[Havelock] Bitcoin Difficulty Derivative (BDD)

[twentyseventy]

Round 3, Period 10, Day 9 Report - June 30, 2016

Balance Post Divs: BTC 20.05088506

Total Units: 360

NAV/U: BTC 0.05569690

[abramelin582]

When I run a Bitcoin mining profitability calculator on the s9 at my electricity cost with a conservative 6.5% difficulty increase it tells me that it will never earn a roi. It looks as though with the current volume on b.exch, holding b.mine should earn a roi before the fund depletes. Since one share of b.exch cost about the same as buying a comparable h/s from antminer and comes with a built in hedge incase the difficulty skyrockets, it looks to be a better option. I'm not proposing that somehow buying b.exch will make you rich with a risk free investment, I'm just saying it looks like a better option than buying a antminer s9 at their current cost and at a lower cost of entry. I could invest over 3 btc for an antminer that will never earn a roi or I can put up .06 btc and hope for a return from the fund.

This statement means that you do not understand this fund. Purchasing and holding B.EXCH (which is just one MINE and one SELL) will net you zero profit. You need to hold MINE or SELL and sell the one that you don't want. MINE could net you a profit, or SELL could (depending on the difficulty), but holding EXCH never will.

Don't purchase MINE or SELL above the NAV/U and don't purchase and hold EXCH - you will have no profit from this.

I was looking into buying a S9, my calculation told me that it would never earn a profit due to rising difficulty and my electricity cost. i know some one who "mined" before using the b.mine half of this product. Since owning b.mine requires no electricity I was comparing their hash rates per btc and found that it is cheaper to buy hashrate from the purchase of b.exch than it is to buy from antminer(they are almost the same price per hashrate only antminers need electricity). I understand how the fund works and was just pointing out that it is cheaper to buy b.exch and "mine" with the b.mine side than it is to buy an antminer and would probably yield more btc by the time the fund runs out vs when the electricity cost exceeds profits from the S9. However you are right since both will probably result in a loss of overall btc maybe i should buy b.exch and just keep the b.sell side. But now this will require more calculations and thought as to the true value of a b.sell contract. Thanks for taking the time to respond and keep me thinking.

Oh and what happens to the cost of the b.exch after the halving? will it still continue to lose value equal to the last dividend payout of of b.mine per day or will there be a sudden drop in price?

[twentyseventy]

Round 3, Period 10, Day 10 Report - July 1, 2016

Balance Post Divs: BTC 20.16542215

Total Units: 366

NAV/U: BTC 0.05509678

Round 3, Period 10, Day 11 Report - July 2, 2016

Balance Post Divs: BTC 20.16122894

Total Units: 370

NAV/U: BTC 0.05448980

[twentyseventy]

When I run a Bitcoin mining profitability calculator on the s9 at my electricity cost with a conservative 6.5% difficulty increase it tells me that it will never earn a roi. It looks as though with the current volume on b.exch, holding b.mine should earn a roi before the fund depletes. Since one share of b.exch cost about the same as buying a comparable h/s from antminer and comes with a built in hedge incase the difficulty skyrockets, it looks to be a better option. I'm not proposing that somehow buying b.exch will make you rich with a risk free investment, I'm just saying it looks like a better option than buying a antminer s9 at their current cost and at a lower cost of entry. I could invest over 3 btc for an antminer that will never earn a roi or I can put up .06 btc and hope for a return from the fund.

This statement means that you do not understand this fund. Purchasing and holding B.EXCH (which is just one MINE and one SELL) will net you zero profit. You need to hold MINE or SELL and sell the one that you don't want. MINE could net you a profit, or SELL could (depending on the difficulty), but holding EXCH never will.

Don't purchase MINE or SELL above the NAV/U and don't purchase and hold EXCH - you will have no profit from this.

I was looking into buying a S9, my calculation told me that it would never earn a profit due to rising difficulty and my electricity cost. i know some one who "mined" before using the b.mine half of this product. Since owning b.mine requires no electricity I was comparing their hash rates per btc and found that it is cheaper to buy hashrate from the purchase of b.exch than it is to buy from antminer(they are almost the same price per hashrate only antminers need electricity). I understand how the fund works and was just pointing out that it is cheaper to buy b.exch and "mine" with the b.mine side than it is to buy an antminer and would probably yield more btc by the time the fund runs out vs when the electricity cost exceeds profits from the S9. However you are right since both will probably result in a loss of overall btc maybe i should buy b.exch and just keep the b.sell side. But now this will require more calculations and thought as to the true value of a b.sell contract. Thanks for taking the time to respond and keep me thinking.

