10 ms·

Bitcoin blow as fund drops U.S. exchange application

71 points by uptown 9y ago

nwah1 9y ago
It says this fund is still traded at unofficial exchanges at prices a number of times higher than the value of the bitcoin it holds. The multiple layers of speculative mania involved in that boggles the mind.
- ringaroundthetx 9y ago
  It trades on the OTC Bulletin Boards since 2014 or so, and is prime for getting easy exposure with IRA accounts simply because it can be accessed through normal brokerages. Hasn't exactly been a bad bet for those people.
- clarkmoody 9y ago
  Different prices at different trading venues speaks to the difficulty of moving funds quickly between them. When those hurdles are overcome, such a glaring arbitrage opportunity will disappear. Would you consider it "speculative mania" if GBTC traded at a steep discount to all other exchanges?
  - jayd16 9y ago
    You're probably correct, but... >Would you consider it "speculative mania" if GBTC traded at a steep discount to all other exchanges? This is as shallow an argument as "If Jimmy broke his leg getting hit by a car, would you say I got hit by a car if I broke my leg?" If you were also playing in traffic, then yeah.
xutopia 9y ago
That's overstated. I can already exchange Bitcoin easily and it's the best return I have of all my funds.
- xbzbanna 9y ago
  It would generally be appropriate to say things like "was the best return" or "has been the best return" when describing past price appreciation. "Is the best return" could be reserved for something like a stable source of income.
  - ringaroundthetx 9y ago
    Many people earn income in bitcoin or cryptocurrency and would consider the US dollar the poor investment or purchase. It is all a matter of perspective which simple wasn't apparent because there weren't options a decade ago.
    - Chriky 9y ago
      ...for some definitions of "many"
      - 659087 9y ago
        Literally dozens.
        ringaroundthetx 9y ago
        thats probably true, the philosophy has been there since at least 2012 though
  - revmoo 9y ago
    > It would generally be appropriate to say things like "was the best return" or "has been the best return" when describing past price appreciation. "Is the best return" could be reserved for something like a stable source of income. Kinda like how historically index funds have been the best investment but also might not be in the future? :)
- SippinLean 9y ago
  This is a bit different, BIT is an open-ended trust that derives its value solely from the price of Bitcoin; not a direct exchange of Bitcoins.
kobeya 9y ago
GBTC is a regulatory dodge that does not reliably track the price of bitcoin. As someone who wants a bitcoin ETF, I’m certain the SEC would not have approved the listing of GBTC and very confused as to why ICE (who should know better) ever thought they would.
readhn 9y ago
RIP bitcoin. Current valuation is $4142.99 higher than it should be.. Im thinking we will get there within a couple of years. $1-2 seems about right per 1 BTC.
- chrisco255 9y ago
  Yeah...$20 million market cap seems reasonable... smh...
  - lolsal 9y ago
    What is "smh"?
    - ringaroundthetx 9y ago
      "shake my head"
      - lolsal 9y ago
        Thank you.
    - StavrosK 9y ago
      "Shaking my head".
  - readhn 9y ago
    There is utility in BTC thats why im putting 1-2$ value on it. 4000$ + per one BTC is pure insanity that will soon end badly for most "speculators". There is nothing new under the sun. Go back to the tulips and many booms and busts after. Its happening with BTC now. And just like all the others it will end the same.
    - shlant 9y ago
      the fact that you tout the "tulip mania" example shows that Bitcoin and markets are not the only things you know little about: http://www.smithsonianmag.com/history/there-never-was-real-tulip-fever-180964915/#cZtyAgAvv2FlrssY.99?no-ist http://www.smithsonianmag.com/history/there-never-was-real-t... > BTC is pure insanity that will soon end badly for most "speculators" > Its happening with BTC now Join the long line of people that have been saying this for almost 5 years and have been so soooooooooo wrong
ringaroundthetx 9y ago
Its been priced in that nobody expects the SEC to approve that application. But pay attention to this space, the guy who worked on the Winklevoss Bitcoin ETF - which got rejected too - has taken the job at the SEC of approving ETFs. The last guy finally quit because of some red herring about supporting the trump administration or something (the Chairwoman Commissioner quit too) I love when a power vacuum gets people I like in government, especially when nobody is noticing.
- sova 9y ago
  Whoa. So the likelihood of an SEC-backed coin exchange is... nonzero??
  - benmowa 9y ago
    well if crowdfunding can get OK'd ..... why not crypto? https://www.sec.gov/news/pressrelease/2015-249.html https://www.sec.gov/news/pressrelease/2015-249.html
    - ringaroundthetx 9y ago
