Winklevoss Bitcoin Trust {COIN} on Nasdaq OMX [Video]

[ThePanCakeKid95]

Hey guys it's Jason and in this video I'm talking about the recent news of the winklevoss bitcoin trust and their plans for being added on the Nasdaq OMX with an IPO. Go check it out
Video Link: http://youtu.be/KvUrEVu4vB4

[LiteCoinGuy]

you changed the background    ! WHY   ?

[franky1]

to add onto the video

a basket is 50,000 shares
a basket is also 10,000btc

meaning 5 shares=1btc

each Share in the initial Baskets was comprised of [0.20] bitcoins.

https://www.sec.gov/Archives/edgar/data/1579346/000119312514190365/d721187ds1a.htm

meaning initial full bitcoin price of winkles own stash is $104.50 per BTC

and yes these 200k bitcoins (1mill shares) are winkles own 200k stash of coins
so if your lucky enough to get the winkle stash.. your gonna do great later when the price settles.

i initially thought that this 1mill shares would be it, the limit. but i was corrected recently (by deathandtaxes) that once winkles own stash is bought up then private companies can add baskets of their own stash to the trust which, if bitcoin is obtained from exchanges and other sources) take out bitcoin for normal circulation and due to it being 10k lumps, would cause a large bitcoin price rise.

[InwardContour]

I would argue that this is a very big step in the right direction to get bitcoin to start trading as an ETF. I would say that ETF trading would likely push up the price over the long term.

It should also be noted that second market recently announced an open ended mutual fund that will invest in bitcoin

[fenican]

In concept, great.  In practice, a disaster.  What happens when someone hacks the Winklevoss and steals all the BTC?  Are they going to guarantee the principal?

The fact transactions can't be reverses make any BTC investment pool, where a large group of investors share a common wallet, EXTREMELY risky.  See Gox.

[Mikez]

The fact transactions can't be reverses make any BTC investment pool, where a large group of investors share a common wallet, EXTREMELY risky.  See Gox.

The Bitcoin protocol already allows multisig transactions. Why not take advantage of that?
On another note... I'd like to get my hands on a couple of them shares when they come out .

[franky1]

In concept, great.  In practice, a disaster.  What happens when someone hacks the Winklevoss and steals all the BTC?  Are they going to guarantee the principal?

The fact transactions can't be reverses make any BTC investment pool, where a large group of investors share a common wallet, EXTREMELY risky.  See Gox.

1) winklevoss are going to be licenced.. this means liability insurance. = good for people
2) the baskets are 100% cold stored. hackers wont get any coins. privkeys are locked in secured and insured storage boxes physically away from the internet. only public keys will be shown on the internet.
3) the only time a privkey is touched is if a whale wants to buy a whole basket (cash out) from winklevoss trust. otherwise (see 4)
4) the only thing that is internet based is the shares. and the security will be proper banking/military grade, not basement dwelling PHP grade
5) if you think that winklevoss will be hacked then expect apple and nasdaq to be hacked... same thing

[InwardContour]

In concept, great.  In practice, a disaster.  What happens when someone hacks the Winklevoss and steals all the BTC?  Are they going to guarantee the principal?

The fact transactions can't be reverses make any BTC investment pool, where a large group of investors share a common wallet, EXTREMELY risky.  See Gox.

1) winklevoss are going to be licenced.. this means liability insurance. = good for people
2) the baskets are 100% cold stored. hackers wont get any coins. privkeys are locked in secured and insured storage boxes physically away from the internet. only public keys will be shown on the internet.
3) the only time a privkey is touched is if a whale wants to buy a whole basket (cash out) from winklevoss trust. otherwise (see 4)
4) the only thing that is internet based is the shares. and the security will be proper banking/military grade, not basement dwelling PHP grade
5) if you think that winklevoss will be hacked then expect apple and nasdaq to be hacked... same thing

Eventually people will want to move in and out of the ETF via exchanging bitcoin for shares which will eventually force the ETF to maintain somewhat of a hot wallet.

[ThePanCakeKid95]

you changed the background    ! WHY   ?

Yes I did lol, I moved it to the room with my miners what's your take on my new set? Better or worse?

[ThePanCakeKid95]

I also love the discussion we are having. It is interesting to hear that other investors can add baskets

[franky1]

Eventually people will want to move in and out of the ETF via exchanging bitcoin for shares which will eventually force the ETF to maintain somewhat of a hot wallet.

you cant pay bitcoins to the nasdaq! only fiat

the purpose of the EFT is to buy shares that represent 0.2btc. this is for FIAT investors to get some expereince of the bitcoin price volatility with their FIAT.

the only bitcoins entering the ETF are in basket amounts by firms that want to be fund managers annd offer shares to their clients. that are deposited to QR codes of a public key. the private key is cold stored in safety deposit boxes. there will never be a hot wallet.

by bing in the ETF trust the bitcoins are locked in and covered by the ETF's liability insurance

if the certified traders(fund managers) want to get back their bitcoins, it would be done via proper contractual communications. and the withdrawal limit is in baskets (10,000btc) in no way can someone just take out 1or 2 bitcoins. as that spoils a whole basket. again only baskets of bitcoins can be added or removed to and from the ETF.

so do not expect hotwallets and small bitcoin amounts going in and out. it all would be done behind the scenes with proper contracts and communications to legitimise the transactions.

