GBTC Bitcoin Investment Trust Observer - page 35.

bobabouey2

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Quote from: pleaseexplain on May 05, 2015, 07:57:10 PM

with all this messy way this quazi etf works why is not the following also possible until (if ever) COIN arrives.

I set up a company in a country (X) that sees bitcoin as a commodity. I buy 20,000 bitcoin. I then set up a company in the US for example which buys company x. The US company has 1 million shares. People are able to buy the shares and sell them to others as well.

I make some money on fees and an etf like product is immediately available to people - no year long wait etc.

Comments?

Creating a shell public company that has freely tradeable shares in the US is not easy. They are known as "blank check" companies and use to be the source of lots of scams.

There is a current version known as a SPAC (Special Purpose Acquisition Company), but there are many restraints on what they can do, and you still have to generally describe the type of investment you're going to pursue. If you said you were going to acquire bitcoin, you'd get stuck in the same quagmire as COIN.

skivrmt

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Quote from: Hunyadi on May 06, 2015, 02:23:31 AM

Quote from: lay785 on May 05, 2015, 10:59:58 PM

how can we short GBTC?

Hahahah! Good question!

You can't. Simple answer. No one will let you borrow the shares to short.

gotmilk_

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Quote from: lay785 on May 05, 2015, 10:59:58 PM

how can we short GBTC?

You can't.

Hunyadi

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☑ ♟ ☐ ♚

Quote from: lay785 on May 05, 2015, 10:59:58 PM

how can we short GBTC?

Hahahah! Good question!

lay785

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how can we short GBTC?

Chef Ramsay

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Quote from: marcus_of_augustus on May 05, 2015, 09:42:32 PM

seems like even localbitcoins might have more reliable pricing than this thing ??

Maybe but I think we need to give this thing a few weeks to manifest itself to get the bigger picture for the mood of the market.

JorgeStolfi

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Quote from: pleaseexplain on May 05, 2015, 07:57:10 PM

with all this messy way this quazi etf works why is not the following also possible until (if ever) COIN arrives.

I set up a company in a country (X) that sees bitcoin as a commodity. I buy 20,000 bitcoin. I then set up a company in the US for example which buys company x. The US company has 1 million shares. People are able to buy the shares and sell them to others as well.

I make some money on fees and an etf like product is immediately available to people - no year long wait etc.

Comments?

You don't need that complication. The Fortress Investment Group (a huge investment fund) and Overstock are traded in the open market, and at one time both owned some raw bitcoins. (Overstock still does, Fortress may have unloaded them in early 2014.)

So, when you bought shares of those companies, you became owner of some bitcoins. (And maybe in a much stricter sense than when you buy BIT shares, because the latter may not really give you ownership of a slice of Grayscale.)

The catch is that (AFAIK) the SEC will require the company to post quarterly and annual reports on their finances, and the company needs the SEC's permission to list its shares on NYSE or NASDAQ. If the assets of the company are entirely bitcoins, the company would have no revenue, just expenses, and would look no better than COIN; therefore, it would probably be in the same limbo as COIN, waiting for the SEC's decision...

marcus_of_augustus

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Eadem mutata resurgo

seems like even localbitcoins might have more reliable pricing than this thing ??

pleaseexplain

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with all this messy way this quazi etf works why is not the following also possible until (if ever) COIN arrives.

I set up a company in a country (X) that sees bitcoin as a commodity. I buy 20,000 bitcoin. I then set up a company in the US for example which buys company x. The US company has 1 million shares. People are able to buy the shares and sell them to others as well.

I make some money on fees and an etf like product is immediately available to people - no year long wait etc.

Comments?

coinableS

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Quote from: JorgeStolfi on May 05, 2015, 06:51:48 PM

GBTC data from OTCQX page at end of day:


Date             day's price range      day's volume
---------------+----------------------+-------------
2015-05-04        37.98 --   42.00               765
2015-05-05        55.00 --   94.86               435

At this rate one GBTC share will be worth $2,000 in no time! Cheesy

JorgeStolfi

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BIT shares (GBTC) daily trading summary:



           !   OTX !   OTX !   FRT !    FRT !    FRT !        FRT !       FRT !     
Date       !  PRLO !  PRHI !  PRLO !   PRHI !   VSHR !       VUSD !      PRAV ! OBS 
-----------+-------+-------+-------+--------+--------+------------+-----------+----------
2015-05-04 | 37.98 | 42.00 |   .   | 200.00 |    765 |        .   |    .      | (*0)(*1)
2015-05-05 | 55.00 | 94.86 | 50.00 | 175.00 |    435 |   32198.00 |  74.01839 | (*0)
2015-05-06 |   .   |   .   | 65.00 |  68.00 |    125 |    8268.50 |  66.14800 | (*0)
2015-05-07 | 40.00 | 66.00 | 40.00 |  86.00 |   2844 |  163651.00 |  57.54255 |     
2015-05-08 | 49.00 | 59.00 | 49.00 |  59.00 |  14807 |  750019.70 |  50.65305 |     

