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Warning: Moderators do not remove likely scams. You must use your own brain: caveat emptor. Watch out for Ponzi schemes. Do not invest more than you can afford to lose.

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Author Topic: Ultima Fund - BitCoin investment fund  (Read 9282 times)
ultima
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December 23, 2011, 11:48:41 AM
 #21

It is not a ponzi scheme. You can all decide to withdraw all your funds right now (or any time in the future) and you will get all your bitcoins back.
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farfiman
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December 24, 2011, 03:34:37 PM
 #22



Bernard Madoff was running his ponzi scheme for decades, with many happy customers, who withdrew their money... Its just the way ponzi schemes are played.

Since this ponzi scheme is at its beginning..then we 1st users will do OK...the suckers at the end will lose. Wink

But Seriously   ,  "Its a ponzi scheme " is being very much overused on this forum .
Bitcoin as a whole is considered such a scheme by many... but we don't believe that now... Do we?  Wink

"We are just fools. We insanely believe that we can replace one politician with another and something will really change. The ONLY possible way to achieve change is to change the very system of how government functions. Until we are prepared to do that, suck it up for your future belongs to the madness and corruption of politicians."
Martin Armstrong
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January 01, 2012, 06:07:58 PM
 #23



Bernard Madoff was running his ponzi scheme for decades, with many happy customers, who withdrew their money... Its just the way ponzi schemes are played.

Since this ponzi scheme is at its beginning..then we 1st users will do OK...the suckers at the end will lose. Wink

But Seriously   ,  "Its a ponzi scheme " is being very much overused on this forum .
Bitcoin as a whole is considered such a scheme by many... but we don't believe that now... Do we?  Wink

Weasel words. A Ponzi scheme requires someone in control of the fund who knows when to cash out. Many of the early adopters have already sold their shares from when Bitcoin was worth much more last year. Bitcoin holders lack the coordination for a widely distributed Ponzi scheme.

The Ponzi potential is a problem with all opaque investment funds controlled by a single entity.
farfiman
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January 04, 2012, 02:08:05 PM
 #24



Bernard Madoff was running his ponzi scheme for decades, with many happy customers, who withdrew their money... Its just the way ponzi schemes are played.

Since this ponzi scheme is at its beginning..then we 1st users will do OK...the suckers at the end will lose. Wink

But Seriously   ,  "Its a ponzi scheme " is being very much overused on this forum .
Bitcoin as a whole is considered such a scheme by many... but we don't believe that now... Do we?  [wink deleted]

Weasel words. A Ponzi scheme requires someone in control of the fund who knows when to cash out. Many of the early adopters have already sold their shares from when Bitcoin was worth much more last year. Bitcoin holders lack the coordination for a widely distributed Ponzi scheme.

The Ponzi potential is a problem with all opaque investment funds controlled by a single entity.
Maybe I was misunderstood...  I don't believe bitcoin is a ponzi scheme...
shouldn't have put the wink at the end...

"We are just fools. We insanely believe that we can replace one politician with another and something will really change. The ONLY possible way to achieve change is to change the very system of how government functions. Until we are prepared to do that, suck it up for your future belongs to the madness and corruption of politicians."
Martin Armstrong
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January 04, 2012, 04:39:57 PM
 #25

Improve trust? For one, they shouldn't be anonymous.

They cannot afford not to be. What they are doing probably breaks tons of laws, and I don't even need to know where they live to make such claim. You just can't legally open your own startup to compete with financial institutions like this. They must remain anonymous if they want to survive.
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January 05, 2012, 01:22:28 AM
 #26

Improve trust? For one, they shouldn't be anonymous.

They cannot afford not to be. What they are doing probably breaks tons of laws, and I don't even need to know where they live to make such claim. You just can't legally open your own startup to compete with financial institutions like this. They must remain anonymous if they want to survive.

Remaining anonymous is also very handy for if or when the fund manager decides to disappear with everyone's bitcoins, or the market is blamed for the fund's collapse.  This is the reason why funds and managers tend to be registered and regulated. 