      Crowdfunding was OK'd by Congress in the financial reform bill of 2010 and the JOBS act of 2012, it took the SEC 3 additional years of dragging their feet to be forced to be "okay" with it, and the SEC introduced many compromises which makes crowdfunding under those regulations to be dead-on-arrival with the 1 million usd limit and similar costs as other kinds of fund raising. Despite that, understand that crypto enjoys no such luxury from Congress, and what we are talking about here has nothing to do with crowdfunding via crypto like the ICOs, but instead digital commodity trust ETFs
      - sova 9y ago
        Establishing giants in the bitcoinosphere, effectively?
        9y ago
_callcc 9y ago
To get live data from ICE--the exchange that withdrew the request--I'm currently paying a broker $120/month. By comparison, just about every crypto exchange currently offers push feeds and historical data for free. In most cases you don't even need to sign in. In some sense this is a measure of the immaturity of crypto markets. But it's also a reminder that with main institutional players moving in, the barriers to entry will go way up. We'll probably start to see more brokers and vendors and more consolidation/buyouts of the crypto exchanges.
- gjem97 9y ago
  I believe that as small exchanges are attempting to gain market share, giving away their data makes sense. They need to advertise the liquidity on their market in order to attract business. As exchanges get bigger, they reach a point where they think, "You know what, there are a lot of people who can't run their business without quotes from our exchange." And they start charging for data. And it's true, and furthermore, there are large financial institutions that are farily price insensitive. So they keep raising and raising prices. I don't have any hard evidence of what the end result is. Price equilibrium? Implosion of liquidity because nobody wants to buy their data any more?
- josh2600 9y ago
  As a fund manager, I wish there was a data warehousing service I could pay for with a queryable by the minute (or better granularity) API that captured multiple exchanges across multiple countries for the top 50 coins. I would pay a lot monthly for that product. Such a pro-level service doesn't exist at all yet. Also there aren't any derivatives or futures to speak of yet (don't point out the existing futures markets, they have no volume). Source: I run CryptoLotus, a crypto hedge fund.
  - jameskegel 9y ago
    Reading what you describe, I think Coinigy does this currently. I have a premium account and use it as an 'exchange aggregator' for my trade portfolio, to trade on and trade between many different exchanges with many trade pairs, and I believe it offers an API so that I could essentially abstract their frontend from the process. I pay about 20 dollars a month.
orthecreedence 9y ago
Huge blow to bitcoin. It's down a whopping 3%. I think it'd be great to be able to trade BTC on a regular stock exchange, but I'm not going to hold my breath for that to happen. Also, I think the big players who have an interest in speculating are already holding and not sitting around thinking "aww rats, it went up another 50% this week, if only we could buy it on the stock market!" Or maybe they are and once it hits the market it'll shoot to 20k. Who knows.
- noitsnot 9y ago
  Mark Cuban's bubble tweet gave it a bigger slide. I'm not sure where it's headed but it sure is a wild ride.
arisAlexis 9y ago
Dramatic title
sukulent 9y ago
I dont get bitcoin. Whats the value? I dont really see where I need it. Used to mine back in the days right after I heard about and had great hopes and fun. It was worth nothing back then, but since just had too many letdowns because of the community around this so called currency. You could literally replace "Bitcoin" with "Jesus" in any conversation online in the big bitcoin communities and it would seem just like a religious cult, which I am not too much into. Actually that would be a fun idea for a browser plugin now that I think about it :D I transfer money regularly to asia, but Transferwise is a much better option for this. Takes 20 minutes to have the real usable money in the account. I lost 3000 euro recently on an exchange that went bust and I almost lost 60 bitcoins on MtGox, where I was one of their 50 first users. Only saved it because I went crazy on their IRC, so I guess MagicalTux just wanted to get rid of me. Those 3000 euros were for playing around with ETH by the way - no big deal - but I decided that was the last straw. Just had enough, I guess and I kind of hope that this will turn into the shitshow, I think it is going to turn into because these days there is really nothing I could think of doing with a bitcoin if I had one. Seriously. If I had a bitcoin, what could I do with it except selling it?? And the blockchain? What is it good for except for bitcoin? It has been around now for 10 years and everybody has been praising it to the skies, but have we really seen any breakthrough tech come out of this? Its not super complicated tech - just an interesting solution to a computer science problem. If it was so valuable, I am sure everybody who wants to earn money would be all over it. Thats what we like, right? Earn money. A certain story by HC Andersen comes to mind.

