[2014-7-10] Bloomberg-Bitcoin by Bitcoin-Winklevoss ETF inches closer to reality

[CoinMode]

http://www.bloomberg.com/news/2014-07-10/bitcoin-by-bitcoin-the-winklevii-etf-inches-closer-to-reality.html

"It looks increasingly that the Winklevoss Bitcoin Trust (COIN) will actually launch.

If it hits the market later this year, it will come a decade after the inception of the world's largest gold fund, SPDR Gold Shares (GLD). COIN was modeled on GLD and in some ways is trying to be a new generation's version of gold. The cyptocurrency would move closer to the mainstream in an exchange-traded fund wrapper.

There's still no guarantee COIN will be approved by the Securities and Exchange Commission. There are more than a thousand prospectuses for ETFs sitting with the SEC, and hundreds of reserved tickers sitting with stock exchanges. And this approval would be the first of its kind -- a virtual asset."

[SirWilliam]

Hell yeah, now THAT is what I call reporting. This guy is a real expert using his specialized knowledge to analyze the latest filing. The story is fun and interesting and takes a very positive view of the ETF's chance of launching. Awesome coverage from Eric Balchunas at Bloomberg.

[Bitcopia]

"GLD holds the ETF record for reaching $1 billion in assets the fastest. It did that in three days flat. "

Can you imagine if this ETF launched with anywhere near that kind of investment? It would likely be the biggest contributing factor to the next level of magnitude in price. If you're not holding by the end of summer, you're likely to get left panic buying.

[Ron~Popeil]

The exchanges will be nuts the day that is approved. Anyone know the expected time line? A few days before would be a good time to buy.

[bitbouillion]

The exchanges will be nuts the day that is approved.

Why? You can't buy bitcoins on the stock exchange, only shares of a fund which invests in bitcoin. To buy bitcoins yourself you still need an exchange.

Edit: Also the fund needs to buy the bitcoins they invest into somewhere.

[faince222]

This is the benefit of having people with connections pushing there way through supporting a project, Looks like BTC might actually be added there. I guess this is the kind of news that pushes the price up.

[Chef Ramsay]

This is the benefit of having people with connections pushing there way through supporting a project, Looks like BTC might actually be added there. I guess this is the kind of news that pushes the price up.

My guess is that lawyer firm we heard about recently has plenty of pull w/ the higher ups on Wall street and the SEC. This ETF, or one of the many being proffered, will inevitably do magic for the pricing side and it seems like it's being timed to pop off to much fanfare. Imagine when those of the interested parties in the bigger money category get on board and then the price starts doing its thing, it'll be interesting to see how the masses deal w/ it.

[mercistheman]

My only response is... buy now while you can still afford it.

[seriouscoin]

My only response is... buy now while you can still afford it.

You meant ... CCMF ?

[BitChick]

My only response is... buy now while you can still afford it.

Right!?  I would love to see someone punch a few numbers and give us an estimate of what could happen if Bitcoin opens up close to what the GLD ETF did. 

Is $50,000 per coin out of the question?  Sure, the Winklevoss twins have a nice stash of coins for the fund but what if they run out?  They will have to get more somewhere right?  Will they buy on the exchanges?

Also, just the news of the ETF opening will send the price skyrocketing to begin with I believe.

It will get crazy fast!

[LiteCoinGuy]

"GLD holds the ETF record for reaching $1 billion in assets the fastest. It did that in three days flat. "

Can you imagine if this ETF launched with anywhere near that kind of investment? It would likely be the biggest contributing factor to the next level of magnitude in price. If you're not holding by the end of summer, you're likely to get left panic buying.

you should hold a little bit longer than that in my opinion  

this will not the the only ETF in the future.

[Bitcopia]

"GLD holds the ETF record for reaching $1 billion in assets the fastest. It did that in three days flat. "

Can you imagine if this ETF launched with anywhere near that kind of investment? It would likely be the biggest contributing factor to the next level of magnitude in price. If you're not holding by the end of summer, you're likely to get left panic buying.

you should hold a little bit longer than that in my opinion  

this will not the the only ETF in the future.

What I meant is that this is risky time to be waiting for cheaper coins.

