Topic: Winklevoss Bitcoin Trust on Bloomberg - page 6. (Read 10995 times)

They will buy more of the underlining commodity. That is how an ETF works.

lol

Explain yourself or just look stupid for us.

I dont follow. If the trust is cancelled everyone gets refunded [lets just make it simple] anll their gains are from fees. Now, the market price should not have been changed because of the ETF because all it does is reduce demand on the exchanges... but increases interest. So, if it closes, maybe the price drops. Now where did they offload the coins?
Yeah... thats what I see. But its basically ask walls that have a ton of investors throwing money at it rather than a few people with money on exchanges. What happens when the shares are out?




Doesnt it make more sense that they have, lets say, 100k coins. They market sell all of them to people, and with this money buy.. 80k more? And then sell them.. rinse and repeat.

Seems bullish.

lol noobs

If you are going with the RIDICULOUS assertion that they are doing this to dump their coins you are bat***t crazy.

These guys are worth 64 million+. They have invested $2 million into bitcoin. They are creating a ETF to profit and spread accessibility to the BTC marketplace.

End. Of. Story.

Winklevoss are selling their coins in the form of shares. they stand to gain from fees and the selling of the shares.
These ETFs can be viewed as HUGE ask walls that constantly move with price.

No, as more $$ comes in they have to buy more BTC to fill more "baskets."

Yup. They hold the underlying in a secure wallet and sell out 'shares' of ETFs. The advantage is that funds that have specific mandates can invest in Bitcoin indirectly - you can't have a pension fund manager buy Bitcoin with his client's funds but she can buy a Bitcoin ETF.

In other words of some other words, its the way they can dump their coins without crashing the market.

So basically even if every single "share" of their bitcoin was bought, not a single coin would be bought on the market? All the Winklevoss gains are from fees?

Actually, the shares can act as sort of an exchange. If money comes in those shares can start to be worth more than the current rate of BTC and thus potentially drive the price of BTC upwards. I believe this has happened with some of the larger precious metal ETFs.

I think its more like you're buying a share in Winklevoss's 1% stake in bitcoin.
the Winklevoss hold the bitcoin, and say that these shares are as good as the real thing, and poeple trade the shares not the bitcoins.
poeple believe that these shares are as good as the real thing, so in theory they will follow BTC price very closely.


can you actually get BTC out of this trust?
no i would think not. $ in $ out.

so why do poeple believe its as good as the real thing?
idk!

There are no tax free cashouts in an ETF. No anonymity.

This means that if this fund is SEC approved, the bitcoin market will quadruple in less than a month.  The market will hit several billion dollars of worth.  BTC prices will sky rocket.

How is the SEC going to regulate earnings, fraud, and tax free cashouts, etc?

I do not have much experience with these type of documents but I find it interesting the following language in the proposal. I do not think this is typical verbage on most ETF applications, although I could be wrong. It seems to spell some of the future obstacles for Bitcoin in the U.S.

But it also shows you what it may mean if an ETF is approved and remains alive going forward:

    The Trustee will terminate and liquidate the Trust if one of the following events occurs:

•      the Trustee is notified that the Shares are delisted from the [EXCHANGE] and are not approved for listing on another national securities exchange within five business days of their delisting;

•      Shareholders acting in respect of at least 75 percent of the outstanding Shares notify the Trustee that they elect to terminate the Trust;

•     60 days have elapsed since the Trustee notified the Sponsor of the Trustee’s election to resign and a successor trustee has not been appointed and accepted its appointment

•    the SEC determines that the Trust is an investment company under the Investment Company Act of 1940 and the Trustee has actual knowledge of that determination;

•     the CFTC determines that the Trust is a commodity pool under the Commodity Exchange Act of 1936, as amended (“CEA”), and the Trustee receives notice from the Sponsor that, because of that determination, termination of the Trust is advisable;

•     the Trust is determined to be a “money transmitter” under the regulations promulgated by FinCEN under the authority of the US Bank Secrecy Act and is required to comply with certain FinCEN regulations thereunder, and the Trust receives notice from the Sponsor that, because of that determination, termination of the Trust is advisable;


•     the Trust fails to qualify for treatment, or ceases to be treated, as a grantor trust for US federal income tax purposes, and the Trustee receives notice from the Sponsor that the Sponsor determines that, because of that tax treatment or change in tax treatment, termination of the Trust is advisable;

•     a United States regulator requires the Trust to shut down or forces the Trust to liquidate its Bitcoins;

•     the aggregate market capitalization of the Trust, based on the closing price of the Shares, was less than $[    ] million (as adjusted for inflation by reference to the US Consumer Price Index) at any time after the first anniversary of the Trust’s formation and the Trustee receives, within six months after the last trading date on which the aggregate market capitalization of the Trust was less than $[    ] million, notice from the Sponsor of its decision to terminate the Trust;
   
•     60 days have elapsed since DTC ceases to act as depository with respect to the Shares and the Sponsor has not identified another depository that is willing to act in such capacity; or

•     the Trustee elects to terminate the Trust after the Sponsor is conclusively deemed to have resigned effective immediately as a result of the Sponsor being adjudged bankrupt or insolvent, or a receiver of the Sponsor or of its property being appointed, or a trustee or liquidator or any public officer taking charge or control of the Sponsor or of its property or affairs for the purpose of rehabilitation, conservation or liquidation.

 [/i]

So basically you are buying futures in bitcoin when you buy this stock? I don't understand how this works.

Here's a copy of the filing.

http://www.sec.gov/Archives/edgar/data/1579346/000119312513393903/d562329ds1a.htm