Do not send bitcoins to me: 16b8s7pBJ9rUmsExNW25qD5VUqVqRPZuXu
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January 05, 2012, 04:03:19 PM
 #27

If you're setting up a hedge fund then I'll want to know who the hell you are before investing with you.

Secondly, I'm going to want to know your investment strategy. Are you trading BTC FX or exchanging BTC for fiat currency and then buying securities with that money? If so, none of the safeguards concerning hypothecation (MFGlobal snort) apply because the initial 'investment' wasn't in a recognised currency.

What is your benchmark? And in which base currency? Risk targets, measurement methodologies and attribution?

Giving someone BTC so they can exchange into fiat ccy, buy securities, then hopefully exchange back to BTC for a profit, is pure gambling with this amount of information.

For those talking about regulations... well these are *hedge* funds... by their nature they are unregulated. Hence the furore at 'side-pockets' and delayed withdrawals at troubled funds. But the thing is that people invest in a hedge fund *because they know the manager is a hot-shot* and is either a well-known player ex-institutional inv mgr, trader, or advised by their contacts that extraordinary returns can be had by taking the 'hedge fund' risk.

You're going NOWHERE if your idea of a BTC hedge fund involves an anonymous hedge fund manager, haha.


If you want to start a BTC hedge fund... well email me. I've got some ideas whilst I'm sitting here applying for jobs at *real* hedge funds (13 years in the investment mgmt business, I'm no kid with a computer and a loud mouth)

...so I give in to the rhythm, the click click clack
I'm too wasted to fight back...


BTC: 1A7HvdGGDie3P5nDpiskG8JxXT33Yu6Gct
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January 05, 2012, 04:37:02 PM
 #28

Remaining anonymous is also very handy for if or when the fund manager decides to disappear with everyone's bitcoins, or the market is blamed for the fund's collapse. 

I understand this. It doesn't inspire trust. Nobody should invest in it more than what they can lose.

But what other alternative does the fund administrator have? What's he's doing is illegal in the entire world AFAIK, even being perfectly ethical.

This is the reason why funds and managers tend to be registered and regulated. 

Please... the reasons they are regulated are mainly
  • To protect established business from new competitors
  • To allow government to track and tax money

It has nothing to do with protecting costumers.
ultima
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January 05, 2012, 04:41:39 PM
 #29

Currently I am trading BTC/USD and doing bitcoin exchanges arbitrage. I don't have any positions in other currencies at the moment (options, index CFDs mostly).

All investments denominated in other currencies are bought with borrowed money, so the only thing exposed to BTC/USD rate is profit/loss of a position. I never sell bitcoins and use currency to buy something else.

About benchmark... do you have any sugestions what benchmark could a bitcoin trading fund use? I have no idea.
ultima
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January 05, 2012, 04:55:35 PM
 #30

They cannot afford not to be. What they are doing probably breaks tons of laws, and I don't even need to know where they live to make such claim. You just can't legally open your own startup to compete with financial institutions like this. They must remain anonymous if they want to survive.

I would be happy to register a company and everything. But to start a hedge fund I would need more money in my fund than the entire bitcoin economy to cover all legal costs. I would rather continue investing my own money.

Everyone can always go with regulated and safe funds. Give your money to some mutual fund, they will charge you the same fees as I am and simply buy a few stocks and hold them forever. But it will be super mega regulated and safe.

And then some day the company goes broke and they tell you they don't know where your money is. Nothing happens... I know a few people who lost money with MF Global (and before someone starts, I know MFG is not a mutual fund, it is just an example). Why are big companies in favor of more regulation? Because they are the only ones who can afford it, no new players can enter the industry.
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January 05, 2012, 05:09:45 PM
 #31

Some of you (catfish)are taking this to far...

The guy opened a nice small investment fund... nobody expects you to put your life savings into it.
But a few spare coins on the chance he does good,  why not?

