Winklevoss Bitcoin ETF effect in price

[BTCtrader71]

fractional reserve banking worked well with gold,

True, the Scottish period of free banking demonstrated that. Although how deflationary was gold during that period? I would think of it like this: if the purchasing power of the currency is expected by all parties to rise by X% per year, then the interest rate in *real* terms has a floor of X%. So higher X would result in less demand for lending in that currency, although it would not eliminate it completely. (And of course it's complicated by the fact that different people will have different estimations for X.)

My take is that Bitcoin will end up complementing rather than replacing fiat currencies

I agree. A fiat currency would have to collapse first (and not because of bitcoin) for bitcoin to replace it. It will be very interesting to see if that happens in various troubled countries around the world.

[twiifm]

The thing about the ETF is that it gets more volume, both long and short. And the thing about Bitcoin is that volume = good in the long term, either direction. Also, its a lot of publicity. There will surely be a lot of volume that comes the moment it drops on the market. Basically whats going to happen is:

1) A whole bunch of traders who didn't trade on bitfinex/bitstamp etc... "trust" the etf more, so they trade that instead.
2) A whole bunch of BTC-likers will buy the BTC in their IRAs, etc...
3) A whole bunch of BTC-haters will short the BTC.

Probably, the amount of money longing from (2) is going to be greater than the amount of money shorting from (3) because the people in (2) tend to be more risk-on than those in (3) so they will put more money on it.

But its also true that some traders, the most risk-on group of all, might decide to short. Also, its also true that group (2) has had places like bitfinex & bitstamp the whole time, while group (3) was very unlikely to use these services. So the amount of shorts might actually become pretty large.

Either way, it doesn't really matter. No matter, the volume is going to be really high, and that's the main bullish indicator in the long term. If its short interest causing it, then the price will crash for 2 years, while BTC-likers accumulate and shorters pay interest, eventually causing price increase.

If its longs causing it, then the price will bubble immediately, just causing a repeat of 2013 all over again. Bubble-burst bubble-burst each bubble being higher.

The bad situation would be if the ETF was canceled or if it needed to be pulled due to some kind of scandal or concerns over what someone somewhere can label "insider trading."

The less bad situation would be if the ETF didn't take off in popularity/volume, kind of flopped, but continues trading nonetheless.

I would love to short bitcoin on a legit exchange through a legit broker.  I can do it w options with defined risk.   Don't need to borrow

If some famous short hedge fund guy like Einhorn get shorting bitcoin the price will  crash til another famous hedge fund guy buys the bottom.

So far few big investment banks are pro bitcoin so I don't see any big funds getting into it.  It be smaller hedge funds.   Which would do their typical pump and pump

[aminorex]

You cannot short what you cannot borrow.

What would you charge to loan out your bitcoin, in USD terms?  I would very much worry about getting it all back.

There is a hefty premium to pay for the right to get stuck short in a squeeze.

I've heard of the greater fool theory, but this would require the mother of all fools.  MoAF.

I can do it w options with defined risk.

Premium is going to be a bitch.

[twiifm]

You cannot short what you cannot borrow.

What would you charge to loan out your bitcoin, in USD terms?  I would very much worry about getting it all back.

There is a hefty premium to pay for the right to get stuck short in a squeeze.

I've heard of the greater fool theory, but this would require the mother of all fools.  MoAF.

I can do it w options with defined risk.

Premium is going to be a bitch.

You can sell calls when IV is high.     Or buy put verticals.   Or sell call verticals.

Its only foolish if you don't know how to do it.   I take bearish positions all the time.   The only hard part is the timing.   But usually price crash harder than it goes up.   Escalator up elevator down type thing

There are some traders who mostly short or take bearish positions.   I think they're licking their chops to short bitcoin.  Its got all the ingredients

[Raystonn]

I take bearish positions all the time.   The only hard part is the timing.

LOL.  And the only hard part about winning the lottery is picking the right numbers!

[TheJuice]

I think an ETF is going to have a short term bump, but then stabilize the btc price long term. Maybe a quick double the few months after it's released then stagnant for a year.

[damnek]

You cannot short what you cannot borrow.

What would you charge to loan out your bitcoin, in USD terms?  I would very much worry about getting it all back.

There is a hefty premium to pay for the right to get stuck short in a squeeze.

I've heard of the greater fool theory, but this would require the mother of all fools.  MoAF.

I can do it w options with defined risk.

Premium is going to be a bitch.

You can sell calls when IV is high.     Or buy put verticals.   Or sell call verticals.

Its only foolish if you don't know how to do it.   I take bearish positions all the time.   The only hard part is the timing.   But usually price crash harder than it goes up.   Escalator up elevator down type thing

There are some traders who mostly short or take bearish positions.   I think they're licking their chops to short bitcoin.  Its got all the ingredients

There's always somebody on the other side of your trade

[twiifm]

You cannot short what you cannot borrow.