2015-05-11 | 50.00 | 57.95 | 49.50 |  57.95 |   2756 |  143247.34 |  51.97654 |     
2015-05-12 | 49.00 | 50.01 | 49.00 |  52.25 |   2286 |  113299.25 |  49.56223 |     
2015-05-13 | 49.00 | 49.00 | 49.00 |  50.00 |    327 |   16113.10 |  49.27554 |     
2015-05-14 | 44.00 | 49.00 | 44.00 |  49.95 |  20894 | 1004923.74 |  48.09628 | (*2)
2015-05-15 | 38.00 | 45.00 | 38.00 |  45.00 |   2320 |   97444.35 |  42.00188 |     

2015-05-18 | 27.15 | 38.00 | 27.15 |  38.00 |   4950 |  158115.83 |  31.94259 |     
2015-05-19 | 27.90 | 29.50 | 27.89 |  29.90 |   4308 |  122327.92 |  28.39552 |

"OTX" data from the GBTC quote page at OTCQX.
"FRT" data from the Freerealtime site, except those flagged (*0) and (*1) (see below).

PRLO = Lowest price in specified day.

PRHI = Highest price in the specified day.

VSHR = Number of shares traded in day.

VUSD = Trade volume in USD (sum over all trades of num of shares times price per share).

PRAV = Average price in day = VUSD/VSHR.

OBSERVATIONS:

(*0) The "FRT" price range for this entry was obtained from this post.

(*1) For 2015-05-04, the values of PRLO, VSHR, VUSD, and PRAV could not
be determined; the value of VSHR was taken from the OTCQX page.

(*2) The summary pages at OTCQX and FreeRealTime.com say 19894, but
adding the FreeRealTime list of trades we get 20894 (1000 more). The
VSHR value given is the latter. There were 2 trades near the end of the
day; perhaps one was undoing the other?

Alley

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I like the ask for $500,000 per coin.

elux

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Day 2: Daily Range 55.00 - 94.86 (Lots of 100+ shares) 550-948 USD/BTC

Kupsi

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9.9.2012: I predict that single digits... <- FAIL

Quote from: JorgeStolfi on May 05, 2015, 05:58:33 PM

Quote from: rocks on May 05, 2015, 04:13:59 PM

Thanks for the explanation, if this is the case then the SEC policy doesn't seem to make a lot of sense.

After accredited investors purchase shares and hold for 1-year, they are now selling those shares to non-accredited investors on the OTC market. Which means that non-accredited investors are buying the fund in the end. The only difference for GBTC is that only accredited investors can initiate the creation of shares, but anyone can trade them.

If I'm understanding this correctly is seems absurd.

The "Accredited Investor" thing was relevant until last October or so, while BIT was under different rules. Accredited Investors (i.e. individuals with "money that they could afford to lose") could buy shares directly from SecondMarket by paying in USD, at about the current price o 0.1 BTC per share.

Now, only "Authorized Pariticpants" can get shares from Grayscale, by giving BTC to it. SecondMarket is an Authorized Participant and so they may still be able to act as middlemen and sell new shares to individuals for USD, as they did before (does the 1 year holding apply to them too?). If so, perhaps they still require the buyer to be an Accredited Investor. Those shares would still have to be held for one year before resale. Perhaps SecondMarket now can charge a premium for those shares?

https://twitter.com/GrayscaleInvest/status/595312440889495552

Quote

Qualified accredited investors** can choose to invest directly in the BIT at the applicable NAV per share. The BIT’s shares are subject to significant resale and transfer restrictions.

http://grayscale.co/investors/

JorgeStolfi

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Quote from: rocks on May 05, 2015, 04:13:59 PM

Thanks for the explanation, if this is the case then the SEC policy doesn't seem to make a lot of sense.

After accredited investors purchase shares and hold for 1-year, they are now selling those shares to non-accredited investors on the OTC market. Which means that non-accredited investors are buying the fund in the end. The only difference for GBTC is that only accredited investors can initiate the creation of shares, but anyone can trade them.

If I'm understanding this correctly is seems absurd.

