Winklevoss Twins File to Launch Bitcoin Exchange-Traded Product - page 8.

chufchuf

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Quote from: phoenix1 on July 01, 2013, 09:15:38 PM

Looks like they are selling out. It's going to raise a lot of new regulatory issues as it would be a BTC tracking product that falls under the SEC jurisdiction. That is a whole new territory. The NAV of the trust would be based on non SEC regulated exchange prices ( Gox, Bitstamp ect). Things start to get blurred very quickly

They even mention this :

Quote

(Termination events include) ...

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;

I dont think this IPO will be approved overnight ...

They are effectively receiving USD from clients in exchange for a BTC tracker ... is that money transmitting ? Sounds pretty close to me.

deathandtaxes says they'd get exemption for brokerages

https://bitcointalksearch.org/topic/m.2631106

DeathAndTaxes

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Gerald Davis

Quote from: massivebitman on July 01, 2013, 10:13:29 PM

After all it's effectively stating that the opening price of BTC is $100.45 no?

This could be a sneaky way to cap the price while they buy up more BTC

No. The s-1 indicates the quoted price used was solely for the purpose of paying the registration fee. If approved by regulators and an exchange shares will be priced at the current exchange rate at the time of the IPO. The S-1 doesn't obligate them to any price. They could sell pre-IPO baskets of shares at a price of $18.23 or $23.81 per share if necessary. Baskets will be bought by institutional investors. They aren't going to pay a huge premium to the underlying asset.

This isn't unusual, pre IPO generally one doesn't know the exact price the shares will be issued at. That is the purpose of the pre-ipo. Pre-IPO investors deliver a deposit held in an escrow account to cover the likely issuing price. So 50,000 shares * $20 ea = $1M. XYZ Capital wires $1M USD. The actual share price ends up being $18.23. XYZ Capital gets their 50,000 shares plus $88,500 from the deposit is returned.

massivebitman

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You've got to wonder if this news is positive or not...

On the one hand looks like they are selling their BTC.

On the other hand, they are making it fucking easy for the mega whales, hedge funds etc... To take a bite of the BTC pie.

If I ran a managed fund with a high risk profile, why not put a percent or two into this bitcoin thing.

My thoughts... If it goes ahead, there will be a spike in price.

My other thought is, until we know if it's going ahead maybe it'll work as an artificial cap on the BTC price.

After all it's effectively stating that the opening price of BTC is $100.45 no?

This could be a sneaky way to cap the price while they buy up more BTC

ArticMine

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Monero Core Team

Quote from: DeathAndTaxes on July 01, 2013, 09:47:29 PM

Quote from: atomium on July 01, 2013, 07:06:37 PM

What do you guys think this will do to the price? They are issuing "paper" bitcoins based on their shares

http://blogs.wsj.com/moneybeat/2013/07/01/winklevoss-twins-file-to-launch-bitcoin-exchange-traded-product/

They aren't issuing "paper Bitcoins" in the sense that they aren't backed by anything. The trust will hold Bitcoins and issue shares to represent those. Each share is worth 0.2 BTC and the trust will hold 0.2 BTC for each share outstanding. The trust can't issue shares to represent more then BTC it actually has. If hypothetically the fund was very popular and the fund wanted to issue more shares they are required to obtain 10K BTC (50K shares) before adding 50K new shares for trading.

Yes that is my understanding. Each share will correspond initially to 0.2 BTC and then diminish by the amount of the Trust's expenses including the sponsor fee, and other expenses. So the BTC value over time of each will drop to cover the expenses of the trust.

inbox

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Quote from: atomium on July 01, 2013, 07:09:29 PM

here is their company,

http://winklevosscapital.com/

Looks like they have 4 investments so far, half of which are bitcoin related.

The quote on their homepage is exact copy of:

About — I/O Capital Partners
iocap.net/about/‎
"We partner with a select number of early stage companies to provide not just investment, but a full service approach to driving growth."

humanitee

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Quote from: phoenix1 on July 01, 2013, 09:36:00 PM

Quote from: humanitee on July 01, 2013, 09:32:56 PM

Quote from: phoenix1 on July 01, 2013, 09:30:06 PM

And your opinion is ?

Looks to me like they are using their Bitcoin capital to open a Bitcoin business.

'Selling out' was perhaps the wrong phrase ... I meant to infer that they were raising cash against their existing BTC as opposed to buying in the market with funds raised and issuing a tracker against those BTC . For what purpose I have no idea ... could very well be to fund BTC businesses.

From my understanding the amount of shares can scale based on demand. If they sell out they will go to the market and buy more, thus raising the price. They can't issue more paper than there are Bitcoin - it's easy to know how many are in existence. This is the easiest way I've seen for large investors to get money into Bitcoin. Hell, at the rate things are going it might be the only way to get money into Bitcoin Tongue

.

DeathAndTaxes

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Gerald Davis

Quote from: atomium on July 01, 2013, 07:06:37 PM

What do you guys think this will do to the price? They are issuing "paper" bitcoins based on their shares

http://blogs.wsj.com/moneybeat/2013/07/01/winklevoss-twins-file-to-launch-bitcoin-exchange-traded-product/

They aren't issuing "paper Bitcoins" in the sense that they aren't backed by anything. The trust will hold Bitcoins and issue shares to represent those. Each share is worth 0.2 BTC and the trust will hold 0.2 BTC for each share outstanding. The trust can't issue shares to represent more then BTC it actually has. If hypothetically the fund was very popular and the fund wanted to issue more shares they are required to obtain 10K BTC (50K shares) before adding 50K new shares for trading.

