GBTC Bitcoin Investment Trust Observer - page 32.

ErisDiscordia

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Imposition of ORder = Escalation of Chaos

Quote from: JorgeStolfi on May 09, 2015, 11:27:49 AM

Quote from: jl2012 on May 09, 2015, 10:53:40 AM

The same is true for any retirement fund

In my 20's, I and many colleagues here in Brazil contributed for a few years to a retirement fund that was supposed to be solid and traditional etc. But then it goxxed...

let me guess, it was government-run? Cheesy

In case it wasn't it was of course the failure of not enough government oversight Wink

oda.krell

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Quote from: phoenix1 on May 09, 2015, 06:28:28 AM

@ David Rahaby ... as you say you are long-minded (and I believe you) have you considered just how much the management fees will eat into your BTC over the years? IIRC correctly the annual fee is 2% of NAV and it is taken in BTC not USD, so if you start with 100 BTC ...
After 10 years = 81.7 BTC
After 20 years = 66.8 BTC
After 25 years = 60.3 BTC
[...]

Meh, I'm out of my element here (retirement fund and in the US), but isn't this a bit of a simplistic comparison?

As I understand it, the relevant point here is that GBTC is compatible with a Roth IRA, which is (intended to be) tax free, so depending on how capital gains for "raw" Bitcoin holdings are (and will be) taxed, and whether you are planning to pay those taxes (or, if not, whether you get away with it), those "2% per year" could either turn out to be a lot, or not that much.

Someone more knowledgeable on the topic, please feel free to correct me if the above is factually wrong.

JorgeStolfi

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Quote from: jl2012 on May 09, 2015, 10:53:40 AM

The same is true for any retirement fund

In my 20's, I and many colleagues here in Brazil contributed for a few years to a retirement fund that was supposed to be solid and traditional etc. But then it goxxed...

phoenix1

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Quote from: jl2012 on May 09, 2015, 10:53:40 AM

Quote from: phoenix1 on May 09, 2015, 06:28:28 AM

The same is true for any retirement fund

Yes, but the fees are much lower unless you are going for something actively managed, and even then you would struggle to get anywhere near 2% annually unless you are talking decent hegde funds, where a good manager may take 2% p.a. plus a % of any profits (20% is not unusual).

jl2012

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Quote from: phoenix1 on May 09, 2015, 06:28:28 AM

@ David Rahaby ... as you say you are long-minded (and I believe you) have you considered just how much the management fees will eat into your BTC over the years? IIRC correctly the annual fee is 2% of NAV and it is taken in BTC not USD, so if you start with 100 BTC ...
After 10 years = 81.7 BTC
After 20 years = 66.8 BTC
After 25 years = 60.3 BTC

I am using these time periods as you talk about 'retirement funds'.

So if you hold BTC in this wrapper for 25 years you will pay away 40% in fees, which seems extortionate for something that pays no dividends or coupons, and requires no rebalancing for duration or weighting. It basically sits there in cold-storage.

Put another way, in 10 years, 10 shares of GBTC will not be approximately 1BTC, it will be approximately 0.82 BTC, and at that time the price of the fund should reflect this (ie be based upon it's NAV).

Just wondering if anyone is even looking at or thinking about this ...

The same is true for any retirement fund

bclcjunkie

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it's what's designed for: milk the next rich idiot's tits dry... the risk to these so called "bitcoin trust funds", as if we need them, is practically nil, these are the middlemen or parasites who just pass things around and get paid for that, not to mention occasional twitter blabbering...

i for one, would like this silly rally to go on and have more people like cypherdoc around because these are the kind of turn of events that help me stock up more on cheap gold... i can't wait to get rid of my last bitcoin bags and grab as much gold as possible...

Quote from: phoenix1 on May 09, 2015, 06:28:28 AM

@ David Rahaby ... as you say you are long-minded (and I believe you) have you considered just how much the management fees will eat into your BTC over the years? IIRC correctly the annual fee is 2% of NAV and it is taken in BTC not USD, so if you start with 100 BTC ...
After 10 years = 81.7 BTC
After 20 years = 66.8 BTC
After 25 years = 60.3 BTC

I am using these time periods as you talk about 'retirement funds'.

