Winklevoss COIN -- Will it even matter? And how much?

[Newbie1022]

This is seriously something I wonder.

Will it lead to an explosion of interest? Or are they simply too late to the party?

Will it have the effect of setting a price higher than the centralized exchanges (given the added value tied to the feeling of security found in trading through an ETF)? Or will it siphon up some of the buy volume from the exchanges as people invest in the Winklevis coins rather than buying new coins (i.e. is it, in effect, a giant dump of coins?)

Has it been a precipitating factor in the lack of demand, recently? Are people holding out to invest in BTC via the ETF so they are abstaining from playing in the market?

In essence, as a thought experiment, say they announce the ETF, tomorrow -- what do you think the price effect will be (not only direction, but amount and duration).

1-2-3... speculate folks. I'm interested in your views.

[1714855075]

1714855075

[inca]

Currently the investing public cannot invest in bitcoin in a tax efficient 'one-click' fashion. An etf would open up the volalitilty of bitcoin to the investing world, a multi-trillion dollar capital pool.

Lots of this forum is strangely expecting bitcoin to fall to prices before the last two bubbles in spite of massive capital injections into infrastructure, mining and startups and merchant integration noone would have believed if mentioned this time last year. In the last year wallet numbers have risen, as have transaction statistics in line with a growing adoption base. This despite a price which has lost ~70% from the previous all time high and pretty much gone down the whole year.

The ETF will hold 100,000 to 200,000 coins currently valued (bought in one go) at 33million - 66million dollars. Some view the ETF as a sell out for the twins and possibly it is. But it isn't a stretch to imagine capital flowing in to capitalise on cheap bitcoin in search of upward speculative volatility witnessed last year in 2015.

Controlling the ETF also allows the twins to move the price to a degree. If demand is high they can choose to purchase coins on exchange and import them into the ETF rather than simply transferring ownership of their existing coins. It will also add market depth which can only be a good thing for bitcoin.

My guess is something like this: we amble around for a few more weeks / months until the market is happy a bottom is in and we start building a base upwards from there. Suddenly the price moves up 20-30% to a technically significant level, the previous ATH is potentially within reach. Next the ETF is approved and a modest amount of capital moves into the ETF, the twins further capitalise the ETF with newly bought coins and the price is driven up to the ATH. In a positive feedback loop this brings more and more capital into the ETF which allows the twins to gradually sign over a significant % of their coins in return for fiat whilst also pushing up the price into the next hype cycle. This time the cycle is driven by joe public investor, front run by big money, and bitcoin becomes a gold like commodity asset for the first time. Actual gold investment withers to an all time low.

Noone on here knows the future. But a lot of money has been spent speculatively fleshing out the bitcoin ecosystem in the last year. If just 10% of that money starts buying up the actual currency and the public can get in, we could be in for a super bubble of epic proportions. I view the ETF as the biggest on ramp bitcoin will ever see.

[Newbie1022]

Currently the investing public cannot invest in bitcoin in a tax efficient 'one-click' fashion. An etf would open up the volalitilty of bitcoin to the investing world, a multi-trillion dollar capital pool.

Lots of this forum is strangely expecting bitcoin to fall to prices before the last two bubbles in spite of massive capital injections into infrastructure, mining and startups and merchant integration noone would have believed if mentioned this time last year. In the last year wallet numbers have risen, as have transaction statistics in line with a growing adoption base. This despite a price which has lost ~70% from the previous all time high and pretty much gone down the whole year.

The ETF will hold 100,000 to 200,000 coins currently valued (bought in one go) at 33million - 66million dollars. Some view the ETF as a sell out for the twins and possibly it is. But it isn't a stretch to imagine capital flowing in to capitalise on cheap bitcoin in search of upward speculative volatility witnessed last year in 2015.

Controlling the ETF also allows the twins to move the price to a degree. If demand is high they can choose to purchase coins on exchange and import them into the ETF rather than simply transferring ownership of their existing coins. It will also add market depth which can only be a good thing for bitcoin.

My guess is something like this: we amble around for a few more weeks / months until the market is happy a bottom is in and we start building a base upwards from there. Suddenly the price moves up 20-30% to a technically significant level, the previous ATH is potentially within reach. Next the ETF is approved and a modest amount of capital moves into the ETF, the twins further capitalise the ETF with newly bought coins and the price is driven up to the ATH. In a positive feedback loop this brings more and more capital into the ETF which allows the twins to gradually sign over a significant % of their coins in return for fiat whilst also pushing up the price into the next hype cycle. This time the cycle is driven by joe public investor, front run by big money, and bitcoin becomes a gold like commodity asset for the first time. Actual gold investment withers to an all time low.