ArticMine

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Monero Core Team

This is going to be very interesting to watch. Just the speculation on whether or not the SEC will approve this as it goes back and forth will cause the the BTC/USD exchange rate to move about all over the place creating all sorts of opportunities for both profit and loss.

If it does get approved then the real fun will begin. With the opportunity to "short" the paper Bitcoin, trading BTC from your brokerage account and the Wall Street players getting into the act. Buying the units low and then pumping them to their retail investors a la Facebook maybe? If this does get approved and once the dust settles this can actually be bullish for Bitcoin.

phoenix1

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Quote from: humanitee on July 01, 2013, 09:32:56 PM

Quote from: phoenix1 on July 01, 2013, 09:30:06 PM

And your opinion is ?

Looks to me like they are using their Bitcoin capital to open a Bitcoin business.

'Selling out' was perhaps the wrong phrase ... I meant to infer that they were raising cash against their existing BTC as opposed to buying in the market with funds raised and issuing a tracker against those BTC . For what purpose I have no idea ... could very well be to fund BTC businesses.
Regardless, they are effectively cashing out their BTC whatever way you look at it ...

atomium

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Study the past, if you would divine the future.

Quote from: humanitee on July 01, 2013, 09:32:56 PM

Quote from: phoenix1 on July 01, 2013, 09:30:06 PM

And your opinion is ?

Looks to me like they are using their Bitcoin capital to open a Bitcoin business.

the idea is to help fund bitcoin startups, they have done so with bitinstant, not sure who else they have funded besides them.

humanitee

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Quote from: phoenix1 on July 01, 2013, 09:30:06 PM

And your opinion is ?

Looks to me like they are using their Bitcoin capital to open a Bitcoin business.

phoenix1

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Quote from: humanitee on July 01, 2013, 09:28:24 PM

Quote from: phoenix1 on July 01, 2013, 09:24:18 PM

Just expressing my opinion ... feel free to express you own if you have one
Have you even bothered to look at the filing ?

Of course.

And your opinion is ?

humanitee

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Quote from: phoenix1 on July 01, 2013, 09:24:18 PM

Just expressing my opinion ... feel free to express you own if you have one
Have you even bothered to look at the filing ?

Of course.

chufchuf

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Quote from: N12 on July 01, 2013, 07:07:49 PM

They are selling 200k BTC. Wonder where they got the other 100k.

Typical bear reaction:

Oh noes no liquidity at MtGox, BTC is heading for 0!

Oh noes there's liquidity now but that's only because floodgates open everyone can buy BTC because the Winklevosses are dumping so BTC is going to 0 even though the Fund has to keep buying BTC the more people invest in it but I'm still making sense!

phoenix1

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Quote from: humanitee on July 01, 2013, 09:20:37 PM

Quote from: phoenix1 on July 01, 2013, 09:15:38 PM

Looks like they are selling out. It's going to raise a lot of new regulatory issues as it would be a BTC tracking product that falls under the SEC jurisdiction. That is a whole new territory. The NAV of the trust would be based on non SEC regulated exchange prices ( Gox, Bitstamp ect). Things start to get blurred very quickly

They even mention this :

Quote

(Termination events include) ...

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;

I dont think this IPO will be approved overnight ...

They are effectively receiving USD from clients in exchange for a BTC tracker ... is that money transmitting ? Sounds pretty close to me.

I'll take FUD for $500, Alex.

Just expressing my opinion ... feel free to express you own if you have one
Have you even bothered to look at the filing ?

humanitee

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Activity: 1302

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Quote from: phoenix1 on July 01, 2013, 09:15:38 PM

Looks like they are selling out. It's going to raise a lot of new regulatory issues as it would be a BTC tracking product that falls under the SEC jurisdiction. That is a whole new territory. The NAV of the trust would be based on non SEC regulated exchange prices ( Gox, Bitstamp ect). Things start to get blurred very quickly

They even mention this :

Quote

(Termination events include) ...

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;

I dont think this IPO will be approved overnight ...

They are effectively receiving USD from clients in exchange for a BTC tracker ... is that money transmitting ? Sounds pretty close to me.

I'll take FUD for $500, Alex.

phoenix1

hero member

Activity: 798

Merit: 1000

Looks like they are selling out. It's going to raise a lot of new regulatory issues as it would be a BTC tracking product that falls under the SEC jurisdiction. That is a whole new territory. The NAV of the trust would be based on non SEC regulated exchange prices ( Gox, Bitstamp ect). Things start to get blurred very quickly

They even mention this :

Quote

(Termination events include) ...

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;

I dont think this IPO will be approved overnight ...

They are effectively receiving USD from clients in exchange for a BTC tracker ... is that money transmitting ? Sounds pretty close to me.

myself

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chaos is fun...…damental :)

making money from 9 to 5 time to sleep and have fun .... i trade that paper anytime

atomium

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Study the past, if you would divine the future.

I agree with this point, but maybe they are doing it for the good of bitcoin, raise more capital to fund more bitcoin startups.

http://techcrunch.com/2013/07/01/cameron-and-tyler-winklevoss-file-for-20-million-ipo-of-their-bitcoin-trust/

Rampion

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They are actually selling worthless toilet paper. With that kind of derivative products, which border line the outright scam, the big investment banks have been manipulating the price of gold and silver for years. It looks like we have two new wannabe market maker on the block.

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