Topic: [BTC-TC] BTC Growth: Capital Growth via Hedge Fund-Style Investing - page 6. (Read 251447 times)

There was one asset, Bakewell, which transfered from BTCT to BitFunder several months ago, the process was pretty quick and easy. The issuer of that asset later tried to run away with the shareholders money, but that is a different issue entirely.

I can imagine it will be extended to also include BTCT imports now.

IIRC, that was set up specifically for GLBSE.

I know that BitFunder has some option to recover/import shares already. On the account page, there's an option to "claim shares", where in my case it says that no shares were found linked to my email address (which is true) and there's an option to fill in a different email address to claim shares from (presumably it will send some verification code to that email address to verify ownership). I don't know if Havelock has a similar feature.

It's a good question. The exchange emails all issuers with a list of current participants in their assets. A new exchange would provide some means of importing that list, such that old numbers would match up with new ones.

Although I've just said in an earlier note that I have no intention to suspend trading in the fund, in the case of a transfer to a new exchange, we would announce a planned suspension of trading -- and not a surprise one coming out of the blue "for your own good" -- so that we could secure a current participant list. With that list in hand, we could then begin a move to a different exchange.

EDIT: Whoops, I should have paid more attention to that notice saying the thread had been updated while I was typing, as it looks like Rannasha has already done a good job of covering this.

BTCT asset issuers have access to shareholder-lists containing:
- email address
- number of shares
- public BTC address (new feature, if you haven't set this yet, do so quickly)

With this information it is easy (though still requiring some work) to link people to their shares.

This is the first time I've invested in a fund such as this, so I apologize if this is a stupid question - as the current investments have been made via semi-anonymous "user IDs" on BTCT, how will you know how to tie an investment to the same person on a new exchange?

Two quick updates...

First, following some developments with other securities on both BTC-TC and Litecoin Global, I would like to make two points clear to participants in BTC-GROWTH:

• Whatever the eventual disposition of the fund -- continuing on another exchange or closing up shop -- I will make every effort to treat all participants in our fund equally. I will emphatically not be discriminating on the basis of position size.
• I have no intention of suspending trading in the fund. We're all grown-ups here, and participants do not need me forcibly restricting their liquidity.

Second, I have been in contact with another of the exchange operators, and that operator has indicated they will be in discussion with their legal team shortly regarding the potential listing of the fund. I will post an update on this if and when I have something meaningful to report.

Way to hedge

Greg

I'd like to add to the chorus encouraging you to do all that you can to re-list on another exchange and continue if possible. If anything, the happenings at BTC-TC speak powerfully to the importance of hedging in this space and the need for a fund such as this one.

It's far better to give a slightly pessimistic valuation now - then see it get a bit better - than to give an optimistic valuation now and then have to keep reducing it.

Valuations of funds should ALWAYS be based on what you're pretty certain you can realise - which, right now, isn't much for some securities on BTC-TC/LTC-Global.

OK, I see your point, it is the only meaningful observable data to assign a number to the portfolio value. I guess my point is more that the situation is in a state of high flux, and that number will change rapidly as people learn about the order book being wiped and start to add more bids at higher and higher points, so selling now at 80% price would be unwise for people holding this fund.

Dude. You are awesome.

It's exactly the right thing to do at the moment, because that -- and only that -- provides an indication of the fund's liquid net value. When some assets are likely to be wiped out entirely (BTC-TRADING-PT, for example), nobody cares what the 7-day moving average or 30-day moving average might be.

I took the time to release a special interim report immediately so that participants could have quantitative facts in front of them, right now, telling them exactly where we stand. Will things change over the next few hours and days? Of course they will, and hopefully for the better -- but that doesn't make it "a bad way to do things" to have given the specific, quantitative information as quickly as humanly possible.


There's no need to wait and see: of course it "worked" to the extent that the vast majority of the fund's capital is immune to BTC-TC's closure.

Valueing everything at bid price is a bad way to do things at the moment. Burnsides just wiped the order book, so naturally the bids are very sparse. Let things settle a little bit, move this to Havelock or BitFunder and carry on as normal. You went to great lengths saying the money was spread among various platforms, lets see if that strategy works as well you said it would.

Yes, of course they're very different beasts. My point was just that your participants now have their capital back, and they can exercise their own judgement as to how best to allocate it going forward. Participants in BTC-GROWTH do not have their capital back, and therefore they have no discretion over how to allocate their capital.

However, I think the point probably needs to be made again: continuing with the fund is only an option if there is an exchange ready with a plan to take over the management infrastructure hole left behind by BTC-TC. I am not going to run the fund manually, handling share transfers via email, friedcat-style.

