GBTC Bitcoin Investment Trust Observer - page 52.

jehst

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21 million. I want them all.

So BIT started taking money in October 2013 right? And BIT investments made up until March 2014 are eligible for sale now, right? The problem for GBTC buyers is that the BTC price quickly skyrocketed after October 2013. There may not be much supply anywhere below a $600/BTC rate unless people were patient enough to lockup $25,000+ USD for over a year only to sell now at a loss.

Wrong.

Even if the BIT investors bought BTC at a $1000/BTC rate, they can sell through GBTC at a small premium (e.g. 5%) and immediately buy BTC. Then they will increase their bitcoin holdings without risk. Every single eligible holder will have an incentive to sell as long as demand is higher than supply (creating a premium). The market is waiting to see if demand is, in fact, higher than supply.

chriswen

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Our transfer agent, Continental Stock Transfer & Trust, will be providing each eligible shareholder a share ownership statement. You will receive an e-mail from us in the coming days with a copy of this statement.

Cconvert2G36

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Quote from: JorgeStolfi on March 26, 2015, 07:20:15 PM

Someone asked about short selling; perhaps this entry from the OTCQX Learn/FAQ page is relevant:

Quote

Is short selling allowed for OTCQX, OTCQB and OTC Pink securities?

Yes – short selling is allowed for OTCQX, OTCQB and OTC Pink securities. You may find the short interest (amount of shares sold short) for specific securities by selecting the “Short Sale” tab within the Quote page or by going to the Short Sales Data page.

Short selling = normal market function

Naked short selling = not so much

JorgeStolfi

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Someone asked about short selling; perhaps this entry from the OTCQX Learn/FAQ page is relevant:

Quote

Is short selling allowed for OTCQX, OTCQB and OTC Pink securities?

Yes – short selling is allowed for OTCQX, OTCQB and OTC Pink securities. You may find the short interest (amount of shares sold short) for specific securities by selecting the “Short Sale” tab within the Quote page or by going to the Short Sales Data page.

JorgeStolfi

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Quote from: Roy Badami on March 26, 2015, 05:44:51 PM

The accredited investors that BIT has hitherto been limited to will either (a) have little difficulty understanding the structure or (b) engage the services of an investment professional to explain it to them them.

Also, bear in mind that these are regulatory legal documents you're reading - I'm sure the customer facing communications that investors receive from SecondMarket and/or Grayscale are rather more user-friendly!

AFAIK, "accredited investors" are simply people who can demonstrate to have enough money; not necessarily experienced investors. They now have to deal with a broker, and understand how the OTC work to understand why the price that they pay to the broker is neither the market price of 0.1 BTC nor the price listed on the OTCQX page...

As for BIT's "customer facing communication", the samples I have seen do not seem much better. At least the financial report is supposed to spell out all the details...

Anyway, good luck to the investors...

Biodom

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Quote from: gotmilk_ on March 26, 2015, 05:32:40 PM

Quote from: Biodom on March 26, 2015, 05:16:49 PM

Quote from: gotmilk_ on March 26, 2015, 03:45:01 PM

Those investors who bought in sub 400$ and are already able to sell can now make some money... They can sell 50$ per share (100 shares bid) and buy new shares (as btc buyer at BIT) at current price Cheesy

it is entirely possible that BIT investors were the one who shorted bitcoin at least from the recent $300 to $240 yesterday when someone covered a bunch.
They (BIT investors) can now buy BTC cheap on coinbase exchange, then "release" their bitcoins in BIT, creating a "loss" (if they bought higher), but having the same amounts of bitcoins as before.

If you look on the first page you can see that BIT btc holdings didn't change much lately.

Not yet, of course. They had a losing position in BIT, hence why not short "real bitcoin" en masse (I assume at least from $300 a few days ago once they got a whiff of incoming approval). Now they can cover short profitably and even buy the equivalent of their bitcoin holdings in BIT/Second market/greyscale, THEN sell their bitcoins in BIT (even at the loss). The result: same number of bitcoins as before (now with $240-251 cost basis, assuming that they started buying yesterday) PLUS, once they liquidate bitcoin that they bought at higher prices, they would have losses that they could apply to gains in other assets.