What would you charge to loan out your bitcoin, in USD terms?  I would very much worry about getting it all back.

There is a hefty premium to pay for the right to get stuck short in a squeeze.

I've heard of the greater fool theory, but this would require the mother of all fools.  MoAF.

I can do it w options with defined risk.

Premium is going to be a bitch.

You can sell calls when IV is high.     Or buy put verticals.   Or sell call verticals.

Its only foolish if you don't know how to do it.   I take bearish positions all the time.   The only hard part is the timing.   But usually price crash harder than it goes up.   Escalator up elevator down type thing

There are some traders who mostly short or take bearish positions.   I think they're licking their chops to short bitcoin.  Its got all the ingredients

There's always somebody on the other side of your trade

Yup thats true.  I think what will happen is that it'll get pumped for 1-3 months while hedge funds build their short positions.  Then they use media to scare off retail and dump the price causing a crash.  It happens all time when there is a cult stock w irrational exuberance

[damnek]

You cannot short what you cannot borrow.

What would you charge to loan out your bitcoin, in USD terms?  I would very much worry about getting it all back.

There is a hefty premium to pay for the right to get stuck short in a squeeze.

I've heard of the greater fool theory, but this would require the mother of all fools.  MoAF.

I can do it w options with defined risk.

Premium is going to be a bitch.

You can sell calls when IV is high.     Or buy put verticals.   Or sell call verticals.

Its only foolish if you don't know how to do it.   I take bearish positions all the time.   The only hard part is the timing.   But usually price crash harder than it goes up.   Escalator up elevator down type thing

There are some traders who mostly short or take bearish positions.   I think they're licking their chops to short bitcoin.  Its got all the ingredients

There's always somebody on the other side of your trade

Yup thats true.  I think what will happen is that it'll get pumped for 1-3 months while hedge funds build their short positions.  Then they use media to scare off retail and dump the price causing a crash.  It happens all time when there is a cult stock w irrational exuberance

Good luck with that. Let me remind you of NFLX lately, which has been a major headache for some shorters. Don't think you know something..

[twiifm]

NLFX got dumped after that GS upgrade.  Its dropping now

[CryptInvest]

Once the fund is registered, and the price will start functioning. Reasons - the arrival of large investors WallStreet

[keithers]

I'm pretty sure it's going to have a positive effect on the bitcoin ecosystem.

think so too but dont expect that the price will be like a skyrocket because of one etf. maybe we see the 1500 - 2000 USD after some moths. that would be nice.

but silberts etf is also on the way and more will follow...what should cause a price rise 

Think many people are expecting 4k-5k after etf is out.

There is no chance that one ETF is going to push the price to 4-5k...

[inca]

I'm pretty sure it's going to have a positive effect on the bitcoin ecosystem.

think so too but dont expect that the price will be like a skyrocket because of one etf. maybe we see the 1500 - 2000 USD after some moths. that would be nice.

but silberts etf is also on the way and more will follow...what should cause a price rise 

Think many people are expecting 4k-5k after etf is out.

There is no chance that one ETF is going to push the price to 4-5k...

Every post like that means it is more likely!

[Erdogan]

I'm pretty sure it's going to have a positive effect on the bitcoin ecosystem.

think so too but dont expect that the price will be like a skyrocket because of one etf. maybe we see the 1500 - 2000 USD after some moths. that would be nice.

but silberts etf is also on the way and more will follow...what should cause a price rise 

Think many people are expecting 4k-5k after etf is out.

There is no chance that one ETF is going to push the price to 4-5k...

Every post like that means it is more likely!

And when we are at 4-5k, the ETF in action, we can not say if there is causation.

[harposox]

I don't know jack about traditional Wall Street mumbo jumbo, but I read today that the Winky ETF is modeled after the GLD fund – which set records by attracting over a $billion in new investment in just 3 days. Obviously that's a pretty lazy comparison, but consider this: Bitcoin represents an entirely new asset class. Lots of institutions and investors will want to get in on this on the ground floor, whether they support or even understand virtual currencies at all. Once the general public sees how much easy money can be made, money will start pouring in. IMO the ETF is the next big step for bitcoin and it will likely be the spark for the next bubble...

[windjc]

I don't know jack about traditional Wall Street mumbo jumbo, but I read today that the Winky ETF is modeled after the GLD fund – which set records by attracting over a $billion in new investment in just 3 days. Obviously that's a pretty lazy comparison, but consider this: Bitcoin represents an entirely new asset class. Lots of institutions and investors will want to get in on this on the ground floor, whether they support or even understand virtual currencies at all. Once the general public sees how much easy money can be made, money will start pouring in. IMO the ETF is the next big step for bitcoin and it will likely be the spark for the next bubble...

If $1 billion came in the first 3 days of the COIN, how many bitcoins would have to be purchased on the market?

