Topic: GBTC Bitcoin Investment Trust Observer - page 60. (Read 262371 times)
I think the buying/selling is much stronger linked to the market cycles: major buys at the beginning of rallies (further fueling them), major sells before total breakdown, little movement in between. #justanopinion
+1
Big money has been told to get in and sit tight.
Quote
"We're three to six months away from Wall Street dollars moving into Bitcoin in a big way," he says.
What's Silbert saying now?
https://twitter.com/barrysilbert/status/551533923663355904
https://twitter.com/barrysilbert/status/551539703674318849
I think the buying/selling is much stronger linked to the market cycles: major buys at the beginning of rallies (further fueling them), major sells before total breakdown, little movement in between. #justanopinion
+1
Big money has been told to get in and sit tight.
Lol, he's unknowingly protecting people from their own stupidity.
Objectively, the clients who bought the first ~400'000 shares before 2013-11-07 were smart, those who bought the other 950'000 shares after that were stupid.
If those clients had been able to liquidate on 2014-10-28, the smart clients would have been smarter, some of those stupid clients would have been smart, and the rest would have been less stupid. As it is now, all clients must resign themselves to become stupider every day, and only pray that some day things will change so that they may become smarter again.
oda, I realize they came after, but it's possible that investors aren't aware of this restriction. If SecondMarket had informed about this, wouldn't we have heard confirmation sooner?
So, it will be interesting to see if there is a change now that the information is disseminating into the public.
So, it will be interesting to see if there is a change now that the information is disseminating into the public.
I suspect that whoever is willing to put his (real
) money into something as speculative - potentially profitable, but extremely speculative - as Bitcoin is also willing to jump through the hoops to liquidate his position again.I think the buying/selling is much stronger linked to the market cycles: major buys at the beginning of rallies (further fueling them), major sells before total breakdown, little movement in between. #justanopinion
oda, I realize they came after, but it's possible that investors aren't aware of this restriction. If SecondMarket had informed about this, wouldn't we have heard confirmation sooner?
So, it will be interesting to see if there is a change now that the information is disseminating into the public.
So, it will be interesting to see if there is a change now that the information is disseminating into the public.
Thanks for the explanation. I thought I saw a link to Silberts tweet earlier on r/button saying something to the affect that the drop was "entertaining". I suppose the trust makes money on fees so he could care less if his client eats the losses. They can't even withdraw their money now til it's on OTCQX??
https://twitter.com/barrysilbert/status/551533923663355904
https://twitter.com/barrysilbert/status/551553942745006080
He tweeted on Jan 2 that the fund was $42.35M. That's when price was around $315. Lost $4.7M in less than 2 days. Man it sucks to be investing in that fund w no way to close the position.
Lol, he's unknowingly protecting people from their own stupidity.
No one has denied it for the simple reason it is true. 
True til proven FUD IMO for this reason. For what reason did they suspend redemption? Were they forced to? Because I'm sure their investors aren't too happy about this. With this sort of condition, who will buy more BTC at this fund?
Thanks for the explanation. I thought I saw a link to Silberts tweet earlier on r/button saying something to the affect that the drop was "entertaining". I suppose the trust makes money on fees so he could care less if his client eats the losses. They can't even withdraw their money now til it's on OTCQX??
https://twitter.com/barrysilbert/status/551533923663355904
https://twitter.com/barrysilbert/status/551553942745006080
He tweeted on Jan 2 that the fund was $42.35M. That's when price was around $315. Lost $4.7M in less than 2 days. Man it sucks to be investing in that fund w no way to close the position.
Thanks for the explanation. I thought I saw a link to Silberts tweet earlier on r/button saying something to the affect that the drop was "entertaining". I suppose the trust makes money on fees so he could care less if his client eats the losses. They can't even withdraw their money now til it's on OTCQX??
https://twitter.com/barrysilbert/status/551533923663355904
https://twitter.com/barrysilbert/status/551553942745006080
Then I guess it becomes a close end fund instead of traditional fund - people who wants to cash out needs to sell it on secondary market
If you mean by "close end fund" that they cannot take $$$ to create new BIT shares, you'd be (i'm 98% sure) incorrect.OTCQX is a higher-class version of "pink sheets", with some very big, solid companies.
---------------------------------------
Situation by 01/Sep/2013
* Whales had 135 k BTC that cost them next to nothing
* Fund had nothing
* Clients had 67.5 M $
---------------------------------------
Happened since then:
* Clients bought 1.35 M shares from fund at average price of 50 $/share (say)
* Fund bought 135 k BTC from whales, at average price of 500 $/BTC (say)
----------------------------------------
Situation today:
* Whales have 67.5 M $, no BTC
* Fund has 135 kBTC worth 37.8 M $ today
* Clients have 1.35 M shares of fund, nominal value 37.8 M $ today
---------------------------------------
The number 500 $/BTC for the average buying price of the 135 k BTC is guessed, but could be easily computed from the buy dates and amounts, and a price table.