Roy Badami

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The accredited investors that BIT has hitherto been limited to will either (a) have little difficulty understanding the structure or (b) engage the services of an investment professional to explain it to them them.

Also, bear in mind that these are regulatory legal documents you're reading - I'm sure the customer facing communications that investors receive from SecondMarket and/or Grayscale are rather more user-friendly!

roy

gotmilk_

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Quote from: Biodom on March 26, 2015, 05:16:49 PM

Quote from: gotmilk_ on March 26, 2015, 03:45:01 PM

Those investors who bought in sub 400$ and are already able to sell can now make some money... They can sell 50$ per share (100 shares bid) and buy new shares (as btc buyer at BIT) at current price Cheesy

it is entirely possible that BIT investors were the one who shorted bitcoin at least from the recent $300 to $240 yesterday when someone covered a bunch.
They (BIT investors) can now buy BTC cheap on coinbase exchange, then "release" their bitcoins in BIT, creating a "loss" (if they bought higher), but having the same amounts of bitcoins as before.

If you look on the first page you can see that BIT btc holdings didn't change much lately.

Quote from: JorgeStolfi on March 26, 2015, 04:57:20 PM

Oh boy.

I imagine that the BIT investors too must be thoroughly confused by the changes. They bought shares from SecondMarket with dollars, but now they have to understand this complicated structure of 6-7 companies with 3-4 different roles if they want to trade them. They may more easily understand Satoshi's paper than the material put out by SecondMarket and Greyscale to "explain" how the fund now works... Tongue

You really need to check how OTC market is working.

Roy Badami

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Quote from: JorgeStolfi on March 26, 2015, 04:57:20 PM

Oh boy.

I imagine that the BIT investors too must be thoroughly confused by the changes. They bought shares from SecondMarket with dollars, but now they have to understand this complicated structure of 6-7 companies with 3-4 different roles if they want to trade them. They may more easily understand Satoshi's paper than the material put out by SecondMarket and Greyscale to "explain" how the fund now works... Tongue

They don't have to understand the structure, they can simply sell their shares on the OTC via any broker (provided they've held them for at least 12 months).

Biodom

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Quote from: gotmilk_ on March 26, 2015, 03:45:01 PM

Those investors who bought in sub 400$ and are already able to sell can now make some money... They can sell 50$ per share (100 shares bid) and buy new shares (as btc buyer at BIT) at current price Cheesy

it is entirely possible that BIT investors were those who shorted bitcoin at least from the recent $300 to $240 yesterday when someone covered a bunch.
They (BIT investors) can now buy BTC cheap on coinbase exchange, then "release" their bitcoins in BIT, creating a "loss" (if they bought higher), but having the same amounts of bitcoins as before.

JorgeStolfi

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Oh boy.

I imagine that the BIT investors too must be thoroughly confused by the changes. They bought shares from SecondMarket with dollars, but now they have to understand this complicated structure of 6-7 companies with 3-4 different roles if they want to trade them. They may more easily understand Satoshi's paper than the material put out by SecondMarket and Greyscale to "explain" how the fund now works... Tongue

Roy Badami

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Or to put it another way - sure, the Authorized Participants (or 'hierarchy of brokers', as you put it) are responsible for buying BTC to create shares. But SecondMarket is a registered broker-dealer - and who's to say it isn't still the only broker participating in this way?

gotmilk_

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Those investors who bought in sub 400$ and are already able to sell can now make some money... They can sell 50$ per share (100 shares bid) and buy new shares (as btc buyer at BIT) at current price Cheesy

marcus_of_augustus

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Eadem mutata resurgo

Quote

snip ... have your shares electronically transferred via Direct Registration System (DRS)

... should have used the blockchain for clearing and settlement ...??

Alley

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Looks like a new bid is up for 100 shares for $50 per share. So whoever it is is valueing bitcoins at $500 each? If nobody is selling this is pretty bullish.