[BitchicksHusband]

I don't know jack about traditional Wall Street mumbo jumbo, but I read today that the Winky ETF is modeled after the GLD fund – which set records by attracting over a $billion in new investment in just 3 days. Obviously that's a pretty lazy comparison, but consider this: Bitcoin represents an entirely new asset class. Lots of institutions and investors will want to get in on this on the ground floor, whether they support or even understand virtual currencies at all. Once the general public sees how much easy money can be made, money will start pouring in. IMO the ETF is the next big step for bitcoin and it will likely be the spark for the next bubble...

If $1 billion came in the first 3 days of the COIN, how many bitcoins would have to be purchased on the market?

At $650 each, let's say for simplicity they could cover the first $65,000,000 with their 100,000 bitcoins.  After that, they would need to cover the remaining $935,000,000 with whatever is available for sale on the markets.  And people think I'm ridiculous for saying that this is the vertical.

[vuduchyld]

I don't know jack about traditional Wall Street mumbo jumbo, but I read today that the Winky ETF is modeled after the GLD fund – which set records by attracting over a $billion in new investment in just 3 days. Obviously that's a pretty lazy comparison, but consider this: Bitcoin represents an entirely new asset class. Lots of institutions and investors will want to get in on this on the ground floor, whether they support or even understand virtual currencies at all. Once the general public sees how much easy money can be made, money will start pouring in. IMO the ETF is the next big step for bitcoin and it will likely be the spark for the next bubble...

If $1 billion came in the first 3 days of the COIN, how many bitcoins would have to be purchased on the market?

I could be wrong, but I remember reading that there was something like a 1:5 leverage ratio, so divided by $620 (price today) and divided by 5, it's about 307,000 coins.

Another way to look at it would just be to take $1 billion divided by the 12,000,000 mined coins and that comes to about $83 per coin.  

Or that the current market capitalization would be about $8 billion, so you're adding 12.5%.  It probably ain't the moon.  And that's not even considering whether or not a bitcoin ETF would be as attractive as gold, which it might well not be.

I'd welcome it, but I don't think it's going to pay for my daughter's college or anything.

[harposox]

I don't know jack about traditional Wall Street mumbo jumbo, but I read today that the Winky ETF is modeled after the GLD fund – which set records by attracting over a $billion in new investment in just 3 days. Obviously that's a pretty lazy comparison, but consider this: Bitcoin represents an entirely new asset class. Lots of institutions and investors will want to get in on this on the ground floor, whether they support or even understand virtual currencies at all. Once the general public sees how much easy money can be made, money will start pouring in. IMO the ETF is the next big step for bitcoin and it will likely be the spark for the next bubble...

If $1 billion came in the first 3 days of the COIN, how many bitcoins would have to be purchased on the market?

I could be wrong, but I remember reading that there was something like a 1:5 leverage ratio, so divided by $620 (price today) and divided by 5, it's about 307,000 coins.

Another way to look at it would just be to take $1 billion divided by the 12,000,000 mined coins and that comes to about $83 per coin.  

Or that the current market capitalization would be about $8 billion, so you're adding 12.5%.  It probably ain't the moon.  And that's not even considering whether or not a bitcoin ETF would be as attractive as gold, which it might well not be.

I'd welcome it, but I don't think it's going to pay for my daughter's college or anything.

Hmmm, very interesting. While your analysis certainly makes sense fundamentally... never underestimate speculative mania.

[windjc]

I don't know jack about traditional Wall Street mumbo jumbo, but I read today that the Winky ETF is modeled after the GLD fund – which set records by attracting over a $billion in new investment in just 3 days. Obviously that's a pretty lazy comparison, but consider this: Bitcoin represents an entirely new asset class. Lots of institutions and investors will want to get in on this on the ground floor, whether they support or even understand virtual currencies at all. Once the general public sees how much easy money can be made, money will start pouring in. IMO the ETF is the next big step for bitcoin and it will likely be the spark for the next bubble...

If $1 billion came in the first 3 days of the COIN, how many bitcoins would have to be purchased on the market?

I could be wrong, but I remember reading that there was something like a 1:5 leverage ratio, so divided by $620 (price today) and divided by 5, it's about 307,000 coins.

Another way to look at it would just be to take $1 billion divided by the 12,000,000 mined coins and that comes to about $83 per coin.  

Or that the current market capitalization would be about $8 billion, so you're adding 12.5%.  It probably ain't the moon.  And that's not even considering whether or not a bitcoin ETF would be as attractive as gold, which it might well not be.

I'd welcome it, but I don't think it's going to pay for my daughter's college or anything.

Well, its not a 5 to 1 leverage ratio. 5 shares = 1 Bitcoin.

So lets redo that math, shall we??

The fund already has 100,000 btc. So if 1 billion came in, the first 100k btc (@ $620) would equal $62 million.

So that would leave an additional $938 MILLION worth of bitcoins that would need to be purchased.

You still think that would not effect the price in a substantial way?

PS. You realize that $1 billion in INVESTMENT capital is a completely different beast than 1/8 increase in market capitalization. Right?