Here comes SecondMarket’s new Bitcoin fund: but is it a
Here comes SecondMarket’s new Bitcoin fund: but is it a
Bitcoin ETFs are Coming
SecondMarket Will Open Up Private Bitcoin Fund to All
SEC Approves Bitcoin Futures Fund | Regulation Bitcoin News
First Bitcoin ETF to launch in Canada - Bitcoinist.com
Why I believe we're on the cusp of the 3rd great Bitcoin bubble
We've recovered from the last crash You might think it's a bit early (based on the time frame for the last recovery), but things are looking a lot different than in 2011. I would suggest its because the last bubble popped prematurely due to Mt. Gox's failure of a trading engine. Interest in buying Bitcoins has gone up to its highest point since the last bubble. There's a similar spike in general interest. Partly helped along by the Silk Road news. The network is being used at the same rate as during the last bubble. The Bitcoin ATM story (see below) is causing Bitcoin to trend in Canada on Google (was #1 for a bit). The $27 story (see below) will almost certainly cause a large spike worldwide in Google trends once they're updated up to yesterday. Lots and lots of new businesses now accept Bitcoins One legitimate criticism of Bitcoin last year was the lack of places to spend them. We basically just had Alpaca Socks, Reddit and Wordpress, we've grown a lot since then!
The $27 story is going massively viral I think the attention this story is getting took a lot of us by surprise. We're thinking "of course if you bought Bitcoins in 2009 you're rich" and it didn't make much of a splash. But to the rest of the world it's a very novel and interesting story.
Institutional money is coming Afraid with the price at $200 that it will be hard to find enough moms and pops to keep money coming in faster than miners are selling? Don't be, there are individuals out there with a net worth higher than the entire Bitcoin ecosystem.
Governments are explicitly saying it's not illegal More and more governments are either saying Bitcoins are legitimate currency, or releasing guidelines for exchanges to comply with anti-money-laundering laws.
New generation of exchanges Mt. Gox's terrible trading engine was a huge factor in the last crash. They couldn't keep up with all the new interest. This time around there are more exchanges in more countries, and not a single point of liquidity.
From Dan Primack at Fortune: Bitcoinana: In September we discussed how SecondMarket had launched the first U.S.-based investment vehicle dedicated exclusively to Bitcoin, called The Bitcoin Investment Trust (beating out the Winklevii, who remain stuck in regulatory limbo). Now comes word that Fortress Investment Group is prepping its own Bitcoin fund, which likely will be much larger than the SecondMarket offering. Details remain scarce, although there are some rumors that some info could be revealed tonight at the Bitcoin New Year’s Eve Bash down on Broad Street (yes, this is an actual thing). But it is worth noting that Fortress earlier this year acquired Koru Ventures, a provider of patent-backed loans to tech companies, in order to launch an IP finance group. Among Koru’s principals (and new Fortress employees) was Steven Waterhouse (ex-CTO of RPX Corp.), whose LinkedIn profile yesterday said that he had just become a partner on an unnamed Bitcoin fund. After I sent Waterhouse an email requesting more info – and also placing a call with Fortress – the Bitcoin mention disappeared from his LinkedIn page (replaced only with “TBD”). My understanding, however, is that the Fortress effort will be something like a currency ETF (similar to Bitcoin Investment Trust), but that Fortress also may raise a separate vehicle to back Bitcoin-related startups. And there likely is some relationship to a new Bitcoin-related fund raised by Pantera Capital, a San Francisco-based hedge fund whose clients are known to include several Fortress executives. Pantera founder Dan Moorehead declined to discuss his Bitcoin efforts or relationship to Fortress – including if his effort and the Fortress fund were one in the same – but an SEC filing indicates that he already has raised around $150 million, and Pantera recently participated in a VC round for crypto-currency payment network Ripple Labs. Moreover, calls to Pantera’s main number are now met with a voicemail that only identifies the firm as “Pantera Bitcoin.” UPDATE: Official link: http://finance.fortune.cnn.com/2013/12/31/fortress-is-forming-a-bitcoin-fund/
TLDR: Bitcoin will win in the end and volatility is not an issue.