Noone on here knows the future. But a lot of money has been spent speculatively fleshing out the bitcoin ecosystem in the last year. If just 10% of that money starts buying up the actual currency and the public can get in, we could be in for a super bubble of epic proportions. I view the ETF as the biggest on ramp bitcoin will ever see.

Some really good insights, there. Rosy to the point of delusion, but the analysis itself isn't all bad. Do you really think the capital markets are going to bite -- especially in a more aggregated/institutionalized market these days... most people are invested by means of mutual funds rather than screwing around with E-Trade accounts and the big money, even if they think it is a good idea, might be scared of being that guy. I don't know... seems waaaayy too rosy to me.

[inca]

Some really good insights, there. Rosy to the point of delusion, but the analysis itself isn't all bad. Do you really think the capital markets are going to bite -- especially in a more aggregated/institutionalized market these days... most people are invested by means of mutual funds rather than screwing around with E-Trade accounts and the big money, even if they think it is a good idea, might be scared of being that guy. I don't know... seems waaaayy too rosy to me.

Sounds rosy but actually just predicts the next bubble.

Each bubble has required progressively more capital derived from new adopters than the last. This conventionally has been in the form of actual users buying the currency directly. I think going forward (perhaps the final time) it will be driven by flowing pools of investment capital, a modern day global gold rush.

The beauty of it is that it doesn't really even require the userbase of bitcoin to grow rapidly either. It is conceivable that bitcoin could be valued for its investment gold like commodity properties first, then arise as a useful currency in the mainstream ('bits').

I just think there is too much money to be made off of joe public for another bubble not to be 'engineered'

[Newbie1022]

If I were to guess:

1. Bad Scenario -- COIN is a dump effort and it eats into the already modest demand of Bitcoiners... as a result a major exchange fails... people panic;

2. Likely Scenario -- Jumps 50 to 100... stabilizes a bit... then drifts back downwards as it is largely ignored by institutional investors;

3. Plus Scenario -- Big money jumps in, Winklevi buy up more coins for the ETF, people go into a modest bubble rage -- tops out at $1000 (people will be too quick to dump beyond that and probably before that... they know the history).

My sentiments on the odds are:

20, 70, and 10 percent, respectively. Mind that if you think I am being bearish this, as a decision tree, would actually play out as having a strong positive expected value with a buy recommendation. However, I don't expect we'll hear anything on the ETF for still a while longer.

This is pure conjecture, but I suspect, after reading Inca's post, that it might be a bit more grounded. I mean, people are talking 400% - 100,000% profit craziness, again. I thought that had already been appropriately beaten out of the user base at this point.

[ravenjt]

I just think there is too much money to be made off of joe public for another bubble not to be 'engineered'

I agree with yr analysis, but it explains exactly why they wont get permission for an etf which can be sold to retail investors.
It would look far too much like a scam. Btc is far too illiquid

[MrBig]

This ETF gonna take BTC to da moon nonsense reminds me a lot of the LTC on gox delusion of last year (we all know how that ended). BTC is already available for people to buy. If it needs some stupid ETF to pump up it's price while the bagholders dump it, then it is not a worthy investment whatsoever. It's nothing more than an exit strategy for some slimy whales, or another medium for manipulating the BTC market.

[fonzie]

This ETF gonna take BTC to da moon nonsense reminds me a lot of the LTC on gox delusion of last year (we all know how that ended). BTC is already available for people to buy. If it needs some stupid ETF to pump up it's price while the bagholders dump it, then it is not a worthy investment whatsoever. It's nothing more than an exit strategy for some slimy whales, or another medium for manipulating the BTC market.

The "LTC on Gox" pump was actually one of the "best" and most effective pumps in crypto history.

""Pump and dump" (P&D) is a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements".

[lyth0s]

The ETF already has many bitcoins and they have a fixed ratio of 5 shares of COIN per 1 bitcoin. With that being said once enough investors buy enough shares to go over their stockpile of bitcoins, the ETF will be buying 1 new coin per 5 new share purchases.

When COIN first comes out it may hurt bitcoin prices as people may buy the COIN shares instead of bitcoin directly, but as the share buying continues it will help to add a lot of buying pressure from wall street and I believe it will significantly increase the bitcoin marketcap. Wall street is very used to owning shares.... but securely storing bitcoin? Not so much.