[PolarPoint]

I have reservations about this ETF. Will it track or swing the price of bitcoin? Can large investors use this ETF to influence the exchange prices? I know they are two distinct exchanges, but buyers and sellers on the exchange are going to see the ETF price as an indicator, am I correct to assume that?

[Bit_Happy]

I have reservations about this ETF. Will it track or swing the price of bitcoin? Can large investors use this ETF to influence the exchange prices? I know they are two distinct exchanges, but buyers and sellers on the exchange are going to see the ETF price as an indicator, am I correct to assume that?

Yes it will have an effect, and that could cause BTC to go amazingly high. Finally, BIG money will have a chance to buy BTC without having to send funds to unregulated exchanges.

[cr1776]

The exchanges will be nuts the day that is approved.

Why? You can't buy bitcoins on the stock exchange, only shares of a fund which invests in bitcoin. To buy bitcoins yourself you still need an exchange.

Edit: Also the fund needs to buy the bitcoins they invest into somewhere.

I believe he was speaking of the bitcoin exchanges going nuts when/if it is approved.

[Ron~Popeil]

The exchanges will be nuts the day that is approved.

Why? You can't buy bitcoins on the stock exchange, only shares of a fund which invests in bitcoin. To buy bitcoins yourself you still need an exchange.

Edit: Also the fund needs to buy the bitcoins they invest into somewhere.

I believe he was speaking of the bitcoin exchanges going nuts when/if it is approved.

It should start to ramp up in the weeks and days leading up to the launch. People will be panicking to get in before the price goes way up. I expect a sharp rise as soon as the sec announces the approval.

[bitbouillion]

Will it track or swing the price of bitcoin?

The details will be outlined in the prospectus.

Can large investors use this ETF to influence the exchange prices?

If the fund inflows or outflows are big enough, they will influence the overall demand and supply of Bitcoin.

I know they are two distinct exchanges, but buyers and sellers on the exchange are going to see the ETF price as an indicator, am I correct to assume that?

Sure, the ETF price will have impact on the mass psychology, but keep in mind this ETF is only a derivative on Bitcoins. There is an important difference between owning ETF shares and private keys for Bitcoins. When things get uneasy on Wall St again, the price spread between Bitcoin exchanges and the ETF will probably increase.

[kjlimo]

I know they are two distinct exchanges, but buyers and sellers on the exchange are going to see the ETF price as an indicator, am I correct to assume that?

Sure, the ETF price will have impact on the mass psychology, but keep in mind this ETF is only a derivative on Bitcoins. There is an important difference between owning ETF shares and private keys for Bitcoins. When things get uneasy on Wall St again, the price spread between Bitcoin exchanges and the ETF will probably increase.

Not in my opinion the ETF is being sold as 1 Million shares of 200k BTC, thus 1 share is 0.2BTC, only thing different than holding the private keys imo is that someone is holding them for you with insurance in case they get stolen from Winkdek and for that someone pays fees to own it.  When things get uneasy on Wall St again, the price spread should not increase unless its the ETF side going higher, and this gives people more places to run to.

Good to be diversified IMO...

[bitbouillion]

Not in my opinion the ETF is being sold as 1 Million shares of 200k BTC, thus 1 share is 0.2BTC, only thing different than holding the private keys imo is that someone is holding them for you with insurance in case they get stolen from Winkdek and for that someone pays fees to own it.

OK, derivative is the wrong term, but from the view of the investor it's only an IOU.

When things get uneasy on Wall St again, the price spread should not increase unless its the ETF side going higher, and this gives people more places to run to.

WTSHTF the real asset is always preferred over an IOU, because it is much more likely that the IOUs become worthless than the underlying assets become worthless. There are many third party risks of the IOU, some of them:
- stock exchange can be closed
- your funds can get lost (think of MF Global)
- your funds can be frozen
- government can confiscate funds (think of Cyprus)
- insurance can go bankrupt as well

As long as the music plays there is no difference, but better be prepared. 

[ThomasCrowne]

Looks like the Winklevoss twins will be going from just filthy rich to ridiculously filthy rich here over the next couple of years once this goes through.