this is not going to be a php basement dweller exchange website... we are talking NASDAQ!

and by the way swapping a real bitcoin for a share is stupid, as the share price would be slightly lower then the actual bitcoin (ETF commisions and insurance costs would dilute the price slightly meaning a $600 bitcoin would have probably a $110 share price($550/equivalence to a btc). and when cashing out you may get less then $550 after fee's, so stick with real bitcoins if you have them. and use FIAT to buy shares, atleast they will be insured if ETF gos bankrupt)

[LiteCoinGuy]

i go with franky1  


but:

i would not say that hacking and losing some btc is impossible here:

http://www.marketwatch.com/story/nasdaq-others-hacked-in-multimillion-dollar-fraud-2013-07-25

http://www.forbes.com/sites/christophersteiner/2012/08/30/how-the-nasdaq-got-hacked/


@ThePanCakeKid95

background is fine 

[franky1]

agreed, never said impossible to hack, but requires higher level of skill then the current script kiddies running brute force scripts on a php/sql login..

by that i mean hacking the ETF. again no hotwallet means no coins disappearing. the most they can do is edit the names and addresses of share holders and move shares to their own share accounts...

bitcoins are not traded with clients on the ETF LIVE platform. the bitcoins are separate (buying and selling baskets) are done behind the scenes, not live traded... again SHARES and fiat are the live trade platform.. not bitcoins..

the baskets of bitcoins are 100% cold stored.. hope that clarifies things

the ETF will not be low security like some of these exchanges. and as i said the funds will be insured.

[waxwing]

franky, s/EFT/ETF/g , please

Exchange Traded Fund
Electronic Funds Transfer

[Este Nuno]

This could be huge for bitcoin. I wonder how much of this is already priced into the market at this point. Maybe it's not really priced in yet since it's not clear how popular this will be.

Either way, to me this is one of the most exciting things to happen to BTC in a very long time.

[yayayo]

This could be huge for bitcoin. I wonder how much of this is already priced into the market at this point. Maybe it's not really priced in yet since it's not clear how popular this will be.

Either way, to me this is one of the most exciting things to happen to BTC in a very long time.

I think it's not priced in, because it will generate new inflow of capital. Significant amounts...

Although I'm not that excited, because it seems to be a little bit backwards-oriented: Investing in a new monetary concept using an investment vehicle that is effectively invalidated by the new monetary concept.

When will it launch?

ya.ya.yo!

[Este Nuno]

This could be huge for bitcoin. I wonder how much of this is already priced into the market at this point. Maybe it's not really priced in yet since it's not clear how popular this will be.

Either way, to me this is one of the most exciting things to happen to BTC in a very long time.

I think it's not priced in, because it will generate new inflow of capital. Significant amounts...

Although I'm not that excited, because it seems to be a little bit backwards-oriented: Investing in a new monetary concept using an investment vehicle that is effectively invalidated by the new monetary concept.

When will it launch?

ya.ya.yo!

Yeah, in a way it does defeat the overall purpose of bitcoin. But a lot of people and groups can not invest in bitcoin and have to invest in securities. So this is just the market figuring out a way to offer them a chance at the value that bitcoin provides.

It almost sounds too good to be true. Maybe I'm overestimating the potential.

[Velkro]

meaning initial full bitcoin price of winkles own stash is $104.50 per BTC

are you sure about that? i mean why would they sell their BTC's so cheap compared to current price

[franky1]

meaning initial full bitcoin price of winkles own stash is $104.50 per BTC

are you sure about that? i mean why would they sell their BTC's so cheap compared to current price

$20.90 per share, 5 shares 'represent' 1btc

thats why

or havnt you read this:
https://www.sec.gov/Archives/edgar/data/1579346/000119312514190365/d721187ds1a.htm

or watched this
http://youtu.be/KvUrEVu4vB4

they're not selling their actual BTC for $104.50, they're selling 5 shares which represent one of their bitcoin..

the bitcoin still remains within the trust. but after the initial share sell off of cheap shares. the winkles are going to make alot of money through their trading commisions and service costs.

imagine if you could sell your own 1bitcoin to 500+ people in a year without it ever leaving your private key that you hold.. selling the shares representing bitcoins gets them nice commission/spot fee's.. even if 1%, 500 buys and sells in a year is 500%

and thanks for the keen eye waxwing

franky, s/EFT/ETF/g , please

Exchange Traded Fund
Electronic Funds Transfer

edited to be correct now. and excuse the pun but when it comes to the winklevi, im always getting the names mixed up

[ArticMine]

(1)   Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(d) under the Securities Act of 1933. Each Share comprising the initial Baskets of Shares represents 0.20 bitcoins and is offered at a per Share price equal to the price equal to the number of bitcoins comprising such Share. The price of bitcoins is based on a weighted average of the average of the high and low transaction prices of bitcoins on June 27, 2013 on three major Bitcoin Exchange sites: Mt. Gox, BitStamp and BTC-e. On June 27, 2013, this price was $100.45/bitcoin.

Bold my emphasis. https://www.sec.gov/Archives/edgar/data/1579346/000119312514190365/d721187ds1a.htm

I would suggest the maker of this video first read the fine print before embarrassing himself on YouTube. The 20.09 USD price has nothing to do with the price the units of this trust will be offered to the public.