It seems like the most common argument I see against bitcoin is the day to day volatility makes it a bad currency. Even though it still has all the features built in necessary to be used as a transactional currency I agree that at this point it is still too volatile. This talk does a good job of explaining the growth cycle of bitcoin and why this volatility is to be expected and will settle down over time. Bitcoin has to grow in market cap by several orders of magnitude before it can really be a stable store of value and that takes time but I believe it will happen because it has better characteristics of money than anything else that exists currently. That is all it needs, to be slightly better than current money and over time it will be adopted just like how gold took over for thousands of years as the most trusted form of money because it was the only thing that had the fundamental characteristics of money. Currently it would be better to think of bitcoin as a commodity, as it grows volatility is decreasing and eventually it will level off once it has reached market saturation and there are better exchanges for liquidity and arbitrage in place (Second Market, Fortress, ETF, etc.). Once it has reached market saturation it should be relatively stable as compared to other fiat currencies (USD, EUR, CNY, etc.). Some core features of bitcoin that make it different (and better) than any other currency on the planet; 1) Open source - The full bitcoin source code is posted on github and available to anyone for review. It is an open source protocol just like TCP/IP, HTTP, SMTP, etc. that anyone can contribute to and improve. This means bitcoin is highly adaptable and flexible and can be improved over time and have new features integrated into it. Eventually people will be using bitcoin without even realizing it, just how they use the protocols I just mentioned whenever they access a webpage or send an email. 2) Decentralized - I would invite you to watch this segment by Chris Odom on the relation between bitcoin and bittorrent. Basically bitcoin cant be shut down because there is no central point of failure. 3) Deflationary & Divisible - Bitcoin is hard coded at a limit of 21,000,000 bitcoins ever and each bitcoin can be divided into 100,000,000 units. That means that each unit has the ability to expand to hold a near endless amount of value and since there is a hard cap on the total supply the demand is what dictates the price of individual units. 21,000,000 may seem like a lot of but if bitcoin were to take over just 10% of the value of gold (not to mention remittances, wealth storage, tax havens, dark markets, etc.) it would have to swell to well above $10,000 or even $100,000 per unit. It really is a modern day gold rush because there is only so much that will ever exist. It really takes weeks of research to fully understand what makes bitcoin a better form of money. I have done my best to break it down and simplify it but there is really so much more to it (I haven't even discussed the fact that it opens up automated contracts, direct property transfer, zero trust voting, autonomous corporations, etc. etc. etc. there is a whole world of potential that was never before possible because people couldn't figure out zero trust systems. This problem has been solved and the world will never be the same, you cant uninvent bitcoin just like you cant uninvent the internet, the car or the nuclear bomb. It exists now and there is no going back). If it is something that interests you I would highly recommend digging deeper as I have only scratched the surface. If not, feel free to ignore it, it will keep doing its thing behind the scenes, slowly (or maybe very very quickly) chipping away at the current model.
Ten Non-sensationalist Bitcoin Predictions for 2014
Happy New Year! Since everyone else is doing it, I thought that it would be fun to put together a list of my ten predictions for Bitcoin in 2014. (Spoiler: I am not going to predict the final price per bitcoin because those predications are universally garbage. Unless you are tothemoonguy.) Without further ado, and in no particular order: 1) Regulatory Victories: Major nations in Europe and North America (including the U.S.) regulate Bitcoin as a commodity or security. Few if any treat Bitcoin as a true currency. That means that Bitcoin gains and losses will be taxable at long- and short-term rates, and wallet services will need to work quickly to provide accurate trading forms (with offsetting lots) for customers. Day-traders (including hobbyists) will likely need to register with the appropriate regulatory bodies to get preferential tax treatment. Silicon Valley tax lawyers rejoice when they see an influx of new business from Bitcoin's paper millionaires who are now panicked about paying taxes on the toys they purchased with appreciated bitcoin, cars, apartments, etc. By the end of 2014, China decides to get back into the game so they don't miss out on the next major tech boom. 2) Pot & Porn: Regardless of your personal values, marijuana and pornography are massive industries which straddle the line between legal and illegal. Don't expect BitPay or Coinbase to service these markets any time soon. Do expect one or more Bitcoin startups to focus nearly exclusively on these gray markets. Some will call them Silk Road Lites, I'll call them major money makers. (More tomorrow.) 