So let's speculate, will price be affected? by how much? and why?
There is demand for leverage such that today someone wanting to buy a bitcoin using leverage has to pay a price that is 10% over the current spot price and still has to wait nearly 90 days to get delivery. See the BUZ3 (December 16, 2013 settlement) futures contract on ICBIT as an example:
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https://icbit.seThe only thing needed to profit from this is a supply of bitcoins that you can "lock up" for 90 days. Oh, look .... the fine print for BIT says your funds might get locked up on you:
An investment in the BIT will be illiquid and there may be significant restrictions on transferring interests in the BIT.
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https://www.secondmarket.com/fund/bitcoin-investment-trustSo Bitcoin is just like any other commodity or security in that there are derivative products and profit exists. Seeing more funds emerge will help Bitcoin because it will help the commodity be used to solve problems more efficiently or used in new ways. While it would seem this increased usage of bitcoins would only put upward pressure on the exchange rate, don't forget that providing liquidity for that wanting to go short on Bitcoin is likely one of the possibility a fund like BIT brings as well.
Yes, this is so. It opens the possibility of some large financial interest, or even a bank or central bank with arguable legislative approval (and who's function is to manipulate currencies) can take large short positions covered only by their ability to print money. This is limited to SecondMarket's ability to lend bitcoins for sale, but as you point out it may be "illiquid" which means that they don't guarantee that there are any buyers if you want to sell shares, or that there are any sellers if you want to buy, except themselves.
It doesn't pass Coindesk's test for setting price for their index.
My speculation on the effects (not on the market in general, just BIT's effect on the market) is:
Short term bear (the funds to buy the starting btc are spent, some who would have bought in the market exchanges in the near term will buy BIT instead.)
Long term Bull (as the potential for bigger money and new avenues of money may be invested, SecondMarket may need to start buying again)
