Quick question here, maybe a little off topic but ok.
Investing in bitcoin related securities (like ASICminer), isn't this extremely dangerous as those shares are coupled to the fluctuations of the BTC price? For example, you buy 10 asicminer shares at 5 btc each. Next, USD price of bitcoin plummets 50% or so. However, asicminer share price stays stable at 5 btc. Now, when you try to cash out your shares to btc and back to USD, you would have lost half your investment. So you got 2 dangerous factors that could fuck you over, either the btc price crashes or the share price itself crashes... It's just too much for me, i'll stick to btc trading :p
Investing in bitcoin related securities (like ASICminer), isn't this extremely dangerous as those shares are coupled to the fluctuations of the BTC price? For example, you buy 10 asicminer shares at 5 btc each. Next, USD price of bitcoin plummets 50% or so. However, asicminer share price stays stable at 5 btc. Now, when you try to cash out your shares to btc and back to USD, you would have lost half your investment. So you got 2 dangerous factors that could fuck you over, either the btc price crashes or the share price itself crashes... It's just too much for me, i'll stick to btc trading :p
My thinking was that ASICminer is valued at X$, so if bitcoin goes up or down the share price would naturally move to reflect that X$ valuation.
and so i used this investment vehicle as a hedge against the volatility of bitcoin, it's too early to say if this will actually work like that in practice, in any case, i'm glad i bought some!
Yup, pretty much this. During the last move down to of BTC to 68, AM went from 3.5 to +5. It has since corrected back, with a little premium left in, probably accounted for by more people using it as a hedge.
Nowhere is it written in stone that this behavior will continue forever though. Maybe another asset takes it's place next time.