[byronbb]

The only downside is it gives large holders a safe way to hedge and take profits. Any large business that accepts bitcoin will enjoy using coin to short and immediately capture the value of the coins they accepted as payment. This solution is much better than using a processor because it would be cheaper. The upsides are pretty obvious, one being it will attract speculators who are going to have a boner trading the volatility.

[cryptasm]

another cryptocurreny? Its like all the other famous ppl coins tbh
Just like Maxcoin

[Nagle]

The Winkelvoss EFT is a dump. They bought a lot of Bitcoins, enough that if they sold them on any Bitcoin exchange, they'd crash the price. Now they want out.  The EFT is a way for them to sell their Bitcoins, hopefully without crashing the market.

It's probably too late for that. They need a big supply of dumb money to exit this way.

[brg444]

The Winkelvoss EFT is a dump. They bought a lot of Bitcoins, enough that if they sold them on any Bitcoin exchange, they'd crash the price. Now they want out.  The EFT is a way for them to sell their Bitcoins, hopefully without crashing the market.

It's probably too late for that. They need a big supply of dumb money to exit this way.

If there's buyers what exactly is the problem?

[Buffer Overflow]

The "LTC on Gox" pump was actually one of the "best" and most effective pumps in crypto history.

I remember that one. LOL . It just run and run that baby.

[Brmaster]

anyone would buy that  EFT?

[Mervyn_Pumpkinhead]

The LTC pump was caused by several factors and the rise could be predicted.

1) LTC was the only considerable Scrypt coin.
2) Scrypt was considered innovative and a possible cure for ASIC industrial mining.
3) Buying pressure for cryptos was strong and needed an alternative output.

The rumors only started the avalanche, that was building up for some time already.
I don't see much future for LTC any longer, because it has lost reasons 1) and 2), so it has nothing special now. Even when buying pressure for cryptos will rise again, then it will flow through alts that have unique attributes.

[Puppet]

The Winkelvoss EFT is a dump. They bought a lot of Bitcoins, enough that if they sold them on any Bitcoin exchange, they'd crash the price. Now they want out.  The EFT is a way for them to sell their Bitcoins, hopefully without crashing the market.

The ETF has been in the works for a very long time. Since at least April 2013. The price today is a tad higher than it was back then,  and probably significantly higher than it was when they acquired their stash. This isnt about them wanting out, this has been the plan all along.

I can only see this as a (very) positive indicator. It will allow many investors to invest in bitcoin in a way that wasnt possible until now. I know plenty of people with money that would be interested to invest some of it in bitcoin in a way that doesnt require them to know anything about bitcoin or securing their PCs/wallets.  Ive been recommending many of them not to buy bitcoins because they are so computer illiterate, it can only end badly. This ETF would give them a way to just call their broker and instruct him to invest a few 10K's in BTC with no risk other than the volatility.

[nakaone]

what is the best way to buy bitcoins now?

an unregulated exchange somewhere in slovenia
localbitcoins with a sick mark-up (good luck buying more than 100 there)

how fucking bearish is this market? an etf opens the door for users who do not trust the two above for investing in bitcoin

we are all internet kiddies and used to these complexities around buying which we are facing nowadays - but most people aren't.

the argument that they use their bitcoins available for dumping is beyond retarded - they are worth maybe around 30 million at this point of time. a small fund from my local bank targeting inflation is worth that.

[Elwar]

The ETF will bring the price up. It will not just be a matter of more interest. It will be a way for large financial firms to include Bitcoin in their portfolios. They will consider it a high risk investment but many funds include a small amount of high risk investments in the mix.

I am a long term bull, I think the price will go up gradually over time but the ETF will bump it up quickly and then continue a gradual climb from there. Though if it causes hype it might jump up very quickly and bubble/pop again.

I think the ETF was partly priced in but the long wait has caused people to move their money out and put it toward other things.

I would say late winter/early spring will be when the ETF is approved. They say it typically takes a year. The ETF was submitted last July but they re-submitted it in February.

[Luxasd]

The ETF will bring the price up. It will not just be a matter of more interest. It will be a way for large financial firms to include Bitcoin in their portfolios. They will consider it a high risk investment but many funds include a small amount of high risk investments in the mix.

I am a long term bull, I think the price will go up gradually over time but the ETF will bump it up quickly and then continue a gradual climb from there. Though if it causes hype it might jump up very quickly and bubble/pop again.

I think the ETF was partly priced in but the long wait has caused people to move their money out and put it toward other things.

I would say late winter/early spring will be when the ETF is approved. They say it typically takes a year. The ETF was submitted last July but they re-submitted it in February.

I'm extremely pessimistic about the ETF, especially because of yesterday.