The 67.5 M $ that the clients put into the fund will never come out again. They became the net and definitive profit of the Whales.
If the fund does not allow redemption anymore, the only hope of the clients to get their money back is that the BTC price will recover and they will be able to sell their shares to other clients, and so on. So the clients will be passing the 67.5 M$ loss to each other forever. Sort of like this:
http://www.ic.unicamp.br/~stolfi/bitcoin/2014-02-17-HowToMakeSomeEasyMoney.html
Thanks for the explanation. I thought I saw a link to Silberts tweet earlier on r/button saying something to the affect that the drop was "entertaining". I suppose the trust makes money on fees so he could care less if his client eats the losses. They can't even withdraw their money now til it's on OTCQX??
Then I guess it becomes a close end fund instead of traditional fund - people who wants to cash out needs to sell it on secondary market
If you mean by "close end fund" that they cannot take $$$ to create new BIT shares, you'd be (i'm 98% sure) incorrect.OTCQX is a higher-class version of "pink sheets", with some very big, solid companies.
---------------------------------------
Situation by 01/Sep/2013
* Whales had 135 k BTC that cost them next to nothing
* Fund had nothing
* Clients had 67.5 M $
---------------------------------------
Happened since then:
* Clients bought 1.35 M shares from fund at average price of 50 $/share (say)
* Fund bought 135 k BTC from whales, at average price of 500 $/BTC (say)
----------------------------------------
Situation today:
* Whales have 67.5 M $, no BTC
* Fund has 135 kBTC worth 37.8 M $ today
* Clients have 1.35 M shares of fund, nominal value 37.8 M $ today
---------------------------------------
The number 500 $/BTC for the average buying price of the 135 k BTC is guessed, but could be easily computed from the buy dates and amounts, and a price table.
The 67.5 M $ that the clients put into the fund will never come out again. They became the net and definitive profit of the Whales.
If the fund does not allow redemption anymore, the only hope of the clients to get their money back is that the BTC price will recover and they will be able to sell their shares to other clients, and so on. So the clients will be passing the 67.5 M$ loss to each other forever. Sort of like this:
http://www.ic.unicamp.br/~stolfi/bitcoin/2014-02-17-HowToMakeSomeEasyMoney.html
Then I guess it becomes a close end fund instead of traditional fund - people who wants to cash out needs to sell it on secondary market
If you mean by "close end fund" that they cannot take $$$ to create new BIT shares, you'd be (i'm 98% sure) incorrect.
I guess that he means that there will be no more liquidations (redemptions): the only way to get $$$ out will be to sell your shares at OTCQX to someone who would rather buy them instead of BTC.
Pink sheets huh? Bitcoin has become exactly like a penny stock.
Then I guess it becomes a close end fund instead of traditional fund - people who wants to cash out needs to sell it on secondary market
If you mean by "close end fund" that they cannot take $$$ to create new BIT shares, you'd be (i'm 98% sure) incorrect.
I guess that he means that there will be no more liquidations (redemptions): the only way to get $$$ out will be to sell your shares at OTCQX to someone who would rather buy them instead of BTC.
And the significant inputs that we have seen since then appear to come from just one entity.
How exactly can you tell that the recent purchases in the BIT were from the same entity? I ask because I'd like to have use of that crystal ball.
It is only a guess, because there were 4 consecutive purchases with nearly the same amount (6300 -- 7000 BTC), then a buy of ~500 BTC, and nothing in the preceding and following weeks.
Then I guess it becomes a close end fund instead of traditional fund - people who wants to cash out needs to sell it on secondary market
If you mean by "close end fund" that they cannot take $$$ to create new BIT shares, you'd be (i'm 98% sure) incorrect.
Then I guess it becomes a close end fund instead of traditional fund - people who wants to cash out needs to sell it on secondary market
Okay can someone translate that for people not entirely familiar with that?
Sure. I'd be happy to help.
Is that just some sort of conversion of the fund to being able to withdrawn in another way or what is going on? Does this mean everything is working as expected and there's to forced stop of withdrawals?
OTCQX is the largest "over the counter" market for trading securities.
When the BIT transfers to OTCQX, anyone with a brokerage account will be able to purchase shares of the BIT. Current account holders will also be able to sell the shares on the open market.
The main point is that the flood gates of institutional / brokerage investors will be opened.
Jump to: