I've been working on A LOT of bitcoin related ventures lately. Some pan out, some don't. That's the way life goes.
During all of this I have met and talked to numerous people from all walks of life and have of course been evangelizing bitcoin the whole time.
I made some interesting contacts one of whom is a decision maker for a largish financial institution.
When I told him about bitcoin a year or so ago he was excited but very, very skeptical about it.
He has been paying attention to everything that has happened lately and he contacted me today to bounce an idea off me that frankly I'm not sure how I feel about and thought I would share the idea here to see what people think.
Now understand that this is not rumor, or speculation.
There is a very good chance that this won't occur and I'm not offering nor am I able to offer any sort of opportunity.
This is not some sort of insider information and if the price of bitcoin takes a jump after this it will probably kill the idea off.
This is not an announcement it is merely a hypothetical. I am just asking the folks who would be most impacted by it, what they think of the idea.
Also you should be aware that I am not in a paid consulting position, he just views me as an SME and asked my honest opinion.
I am having trouble forming one, so I'm asking you folks.
Should I say, "Yeah cool, good idea you should look into it." or "This is a bad idea and will only cause harm."
The underlaying concept is basically a basket of assets that are bundled into a holding structure of some sort and traded as a single stock on a stock exchange.
The core idea is to accumulate 210,000 BTC. (probably through a series of bulk purchase agreements with established operators).
(He originally said 10M but I tried to explain why that wasn't feasible, even 210,000 would be a bit of a stretch).
You then create an entity and assign it ownership over the BTC.
The entity will own this basket of currency and it represents a total 1% of the bitcoins that will ever be mined.
(An alternative could be to purchase 1% of the currently available BTC and then try and keep up, but I think upfront is better).
It believe the goal would be simply to hold all of that BTC in perpetuity.
Then you just place the entity on a major exchange and let it trade freely.
Ideally this should cause the entity to trade at it's NAV, which is entirely comprised of BTC thus giving us a total market valuation of BTC.
In my mind this gives an instant way of calculating the value of BTC on the open market and allows people to hold BTC in their IRAs or 401Ks without unduly limiting the supply and creating a hoarding situation, or trading the BTC rapidly which lengthens the block chain needlessly. When people are ready to cash out their holdings they can do so as easily as selling Ford or Coca Cola stock. Major players could liquidate without crashing the price of BTC for the rest of us.
The disadvantage I see is that this locks up an awful lot of bitcoin into the hands of a single company. Still that may not be a bad thing since the interests of the company are solely in keeping the price of BTC stable and gradually appreciating.
So my question is this. If a major financial institution were to consider actually backing this thing properly , ensuring that it is fully registered, fully compliant, no different than any other publicly traded entity.
Would you consider it a good thing or a bad thing for bitcoin? Why?
Would you buy? Would you sell your bitcoins to buy once it reaches the market? Why or Why Not?
What would be the best way of accumulating this much BTC without driving the price through the roof? (legitimate question because I don't think there are 210,000 BTC liquid right now).
Thanks!