The "Accredited Investor" thing was relevant until last October or so, while BIT was under different rules. Accredited Investors (i.e. individuals with "money that they could afford to lose") could buy shares directly from SecondMarket by paying in USD, at about the current price o 0.1 BTC per share.

Now, only "Authorized Pariticpants" can get shares from Grayscale, by giving BTC to it. SecondMarket is an Authorized Participant and so they may still be able to act as middlemen and sell new shares to individuals for USD, as they did before (does the 1 year holding apply to them too?). If so, perhaps they still require the buyer to be an Accredited Investor. Those shares would still have to be held for one year before resale. Perhaps SecondMarket now can charge a premium for those shares?

Biodom

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Quote from: rocks on May 05, 2015, 04:13:59 PM

Quote from: prolixus on May 05, 2015, 03:32:17 PM

Quote from: rocks on May 05, 2015, 03:02:26 PM

Quote from: Alley on May 05, 2015, 12:01:16 PM

Winklevii are probably foaming at the mouth after seeing these shares go for over double market value. Probably on the phone with the SEC right now lol.

Well the twins should get off the pot and make this happen. They've been talking about it for what 2 years? If GBTC has been able to find an approval path, what is the holdup for COIN? Worse, it seems that other potential funds have taken a wait and see approach with COIN and decided to let them pave the way and follow. But if COIN does not execute that just stalls the market.

The price action on GBTC is demonstrating the real investment potential that OTC markets could unlock. This needs to happen and faster.

BTW, which brokers have people had success at least putting orders in? I have schwab and they are providing quotes, but are not offering trades yet.

Actually GBTC has taken a path that doesn't require approval. They're claiming an exemption from securities regulation under Reg D which means they're only allowed to take funds directly from accredited investors and the reason the shares are subject to a restricted period.

The holdup for COIN is entirely on SEC's part. The commission has the authority to simply not grant approval for as long as it wants to.

Thanks for the explanation, if this is the case then the SEC policy doesn't seem to make a lot of sense.

After accredited investors purchase shares and hold for 1-year, they are now selling those shares to non-accredited investors on the OTC market. Which means that non-accredited investors are buying the fund in the end. The only difference for GBTC is that only accredited investors can initiate the creation of shares, but anyone can trade them.

If I'm understanding this correctly is seems absurd.

GBTC price does not demonstrate any investment potential, it is just a perversion of free markets.
GBTC has no value beside bitcoin and as such, it should be worth $23.5, NOT $55, OR bitcoin should be worth ~$550.
Conclusion: GBTC at $55 (with bitcoin at $235) is an abomination.
At least GLD ETF generally follows the the underlying commodity price (even with some discount due to fees)

ImI

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I expect approval together with the Bitlicence which is expected end of may as Lawsky declared.

megadeth

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bagholder since 2013

We'll know if the COIN ETF is likely to be approved when insiders orchestrate a massive dump for their buddies to get in.

rocks

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Quote from: prolixus on May 05, 2015, 03:32:17 PM

Quote from: rocks on May 05, 2015, 03:02:26 PM

Quote from: Alley on May 05, 2015, 12:01:16 PM

Winklevii are probably foaming at the mouth after seeing these shares go for over double market value. Probably on the phone with the SEC right now lol.

Well the twins should get off the pot and make this happen. They've been talking about it for what 2 years? If GBTC has been able to find an approval path, what is the holdup for COIN? Worse, it seems that other potential funds have taken a wait and see approach with COIN and decided to let them pave the way and follow. But if COIN does not execute that just stalls the market.

The price action on GBTC is demonstrating the real investment potential that OTC markets could unlock. This needs to happen and faster.

BTW, which brokers have people had success at least putting orders in? I have schwab and they are providing quotes, but are not offering trades yet.

Actually GBTC has taken a path that doesn't require approval. They're claiming an exemption from securities regulation under Reg D which means they're only allowed to take funds directly from accredited investors and the reason the shares are subject to a restricted period.

The holdup for COIN is entirely on SEC's part. The commission has the authority to simply not grant approval for as long as it wants to.

Thanks for the explanation, if this is the case then the SEC policy doesn't seem to make a lot of sense.

After accredited investors purchase shares and hold for 1-year, they are now selling those shares to non-accredited investors on the OTC market. Which means that non-accredited investors are buying the fund in the end. The only difference for GBTC is that only accredited investors can initiate the creation of shares, but anyone can trade them.

If I'm understanding this correctly is seems absurd.

Mayer Amschel

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Well i hope that it rises again, i just bought quite a large bag...

HODL

- Mayer Amschel

Topic: GBTC Bitcoin Investment Trust Observer - page 35. (Read 262354 times)