Topic: $GBTC Speculation, Information, and Cogitation - page 5. (Read 11792 times)

Speculating about a positive possible outcome:

We are two steps away from the market revaluating to include ~135,000 BTC of buying pressure.
(They track this in the BIT thread, a great synergy thread to the $GBTC: https://bitcointalksearch.org/topic/gbtc-bitcoin-investment-trust-observer-337486 )

Provided we:
1. Demonstrate growing demand for coins offered from BIT holders (Bid volume stays flat or grows).
2. See evidence of a BIT seller using proceeds to reinvest in the cycle (large, new BIT purchases).

This would complete the loop, the market will have evidence of the full cycle.
The trust functions as a microcosm of what Bitcoin's effect stands to be on a global scale.

Investors profit. Profits are reinvested to grow the fund and create future profits.
There is a race effect, a motivation for current holders to sell first (high demand and premiums), and also a race effect to rebuy.

An example.
We see 5,000 BTC get sold (50,000 shares GBTC released).
A few days later BIT purchases 8,500 shares on market (the market coins were cheaper, fees paid, etc)
Market price goes up $5.

We now have a few extrapolations. 8500 shares / 135000 shares = 1/20th effect. If market volume remained constant, a $5 increase represents 1/20 of movement.
Revaluated net effect of GBTC current holder cycling and rebuying, $100.

But what happens then?
The larger market will get to decide. If it rejects that valuation, volume will fill in on the Ask sides, and the same $ generated from the BIT->GBTC sales will move the price up less.
Conversely, revaluated contracts and a 'race to get cheap coins' could cause a swift revaluation upwards.

When thinking about the likelihood of this, one big question that comes to mind is - will current BIT profiteers reinvest? First thought says yes, who wouldn't sign up for another year when you just netted a 100% premium for your coins?  But the window of opportunity is closing. Next year it is very unlikely (IMHO) that $GBTC will be the only investment option.  To keep it simple, let's just say COIN is the only other emergent fund.

You're not likely to get a premium in this way, investing in COIN. I speculated earlier that I expect GBTC and COIN prices to end up close to each other and close to Bitcoin prices. However, that is not to say that each won't carry a premium.

Remember, in each case you are buying a stock for the future performance of that fund.
Once it is demonstrated that a profiting fund allows that fund to buy more coins, thus increasing the value of that fund...the same principle will apply to GBTC and COIN.
People will be willing to pay more today because of the expectation. The purchase of the stock includes the purchase of its future actions.

An ongoing thought in progress. I wanted to share for rejection/refinement/general knowledge sharing.

We're used to planning for future selloffs (auctions).
It's novel to think through how a market will valuate a future buy-in.

I'm not talking about myself. I'm talking about people who have $200K in retirement acct, they can not yet withdraw.

Or you buy 20 BTC now and when it reaches 50k you gtfo of the U.S.

I'm talking about Roth IRA accounts. You pay 0% on the profits. Let's say you got 1 BTC @ $500 in a Roth IRA acct, and 10 years from now you sell it for $50500. That's $50K profit with 0% tax. Now let's say instead you bought 2 BTC and in 10 years you realize $100K profit. Now you pay 9% California tax + 38% Federal tax + medicare, etc. - roughly 50% in tax. You get only $50K in actual profit. At the end - it's the same thing. So up to double the price, people in a tax free retirement accounts can afford to buy.

Disclaimer: This is just an opinion, I'm not a financial or a tax expert, so consult one before making decisions.

This is a moot point anyway as you can buy more than 2 bitcoins for one "GBTC" bitcoin and come ahead even in a taxed account as long as your taxes are less than 50%.
In addition, most retirement accounts are tax-deferred, not untaxable (except Roth where you are taxed ufront).

Then we had to see these premiums on other funds too, like commodity or currency ETFs. E.g. I can put GLD easily into a tax shielded account, but not gold bullion. Nonetheless there is no premium on GLD.

Maybe Richy_T would be willing to post a GBTC version of his output to this thread. I don't know if an available data stream for $GBTC is in the same format as what he's currently parsing or receiving from.
Might be worth pursuing. 

I appreciate Sitarow posting the book from time to time.

Instead of renaming the thread just construct a wall observer. That would be useful.

Maxim Group LLC is asking 200000  per share 

https://i.gyazo.com/763f795870db7d35248736b173a6981a.png

2nd rename suggestion.
The intent was a parallel but specialized speculation/analysis/theorizing/watching thread specific to GBTC, and speculated interactions with the BTC market.

Throw out some suggestions (all).  I'd say I'm all ears but there was a most excellent burn in masterluc's thread the other day that I don't want repeated in my direction :-)

The answer to this question is simple.  The only advantage in buying this fund over buying BTC straight is the ability to purchase in your tax shielded accounts.  Therefore, the logical explanation is that people are paying a premium to get exposure to tax free BTC gains.  If you believe the price is headed to $10,000, you would much rather purchase at $500 without tax liabilities than to purchase at $250 with tax liabilities.  That is the only logical explanation for the premium we are seeing.

don't you need a wall observer to have a wall observer thread? 

I first worried about this as a looming negative over the weekend. I think that was a nervous over-reaction.  CSTI's bid shows an intent to buy at least 4k more at the same 50.00 rate that 4,000 new shares entered the market at today.
My read - "Don't worry Maxim - we'll be here buying again at Monday. At $50. Not $49."


I posted the only logical theories I can think above a few posts above.
Simplified, I postulate we will find GBTC equilibrium at the same price that COIN becomes available.


I think this will be general market sentiment. Once COIN is available, it will be more desirable. At that point, GBTC purchases will track with it, for when it falls below, it will be an arbitrage opportunity.

A nice day of trading. Nice to see real volume, a true middlepoint hit, and a first fight for which side will pull the other.

Remember there are two camps of shares. Once sold, they become more liquid. I expect volume to ramp week to week as this liquid portion increases.

4k ASK at 50

So, I have a Roth IRA account where I could sell Visa https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1431117137729&chddm=127346&chls=IntervalBasedLine&q=NYSE:V&ntsp=0 which has done very well for me since 1/21/2014 (time to take profits; nothing goes up forever) and use the proceeds to purchase GBTC right away (avoiding the headache/delay of purchasing BIT shares at NAV).  In my mind Visa was a hedge against my Bitcoin investments and it isn't clear to me yet that it is time to go all in (or rather just more in) for Bitcoin.

*If only* I could purchase BTC (as opposed to GBTC) within my Roth IRA account.  Perhaps I should renew my efforts to figure out one of those "checkbook IRA" deals, e.g. http://www.broadfinancial.com/self-directed/self-directed-ira-16.

Btw, I felt it was wrong to use Western Union https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1431117318203&chddm=496179&chls=IntervalBasedLine&q=NYSE:WU&ntsp=0 as a hedge.

I know one thing, if I was a year long holder of GBTC and underwater, I would happily dump my GBTC at a value of $500.00 and then take that profit to the exchange and double you bitcoin exposure.  This is possibly the reason for the spot price rally today.

Could be the reason for future rallies too.

Bottom line, ETF's are going to be great for bitcoin.  

Why is this same question asked every day?

Why would one buy a BTC for $490, when the price on US-regulated exchanges is $244?

New ask

CSTI   50.00   2000   15:45


* Correction make that 4000

Yep, good thread Chainsaw. It's fun to observe and speculate in a comprehensive fashion when the environment isn't  overflowing w/ troll nonsense.