So if you hold BTC in this wrapper for 25 years you will pay away 40% in fees, which seems extortionate for something that pays no dividends or coupons, and requires no rebalancing for duration or weighting. It basically sits there in cold-storage.

Put another way, in 10 years, 10 shares of GBTC will not be approximately 1BTC, it will be approximately 0.82 BTC, and at that time the price of the fund should reflect this (ie be based upon it's NAV).

Just wondering if anyone is even looking at or thinking about this ...

JorgeStolfi

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Quote from: RoadTrain on May 09, 2015, 09:32:21 AM

Sorry for being ignorant, but how technically these fund fees are paid?

They are discounted when the shares are redeemed, i.e. returned to Grayscale in exchange for the BTC they are supposed to stand for.

RoadTrain

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Sorry for being ignorant, but how technically these fund fees are paid?

phoenix1

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@ David Rahaby ... as you say you are long-minded (and I believe you) have you considered just how much the management fees will eat into your BTC over the years? IIRC correctly the annual fee is 2% of NAV and it is taken in BTC not USD, so if you start with 100 BTC ...
After 10 years = 81.7 BTC
After 20 years = 66.8 BTC
After 25 years = 60.3 BTC

I am using these time periods as you talk about 'retirement funds'.

So if you hold BTC in this wrapper for 25 years you will pay away 40% in fees, which seems extortionate for something that pays no dividends or coupons, and requires no rebalancing for duration or weighting. It basically sits there in cold-storage.

Put another way, in 10 years, 10 shares of GBTC will not be approximately 1BTC, it will be approximately 0.82 BTC, and at that time the price of the fund should reflect this (ie be based upon it's NAV).

Just wondering if anyone is even looking at or thinking about this ...

mmortal03

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Quote from: Chef Ramsay on May 08, 2015, 11:41:21 PM

Quote from: mmortal03 on May 08, 2015, 11:34:52 PM

Quote from: Chef Ramsay on May 08, 2015, 02:15:01 PM

Interesting that this GBTC thing is all situated and having a year behind the original shareholders when it appears this market may be turning a new leaf. Coincidence?

Is it, though? I keep tabs on the 365-day price difference (with the following chart), and a bitcoin investment held for a year continues to be under water right now. Also, note the red line, which is where it will be if the price stays the same.

I see your point but I believe that I posted here or on another site (RPF) in regards to the shareholders' holdings that I believed them to have bought in the 6-700+ range in full, so this could mean they're slightly under water. Yet, the arb opportunity seems worthwhile or the selling and rebuying to check out the market next year to see some gains. Today was good for PR purposes going forward and the entire market.

Yeah, I like the good PR going forward, and I'm cautiously optimistic. The worst case scenario recently for a buyer who held for a year was if they bought on January 15th, 2014, and sold on January 15th, 2015 (-76.16%), and that doesn't apply here. We're off that low.

Wouldn't it be great to know the percentage of these guys that are selling on GBTC *and* buying back real bitcoins at the lower levels? I guess we'll be able to infer on this if the price difference closes. Sounds like a new sort of diff chart could be in order.

Chef Ramsay

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Quote from: mmortal03 on May 08, 2015, 11:34:52 PM

Quote from: Chef Ramsay on May 08, 2015, 02:15:01 PM

Interesting that this GBTC thing is all situated and having a year behind the original shareholders when it appears this market may be turning a new leaf. Coincidence?

Is it, though? I keep tabs on the 365-day price difference (with the following chart), and a bitcoin investment held for a year continues to be under water right now. Also, note the red line, which is where it will be if the price stays the same.

I see your point but I believe that I posted here or on another site (RPF) in regards to the shareholders' holdings that I believed them to have bought in the 6-700+ range in full, so this could mean they're slightly under water. Yet, the arb opportunity seems worthwhile or the selling and rebuying to check out the market next year to see some gains. Today was good for PR purposes going forward and the entire market.

mmortal03

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Quote from: Chef Ramsay on May 08, 2015, 02:15:01 PM

Interesting that this GBTC thing is all situated and having a year behind the original shareholders when it appears this market may be turning a new leaf. Coincidence?