Oh and what happens to the cost of the b.exch after the halving? will it still continue to lose value equal to the last dividend payout of of b.mine per day or will there be a sudden drop in price?

You're welcome; always happy to answer questions - I know that this is complicated! B.EXCH is listed at NAV/U + 3% so it won't be affected by the halving; the MINE payouts will drop by ~50%, depending on the next difficulty change, but the NAV/U backing those MINE units (and SELL units) will remain the same - same amount of funds backing them, slower payout.

[twentyseventy]

Round 3, Period 10, Day 12 Report - July 3, 2016

Balance Post Divs: BTC 20.10326844

Total Units: 373

NAV/U: BTC 0.05389616

[twentyseventy]

Round 3, Period 10, Day 13 Report - July 4, 2016

Balance Post Divs: BTC 20.25247785

Total Units: 380

NAV/U: BTC 0.05329599

[twentyseventy]

Round 3, Period 10 End Report - July 19, 2016

Previous Units              410
EXCH Sold                   107
Less Buybacks              0
New Total Units        517

Previous Balance          22.00684852
Gross Sales of EXCH      5.37478800

Less Fees                    0.02149915
Less Dividends              2.38904380
Less Buybacks              0
Less Mgmt Fee              0.18245499
Net Balance            24.78863858

End of Period NAV/U     0.04794707

New Difficulty                  213,492,501,108
New Daily Dividend         0.00029458
New Reserve per Unit        0.05302440

NAV/U less New Reserve = 0.04794707 - 0.05302440 = -0.00507733

SELL Dividend                 0 (Because there are less than 180 days of dividends on hand)

Days of Dividends On Hand   162.76

[twentyseventy]

Round 3, Period 11, Day 0 Report - July 5, 2016

Balance Post Divs: BTC 21.60977636

Total Units: 410

NAV/U: BTC 0.05270677

[twentyseventy]

Round 3, Period 11, Day 1 Report - July 6, 2016

Balance Post Divs: BTC 21.47247202

Total Units: 412

NAV/U: BTC 0.05211765

[twentyseventy]

Round 3, Period 11, Day 2 Report - July 7, 2016

Balance Post Divs: BTC 21.33279658

Total Units: 414

NAV/U: BTC 0.05152849

[twentyseventy]

Round 3, Period 11, Day 3 Report - July 8, 2016

Balance Post Divs: BTC 21.13981733

Total Units: 415

NAV/U: BTC 0.05093931

[twentyseventy]

Round 3, Period 11, Day 4 Report - July 9, 2016

Balance Post Divs: BTC 20.89530892

Total Units: 415

NAV/U: BTC 0.05035014

The halving happened after 12PM, so this is the last dividend represented by the 25BTC block!

[twentyseventy]

Round 3, Period 11, Day 5 Report - July 10, 2016

Balance Post Divs: BTC 20.92324789

Total Units: 418

NAV/U: BTC 0.05005561

Could have sworn that I scheduled dividends on Saturday but that doesn't seem to have been the case. So, ironically, a double dividend just went out for 7/10 and 7/11 - with the halving, this will look as if it was a pre-halving dividend. Tomorrow will be the literal start of the post-halving dividends.

[twentyseventy]

Round 3, Period 11, Day 6 Report - July 11, 2016

Balance Post Divs: BTC 20.80009288

Total Units: 418

NAV/U: BTC 0.04976098

[twentyseventy]

Round 3, Period 11, Day 7 Report - July 12, 2016

Balance Post Divs: BTC 20.67695844

Total Units: 418

NAV/U: BTC 0.04946640

[twentyseventy]

Round 3, Period 11, Day 8 Report - July 13, 2016

Balance Post Divs: BTC 20.55382400

Total Units: 418

NAV/U: BTC 0.04917182

[twentyseventy]

Round 3, Period 11, Day 9 Report - July 14, 2016

Balance Post Divs: BTC 20.43068956

Total Units: 418

NAV/U: BTC 0.04887724

[twentyseventy]

Round 3, Period 11, Day 10 Report - July 15, 2016

Balance Post Divs: BTC 22.93142059

Total Units: 472

NAV/U: BTC 0.04858351

[twentyseventy]

Round 3, Period 11, Day 11 Report - July 16, 2016

Balance Post Divs: BTC 22.79201965

Total Units: 472

NAV/U: BTC 0.04828817

[twentyseventy]

Round 3, Period 11, Day 12 Report - July 17, 2016

Balance Post Divs: BTC 22.65297789

Total Units: 472

NAV/U: BTC 0.04799359

Round 3, Period 11, Day 13 Report - July 18, 2016

Balance Post Divs: BTC 22.51393613

Total Units: 472

NAV/U: BTC 0.04769901