No riskier than loaning bitcoins on the loan thread to make a few % a month, or gambling
a few coins here and there.

"We are just fools. We insanely believe that we can replace one politician with another and something will really change. The ONLY possible way to achieve change is to change the very system of how government functions. Until we are prepared to do that, suck it up for your future belongs to the madness and corruption of politicians."
Martin Armstrong
catfish
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January 05, 2012, 06:57:48 PM
 #32

Some of you (catfish)are taking this to far...

The guy opened a nice small investment fund... nobody expects you to put your life savings into it.
But a few spare coins on the chance he does good,  why not?

No riskier than loaning bitcoins on the loan thread to make a few % a month, or gambling
a few coins here and there.

Just thinking towards the future, that's all. Perhaps the market will be large enough for small funds to actually work before legislation gets in the way.

After all, I nearly gave up on my tiny mining boxes late last year with 1 BTC netting around £1.40... the rate is now well over £4 per BTC. Bitcoin hasn't died, that's for sure, so thinking short-term is fine but it's always a good idea to chuck around a few thoughts for the medium-long term.

The benchmark is a problem, since many BTC success scenarios are predicated on collapse of key fiat currencies, and if the primary investment strategies involve securities denominated in these fiat currencies then the models collapse. Exchange arb can only last so long, of course.

The key for me will be whether any securities are issued in bitcoin - at that point things get interesting. Quite how you'd want to issue fixed coupon debt in a deflationary-by-design base ccy though... Smiley


One thing I want to find out is how many *existing* hedge funds are playing around with the BTC market as 'alternative investments' in their portfolios... it's a big risk since the market is small enough to be comprehensively manipulated. Look at the silver market...

...so I give in to the rhythm, the click click clack
I'm too wasted to fight back...


BTC: 1A7HvdGGDie3P5nDpiskG8JxXT33Yu6Gct
ultima
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January 05, 2012, 11:09:52 PM
 #33

I think none. Entire bitcoin economy is a pocket change for hedge funds.

http://en.wikipedia.org/wiki/London_bullion_market#Market_size

The average daily volume of gold and silver cleared at the London Bullion Market Association (LBMA) in November 2008 was 18.3 million ounces (worth $13.9 billion) and 107.6 million ounces (worth $1.1 billion) respectively. This means that an amount equal to the annual gold mine production was cleared at the LBMA every 4.4 days, and to the annual silver production every 6.2 days.

All bitcoins at the moment are worth a little more than $50 million. And only a small amount of bitcoins are traded. So imagine a hedge fund decides to throw in a little change, a few hundred or a million USD. There is no way you can buy that amount without pushing the price to the moon.
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January 06, 2012, 05:26:03 PM
 #34

All bitcoins at the moment are worth a little more than $50 million. And only a small amount of bitcoins are traded. So imagine a hedge fund decides to throw in a little change, a few hundred or a million USD. There is no way you can buy that amount without pushing the price to the moon.
That's what I mean. All it takes is one fund to shove the entire market around. So that first person / fund can dictate the volatility of the BTC market. That's what I mean by 'big risk' - trading the silver market is hard enough (and many traders have quit the CME / COMEX in disgust) but holding BTC for investment takes a large risk that nobody is going to dump a load of BTC and send the price right down.

All that talk of 'early adopters' and the millions of BTC being held - if those early adopters were GS, for example...

Again it's an impediment to a stable BTC economy, because it's safer to *trade* quickly with BTC and not hold, just in case a large sell order collapses the price.

This is the problem with the large granularity at the moment. You don't need *much* money to buy BTC every single day for a month, moving the market slightly, then dumping the lot to move the market down much lower to buy it all back. When it takes *significant* amounts of money to do this, the amount of fee generation in the transactions necessary should stabilise the system, if I understand correctly.

...so I give in to the rhythm, the click click clack
I'm too wasted to fight back...