Roy Badami

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Quote from: JorgeStolfi on March 26, 2015, 03:25:50 PM

Quote from: Roy Badami on March 26, 2015, 03:22:01 PM

Bottom of p32 of the Interim Financial Statement (linked from http://www.otcmarkets.com/stock/GBTC/filings ) says

Quote

As of the date of this Disclosure Statement, SecondMarket, Inc. has signed a Participant Agreement with the Sponsor and the Trust and may create and redeem Baskets.

So, do you understand that as meaning that SecondMarket can still sell and (perhaps) redeem shares to investors using dollars? In which case SecondMarket (but not Greyscale) would still buy and sell bitcoins on the exchanges?

Well, presumably any Authorized Participant which has signed a Participant Agreement can create new shares, and the Authorized Participants might change from time to time. I don't know how to find out who the current Authorized Participants are, so sure, SecondMarket may or may not be an Authorized Participant at this point in time.

AIUI no one can redeem shares atm. They had to suspend redemption because of a technicality in the SEC rules - I think it's because you're not allowed to be simultaneously offering new shares and at the same time offering to redeem old shares.

JorgeStolfi

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Quote from: Roy Badami on March 26, 2015, 03:22:01 PM

Bottom of p32 of the Interim Financial Statement (linked from http://www.otcmarkets.com/stock/GBTC/filings ) says

Quote

As of the date of this Disclosure Statement, SecondMarket, Inc. has signed a Participant Agreement with the Sponsor and the Trust and may create and redeem Baskets.

So, do you understand that as meaning that SecondMarket can still sell and (perhaps) redeem shares to investors using dollars? In which case SecondMarket (but not Greyscale) would still buy and sell bitcoins on the exchanges?

Roy Badami

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Quote from: JorgeStolfi on March 26, 2015, 03:06:38 PM

Quote from: David Rabahy on March 26, 2015, 01:50:49 PM

The company that runs BIT buys the bitcoins; investors do not. Investors buy shares of BIT. [ ... ] Personally I bought into BIT with Roth IRA monies

That was the case before last October. But now the procedures seem to have changed considerably. The company that manages the fund is now (?) Grayscale, and shares are traded through a hierarchy of brokers. From their financial report and filing dated 2014-09-30, pg. 31+, I understand that SecondMarket and Grayscale no longer take dollars and no longer buy or sell bitcoins. I understand that brokers must buy shares from Grayscale with bitcoins only, and when they redeem they will get bitcoins from Grayscale. Am I reading wrong?

Bottom of p32 of the Interim Financial Report (linked from http://www.otcmarkets.com/stock/GBTC/filings ) says

Quote

As of the date of this Disclosure Statement, SecondMarket, Inc. has signed a Participant Agreement with the Sponsor and the Trust and may create and redeem Baskets.

JorgeStolfi

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Quote from: bobabouey2 on March 26, 2015, 02:47:03 PM

I think the $199.5 bid at 1 just proved my point, or its someone who doesn't realize the fund is 1/10 of bitcoin!

Perhaps those bids are just the 2nd level brokers testing the system, and the bids are not being filled because those brokers have nothing to sell yet?

JorgeStolfi

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Quote from: David Rabahy on March 26, 2015, 01:50:49 PM

The company that runs BIT buys the bitcoins; investors do not. Investors buy shares of BIT. [ ... ] Personally I bought into BIT with Roth IRA monies

That was the case before last October. But now the procedures seem to have changed considerably. The company that manages the fund is now (?) Grayscale, and shares are traded through a hierarchy of brokers. From their financial report and filing dated 2014-09-30, pg. 31+, I understand that SecondMarket and Grayscale no longer take dollars and no longer buy or sell bitcoins. I understand that brokers must buy shares from Grayscale with bitcoins only, and when they redeem they will get bitcoins from Grayscale. Am I reading wrong?

Topic: GBTC Bitcoin Investment Trust Observer - page 52. (Read 262371 times)