The only real question, then, is how long to wait for clarity on the availability of another exchange platform. I don't like to speculate, but if I imagine myself in the shoes of Burnside, Ukyo, Lightbox, etc., I imagine that I would be putting something out within the next couple of days to indicate whether they will be coordinating to provide a path forward for those listed on BTC-TC. If that happens, it will be a very different landscape than if the only alternatives are to close or to run the fund manually.

(The third option you mentioned addresses the question of returning capital, but it leaves that underlying problem of management infrastructure still waiting for an answer.)


And vice versa. I really appreciate the certainty of seeing the capital sent out so quickly.

There's a few pretty big differences between my fund and yours - which made closure of mine a no-brainer decision:

1.  It was denominated in LTC.  Nowhere else runs a credible LTC-denominated security exchange.
2.  The fund had a lot of capital raised via bonds (approximately half of gross assets managed).  It was not palatable to consider continuing to pay interest on bonds during a move - with uncertainty of what would exist anyway.
3.  LTC-ATF was pretty much entirely a trading fund rather than investment with most of its value as cash at all times.
4.  It had run for a year making very significant profits.  With me owning over half the fund, the fund itself had enough cash to clear all bonds and pay everyone out at last NAV/U (other than myself).  With the profit I'd personally made I was fine with taking the loss on what actual non-cash assets there were.  I've personally made 1k-2K BTC from my own investment in LTC-ATF - counting in reinvestment of profits that I cashed out - so was fine taking a 25-100 BTC loss now to get it all closed out quickly with the minimum of hassle for myself.

So there's pretty significant reasons why the course I've taken with LTC-ATF isn't necessarily the best one for you.

There is a third option you could consider - somewhere in between the two you listed.  That's to dividend out now whatever you have in cash and continue with the other assets.  That gives flexibility to investors with what portion of their investment IS immediately realisable without significant loss - but keeps your options open with what to do with the rest.  Of course that has the disadvantage for you that you have to continue doing the work - but that's unavoidable to some extent anyway.

I (it was LTC-ATF - but now it's me personally) hold some of your shares (was trying to trade the spread) so I do actually have some interest in what happens here.

As several folks have spoken up in favour of not closing the fund, I'd just like to clarify my thinking on currently ranking a fund closure at the top of the list of options.

First, note that I have specifically said that this thinking will change if another exchange steps up to the plate with a credible plan for supporting the continuing operation of assets skewered by BTC-TC. Participants should be asbolutely clear about this: depending on the underlying reasons for the closure of BTC-TC, it is entirely possible that no other exchange will be able to take over BTC-TC assets; nobody yet knows the answer to this question. If no other exchange offers a credible plan, it is not possible to continue with the fund anyway.

In terms of risk to capital, there are only two realistic scenarios to consider:

1) The BTC-TC closure is an isolated event, all listed assets on both BTC-TC and LitecoinGlobal find new homes, and asset values return to something approaching what they were before the closure.

2) The BTC-TC closure is not an isolated event, some listed assets on both BTC-TC and LitecoinGlobal do not find new homes, and asset values do not return to something approaching what they were before the closure.

My own assessment is that number 2 is more likely than number 1: I believe this will have significant knock-on effects across the Bitcoin asset market. To be sure, I don't think the Bitcoin asset market is going to dry up and blow away -- of course not -- but I do think it's going to take some time to digest this event, and in the interim there is significant risk of further capital loss associated with simply waiting it out.

Moreover, suppose for the sake of argument that the fund had already closed (as Deprived has already done with one of his assets, for example). If participants are returned control of their own capital, then they are free to choose exactly what to do with it: if participants would like to dive back into BTC-TC and scoop up some cut-rate assets while waiting for scenario number 1 to materialize, then they can do so. And if other participants do not wish to wait, and they believe that scenario number 2 is more likely, then they can handle their capital appropriately.

The upshot is that by prioritising the option of fund closure -- again, in the absence of a credible plan from another exchange to support the continued operation of BTC-TC assets -- I am aiming to return control to participants, and I am putting a floor on the capital loss which could actually become worse, depending on whether BTC-TC shows any improvement in terms of how it handles the closure. The exchange's handling of the closure so far has not exactly been a paragon of consideration for the interests of market participants.

I agree that a swift forced buyback is probably the worst option. Bids are slowly stabilizing and recovering on BTCT, at least for those assets that have operators that are considered trustworthy and that are generally expected to handle the situation properly (such as liquidation with minimal losses or transfer of shares to a different exchange).

I think it would be best for the fund to wait for the issuers of the assets that it has invested in to report their contingency plans.

Agree