we've already been there in just 4 years, b. the paradigm is a factor of 10 more efficient than gold and other financial services for holding liquid reserves, c. the transparent blockchain hasn't even started to express it's innovative power for economics, d. governments have no choice but to QEternity or face the starving hordes, e. $1 Trillion would represent less than 1/10th of one percent of all repo, bonds, derivatives, deposits etc.,, markets hosted by the banks.

[undeadbitcoiner]

Price will reach 40,000+ there is no any doubt but If the really want Price to reach 40K very soon as fast as anyone can imagine then they must move there Bitcoins, If bitcoin moves and its traded widely then in a way that is easily perceived or understood price will reach 50K + very soon.

[timmmers]

Personally I think they are in too deep to dump. Nothing to do with the economics as such, more their reputation.
They have been so strong for so long about their belief in bitcoin that their reputation would be damaged badly by a u-turn made to make a few bucks. Who'd trust a word they said in the future..assuming they intend to stay in some financial business in their long futures? "Oh they said that about bitcoins just before they jumped ship" would be said about whatever else they supported or got involved in. 

[Corelianer]

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 are going to sell because they, unlike you all, understand Bitcoins will get completely fing trashed by altcoins. Bitcoins will never be worth more than 2,000 per. Altcoins are already better/faster transaction speed/less fees/use less energy/can be supported by less miners/blocks are generated faster.

You got to be a fing complete idiot to think your Bitcoins are going to be the number 1 coin forever. Within 2 years Nobody will give a flying F about Bitcoins. It will be all about Altcoins because they are better in every way. The more and more people who get into it, the more and more people will see that Bitcoins have no benefits over lets say, Feathercoin, and Peercoin.

PS I like swearing. lol idk.

Altcoins are just Copycats that try to profit from the success of Bitcoin and if Bitcoin fails, all other Altcoins will fail. There is a huge ammount of money bond into Bitcoin, they are unlikely to move to another Crypto because the success of Bitcoin is not that the technical specifications are better than the other Altcoins, but that the people have gained trust over time.

I will tell you we will see the prices of Altcoins disconnecting from the Bitcoin price, when people realize they can make more with the original.
And then slowly we will see some Altcoins dissapear.

[jzcjca00]

it is next to impossible right now for 401k and IRA money to invest in bitcoin.

It does require some expense and effort to invest 401k and IRA money in bitcoins, but I think "next to impossible" is an overstatement.

There are companies (like http://www.broadfinancial.com/self-directed-ira) that for about $1500 will help you set up a self-directed IRA and an IRA LLC investment company.  You manage the IRA LLC and have a wide range of investment options.  They are commonly used for holding real estate in IRAs, but bitcoins are 100% legal, as well.

If you do this with a Roth IRA, as long as you follow the rules and don't withdraw until age 59 1/2, you will never have to pay any taxes on the gains!  So if you transfer or rollover $10,000 to a Roth IRA LLC, and bitcoin goes up by a factor of 1000, you wind up with $1 million completely tax free!

I think it's worth a small investment of time and money up front to avoid paying capital gains taxes on the potentially huge gains bitcoin may bring us!

See https://bitcointalk.org/index.php?topic=396783.0 for details.