3) Academic Interest: More academic study will lead to greater insights into the Bitcoin blockchain, price movements, and intrinsic value. I am personally interested, among other things, in using some of the blockchain's information to come up with a "fully-diluted" price for a bitcoin. Something that factors in a) the future bitcoins that will be mined on schedule, b) the estimated "dead" bitcoin from early miners who discarded or lost their private keys, c) the average sent vs. receipted split in bitcoin transactions, which affects the meaningfulness of "bitcoin days destroyed" - a weighted average bitcoin addresses that monitors how long they have been inactive. (Full topic next week.) 4) Wall Street Interest: 2014 will be the year that Bitcoin went Wall Street, if not mainstream. The Winklevii are still working on getting their ETF listed on major exchanges. SecondMarket's Bitcoin Investment Trust is a hot investment vehicle and now it seems that Fortress Investment Group and Pantera Capital have raised nearly $150mm for a new Bitcoin-related fund. Expect this to be the tip of the iceberg. I think we could see a major bank's trading desk integrate Bitcoin, and wouldn't be surprised to see a tiny startup like Coinsetter get swooped up for an eye-popping amount as a strategic acquisition / acquihire. 5) Volatility is Addressed: Bitcoin is still missing mainstream consumers. Without consumers, there will be limited demand for merchants to accept bitcoin. Without a vibrant transaction system, there will be limited value in bitcoin to investors. Without consumers, merchants and investors, bitcoins become worthless and the Bitcoin technology loses steam. Expect some new ventures to successfully tackle this volatility problem, including my company Inscrypto. Bitcoin doesn't need to be a currency, it simply needs to look and feel and act like one for non-investors. 6) Financial Cowboys Get Rich: Holy crap, I wish that I were a tech-savvy Wall Street guy because Bitcoin is a FinTech experts wet dream. Institutions might have to wait until the regulatory bodies green light their activity in Bitcoin, but individual day traders have no such restrictions. There are massive arbitrage opportunities between exchanges. Chartists can actually make money by exploiting trends that make the illiquid market inefficient for the time being. Trading algorithms may be written that improve system-wide liquidity and enrich their authors. Wild. 7) Entrepreneurs Solve Problems: Some of bitcoin's biggest critiques (volatility, illiquidity, etc.) will yield tremendous innovations in 2014. All an entrepreneur with a bitcoin obsession needs to do is spend a day on /bitcoin and he'll come up with a dozen startup ideas. As one MIT Sloan student asked me: "Can't you just take anything in financial services and make a bitcoin version?" Pretty much, yeah. That's why so many people are salivating. 8) Bitcoin Remains the Dominant Crypto: Bitcoin's healthy alt-currency ecosystem is good for Bitcoin the technology platform because it provides a back-up plan to any existential threat to bitcoin the currency. That said, the majority of developer talent is building on top of the Bitcoin protocol first, and the new layers and applications that are created this year will continue to strengthen the overall Bitcoin ecosystem. Expect Bitcoin to remain the gold standard of crypto-currencies, and Litecoin and others to maintain their silver, bronze and honorable mention status. 9) Bitcoin as Legal Tender: No, it's not going to happen in the U.S. any time soon. But I'd expect some countries to start storing bitcoin in their central banks in the new year. It's got similar properties to gold as a long-term store of value and the potential for exponential growth. In addition, I'd expect at least some government to accept bitcoin for taxes. Could be a national government or a struggling domestic municipality, maybe Vicco, Kentucky. 10) Price Appreciation: I'm not going to venture a guess into the future value of Bitcoin, but suffice it to say, I believe strongly that the currency will continue to appreciate significantly. Regulatory clarity, greater consumebusiness exposure, insane levels of developer interest, eye-popping investor interest from Wall Street and the VC community, and layers of innovations on top of the underlying Bitcoin protocol will outweigh any negatives. Moreover, the early adopters in Bitcoin aren't selling any time soon. Over half of Bitcoiners polled by Coindesk believe that Bitcoin will go above $10k USD in 2014. Absurd, but shows that this community isn't simply waiting to cash out when the Greater Fools make their buys. So there they are. My professional crystal-ball predictions for 2014, which are incredibly safe and non-sensational. I look forward to checking in on them in six and twelve months, and hopefully becoming a rich man in the process. To the moon!
But it would work much like an ETF, making bitcoin as easy to buy as a penny stock. Much as he believes in bitcoin, Mr. Silbert cautions investors against sinking more money into his fund than they can stand to lose. A 10% loss, a plunge for the stock market, is a relatively quiet day for bitcoin. 01.21.20 Grayscale Bitcoin Trust Becomes SEC Reporting Company. Grayscale Investments®, the world’s largest digital currency asset manager and sponsor of Grayscale® Bitcoin Trust* (OTCQX: GBTC) (the “Trust”), today announced that the Registration Statement on Form 10 that it filed with the Securities and Exchange Commission (“SEC”) on behalf of the Trust has been deemed effective. SecondMarket is planning to open up its private bitcoin investment fund to ordinary investors. The change should be in place by the fourth quarter of 2014, the Wall Street Journal reports. Evolve Fund Group Inc. is a financial corporation that is based in Canada. According to a recent report, the Canadian finance firm has filed a preliminary prospectus for Canada’s first Bitcoin ETF.The Bitcoin ETF is going to be called “BITS” and will be an easy and fast way for stock investors to indirectly invest into the decentralized cryptocurrency. Maxim Nurov, a fund manager at Black Square Capital, told CNNMoney that he doesn't expect a bitcoin ETF to be approved by the SEC anytime soon. "The main focus of the SEC is investor protection
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