BTC: 1A7HvdGGDie3P5nDpiskG8JxXT33Yu6Gct
ultima
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January 07, 2012, 12:30:35 PM
 #35

Im happy to hear that. Longer track record is something we are counting on.

Current price volatility is very hard to manage. People think the fund should go up if the price of bitcoin goes up, but the reality is that it is very hard to go long bitcoins with bitcoins. You can do that using Bitcoinica, but it is very risky. You get USD if the price goes up, but the bitcoins are also more expensive, so your profit buys less. If the price goes down you loose USD and your bitcoins used to maintain margin are worth less. The result is if you buy 100 bitcoins with 100 bitcoins deposit and the price goes up 100%, you get only 50% BTC profit. But if the price goes down 50% you loose 100% of your bitcoins. We need bitcoin futures or options in the bitcoin economy.
StewartJ
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January 07, 2012, 07:06:21 PM
 #36

I am researching your fund as a possible investment.

Looking at the fees listed on your web site.

    Deposit fee: 3.00%
    *Profit fee: 10.00%

How did you come up with this as your funding model? Just curious. If I were to make one long term investment, aside from the auto-calculated profit-fee, you would charge me for just the initial 3% deposit, correct?

You state in your FAQ that you trade in publicly traded companies/funds. Any way for shareholders to track your investments? Are these listed in your investor reports?

Why are you not listed on the GLBSE, Global Bitcoin Stock Exchange, like other Bitcoin-based funds?

Your fund model appears to be using a pool of bitcoins as collateral for investment in conventional companies/funds. If investments go negative, you dip into the bitcoin funds to cover losses. When this happens, do you report to the shareholders when and how many bitcoins are used to cover losses? And if so, how do you report this information.

Thanks for taking the time to answer my concerns.

SJ





ultima
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January 09, 2012, 05:44:00 PM
 #37

I looked at various mutual and hedge funds and based my fees on their expenses. Yes if you deposit 100 BTC you get 97 BTC to your account. That is all.

I post my actions on fund's twitter account (also displayed on the ultimafund.com page) and in monthly reports. December report is coming this week.

I looked at GLBSE and decided it is not a good solution. I never wanted to have a closed end fund. You would have to sell your shares to a buyer. If there were no buyers at the time, you could not get your money back. And people would have to use GLBSE to be able to invest in this fund. This is a big problem, to limit yourself to a small group of people that know what GLBSE is. Instead I wanted an easy to invest thing, like mutual fund. You open an account and make a deposit.

I post most of the position changes on fund's twitter account. All other details are included in monthly reports.
StewartJ
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January 09, 2012, 06:36:51 PM
 #38

I looked at various mutual and hedge funds and based my fees on their expenses. Yes if you deposit 100 BTC you get 97 BTC to your account. That is all.

I post my actions on fund's twitter account (also displayed on the ultimafund.com page) and in monthly reports. December report is coming this week.

I looked at GLBSE and decided it is not a good solution. I never wanted to have a closed end fund. You would have to sell your shares to a buyer. If there were no buyers at the time, you could not get your money back. And people would have to use GLBSE to be able to invest in this fund. This is a big problem, to limit yourself to a small group of people that know what GLBSE is. Instead I wanted an easy to invest thing, like mutual fund. You open an account and make a deposit.

I post most of the position changes on fund's twitter account. All other details are included in monthly reports.

Thanks,  I do like the liquidity aspect of your fund.  I have noticed it's almost impossible to sell out of GLBSE shares without incurring a loss.
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January 19, 2012, 05:46:02 PM
 #39

so... where is this thing?

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ultima
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January 20, 2012, 07:29:13 PM
 #40

Do you hold tygrr tech stock?

I will take a look at GLBSE when I have some time, it looks some kind of a geeky-type thing, very comlicated. Could you please send an email to info at ultimafund.com with some financials. I looked at your forum thread, but there are 19 pages of conversation to read Smiley.

so... where is this thing?

We had some server problems yesterday.
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