71 points by uptown 9y ago

It says this fund is still traded at unofficial exchanges at prices a number of times higher than the value of the bitcoin it holds. The multiple layers of speculative mania involved in that boggles the mind.

ringaroundthetx 9y ago
It trades on the OTC Bulletin Boards since 2014 or so, and is prime for getting easy exposure with IRA accounts simply because it can be accessed through normal brokerages. Hasn't exactly been a bad bet for those people.
clarkmoody 9y ago
Different prices at different trading venues speaks to the difficulty of moving funds quickly between them. When those hurdles are overcome, such a glaring arbitrage opportunity will disappear. Would you consider it "speculative mania" if GBTC traded at a steep discount to all other exchanges?
- jayd16 9y ago
  You're probably correct, but... >Would you consider it "speculative mania" if GBTC traded at a steep discount to all other exchanges? This is as shallow an argument as "If Jimmy broke his leg getting hit by a car, would you say I got hit by a car if I broke my leg?" If you were also playing in traffic, then yeah.

xutopia 9y ago

That's overstated. I can already exchange Bitcoin easily and it's the best return I have of all my funds.

xbzbanna 9y ago
It would generally be appropriate to say things like "was the best return" or "has been the best return" when describing past price appreciation. "Is the best return" could be reserved for something like a stable source of income.
- ringaroundthetx 9y ago
  Many people earn income in bitcoin or cryptocurrency and would consider the US dollar the poor investment or purchase. It is all a matter of perspective which simple wasn't apparent because there weren't options a decade ago.
  - Chriky 9y ago
    ...for some definitions of "many"
    - 659087 9y ago
      Literally dozens.
      - ringaroundthetx 9y ago
        thats probably true, the philosophy has been there since at least 2012 though
- revmoo 9y ago
  > It would generally be appropriate to say things like "was the best return" or "has been the best return" when describing past price appreciation. "Is the best return" could be reserved for something like a stable source of income. Kinda like how historically index funds have been the best investment but also might not be in the future? :)
SippinLean 9y ago
This is a bit different, BIT is an open-ended trust that derives its value solely from the price of Bitcoin; not a direct exchange of Bitcoins.

kobeya 9y ago

GBTC is a regulatory dodge that does not reliably track the price of bitcoin. As someone who wants a bitcoin ETF, I’m certain the SEC would not have approved the listing of GBTC and very confused as to why ICE (who should know better) ever thought they would.

readhn 9y ago

RIP bitcoin. Current valuation is $4142.99 higher than it should be.. Im thinking we will get there within a couple of years. $1-2 seems about right per 1 BTC.

chrisco255 9y ago
Yeah...$20 million market cap seems reasonable... smh...
- lolsal 9y ago
  What is "smh"?
  - ringaroundthetx 9y ago
    "shake my head"
    - lolsal 9y ago
      Thank you.
  - StavrosK 9y ago
    "Shaking my head".
- readhn 9y ago
  There is utility in BTC thats why im putting 1-2$ value on it. 4000$ + per one BTC is pure insanity that will soon end badly for most "speculators". There is nothing new under the sun. Go back to the tulips and many booms and busts after. Its happening with BTC now. And just like all the others it will end the same.
  - shlant 9y ago
    the fact that you tout the "tulip mania" example shows that Bitcoin and markets are not the only things you know little about: http://www.smithsonianmag.com/history/there-never-was-real-tulip-fever-180964915/#cZtyAgAvv2FlrssY.99?no-ist http://www.smithsonianmag.com/history/there-never-was-real-t... > BTC is pure insanity that will soon end badly for most "speculators" > Its happening with BTC now Join the long line of people that have been saying this for almost 5 years and have been so soooooooooo wrong

ringaroundthetx 9y ago

Its been priced in that nobody expects the SEC to approve that application. But pay attention to this space, the guy who worked on the Winklevoss Bitcoin ETF - which got rejected too - has taken the job at the SEC of approving ETFs. The last guy finally quit because of some red herring about supporting the trump administration or something (the Chairwoman Commissioner quit too) I love when a power vacuum gets people I like in government, especially when nobody is noticing.