Is it, though? I keep tabs on the 365-day price difference (with the following chart), and a bitcoin investment held for a year continues to be under water right now. Also, note the red line, which is where it will be if the price stays the same.

Chef Ramsay

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Very positive day for GBTC, kindly and aggressively building upon itself day by day during the first week of active service. I wonder if this is the premonition that Barry was alluding to in his ''promising another bubble'' tweet.. Nutcase sure was active today so I'm puzzled who set that creep in motion on such a day.

hodlmybtc

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Exciting times ahead Cool

ImI

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Definitely a good start!

coinableS

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The #1 in USD volume on OTCQX today was RHHBY (Roche Holding Ltd) that did $21 million. GBTC did $750,020 in USD volume today. That's 3.5% of the #1 traded symbol of the QX market, not a bad figure IMO. Today there was a total $125 million in volume for all of OTCQX market. If you calculate it GBTC was 0.5% of that. Not a bad slice of the pie if you ask me.

marcus_of_augustus

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Eadem mutata resurgo

Quote from: David Rabahy on May 08, 2015, 02:44:20 PM

Quote from: bad trader on May 08, 2015, 02:24:13 PM

Quote from: David Rabahy on May 08, 2015, 02:12:09 PM

If I could sell and then use the proceeds to quickly and easily purchase more BIT shares at NAV then of course but there's nothing quick and easy about it. It's the timing that hurts the most. The extra work of proving I am accredited again would be worth it I suppose. But if I miss a rise while out of BIT shares messing around with this game isn't worth the risk to me. How much can BIT shares (Bitcoin) rise in the couple of weeks or more that it would take to move my proceeds back in? I don't want to miss the big party trying to grab a fast gain.

I understand. If I was doing arbitrage on bitcoin, I would try to set it up so I can buy and sell at the same time. (I didn't realize you were talking about delays between selling and buying.)

If the situation were different, i.e. trivially quick and easy, than I'd arbitrage the hell out of GBTC until it was at parity (taking into account the ~0.1 factor) with BTC.

Thanks for your view-from-the-cockpit accounts on this ... makes the seemingly mysterious GBTC pricing more understandable hearing incentives, practicalities, etc for trading this instrument.

Now I'm wondering if GBTC is actually closer to the true price of bitcoin, i.e. on a fully regulated exchange without all the quote stuffing, order spoofing and crazy manipulation rampant on stamp, finex, OKCoin, etc.

Sometimes those prices on existing exchanges look totally fabricated, all moving exactly in lockstep, $10 step changes up or down ...

bad trader

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Well, the daily volume was ~1480.7 BTC.

If the volume rises and stays in the thousands and a decent chunk of it goes into arbitrage (maybe not), it should have a noticeable direct effect on BTC prices.

David Rabahy

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Quote from: bobabouey2 on May 08, 2015, 02:42:42 PM

Still, you'd think it would be more streamlined if you have already purchased from them. Have you checked they'd make you go through the whole process again?

Yeppers.

gotmilk_

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Quote from: David Rabahy on May 08, 2015, 02:40:39 PM

Quote from: gotmilk_ on May 08, 2015, 02:17:20 PM

GBTC price will probably continue to be 50-70% above BTC price for next month (or more?). So I guess buying first and than selling isn't so risky... Or? Not saying it is safe to buy, just want to hear your opinion Wink

I suppose the GBTC price comes at a premium because the source (people like me) is constrained and the demand (people like you) is less so. I'm unlikely to change my mind soon so if that's common then the source will continue to be constrained *but* what will you and yours be thinking? Are your funds retirement or non-retirement funds? Playing GBTC is just like playing BTC or anything else. That GBTC is loosely anchored to BTC is only mildly interesting?

Fair enough Wink

Well I'm not from US...

Topic: GBTC Bitcoin Investment Trust Observer - page 32. (Read 262354 times)