sova 9y ago
Whoa. So the likelihood of an SEC-backed coin exchange is... nonzero??
- benmowa 9y ago
  well if crowdfunding can get OK'd ..... why not crypto? https://www.sec.gov/news/pressrelease/2015-249.html https://www.sec.gov/news/pressrelease/2015-249.html
  - ringaroundthetx 9y ago
    Crowdfunding was OK'd by Congress in the financial reform bill of 2010 and the JOBS act of 2012, it took the SEC 3 additional years of dragging their feet to be forced to be "okay" with it, and the SEC introduced many compromises which makes crowdfunding under those regulations to be dead-on-arrival with the 1 million usd limit and similar costs as other kinds of fund raising. Despite that, understand that crypto enjoys no such luxury from Congress, and what we are talking about here has nothing to do with crowdfunding via crypto like the ICOs, but instead digital commodity trust ETFs
    - sova 9y ago
      Establishing giants in the bitcoinosphere, effectively?
      - 9y ago

_callcc 9y ago

To get live data from ICE--the exchange that withdrew the request--I'm currently paying a broker $120/month. By comparison, just about every crypto exchange currently offers push feeds and historical data for free. In most cases you don't even need to sign in. In some sense this is a measure of the immaturity of crypto markets. But it's also a reminder that with main institutional players moving in, the barriers to entry will go way up. We'll probably start to see more brokers and vendors and more consolidation/buyouts of the crypto exchanges.

gjem97 9y ago
I believe that as small exchanges are attempting to gain market share, giving away their data makes sense. They need to advertise the liquidity on their market in order to attract business. As exchanges get bigger, they reach a point where they think, "You know what, there are a lot of people who can't run their business without quotes from our exchange." And they start charging for data. And it's true, and furthermore, there are large financial institutions that are farily price insensitive. So they keep raising and raising prices. I don't have any hard evidence of what the end result is. Price equilibrium? Implosion of liquidity because nobody wants to buy their data any more?
josh2600 9y ago
As a fund manager, I wish there was a data warehousing service I could pay for with a queryable by the minute (or better granularity) API that captured multiple exchanges across multiple countries for the top 50 coins. I would pay a lot monthly for that product. Such a pro-level service doesn't exist at all yet. Also there aren't any derivatives or futures to speak of yet (don't point out the existing futures markets, they have no volume). Source: I run CryptoLotus, a crypto hedge fund.
- jameskegel 9y ago
  Reading what you describe, I think Coinigy does this currently. I have a premium account and use it as an 'exchange aggregator' for my trade portfolio, to trade on and trade between many different exchanges with many trade pairs, and I believe it offers an API so that I could essentially abstract their frontend from the process. I pay about 20 dollars a month.

orthecreedence 9y ago

Huge blow to bitcoin. It's down a whopping 3%. I think it'd be great to be able to trade BTC on a regular stock exchange, but I'm not going to hold my breath for that to happen. Also, I think the big players who have an interest in speculating are already holding and not sitting around thinking "aww rats, it went up another 50% this week, if only we could buy it on the stock market!" Or maybe they are and once it hits the market it'll shoot to 20k. Who knows.

noitsnot 9y ago
Mark Cuban's bubble tweet gave it a bigger slide. I'm not sure where it's headed but it sure is a wild ride.

arisAlexis 9y ago

Dramatic title

sukulent 9y ago

I dont get bitcoin. Whats the value? I dont really see where I need it. Used to mine back in the days right after I heard about and had great hopes and fun. It was worth nothing back then, but since just had too many letdowns because of the community around this so called currency. You could literally replace "Bitcoin" with "Jesus" in any conversation online in the big bitcoin communities and it would seem just like a religious cult, which I am not too much into. Actually that would be a fun idea for a browser plugin now that I think about it :D I transfer money regularly to asia, but Transferwise is a much better option for this. Takes 20 minutes to have the real usable money in the account. I lost 3000 euro recently on an exchange that went bust and I almost lost 60 bitcoins on MtGox, where I was one of their 50 first users. Only saved it because I went crazy on their IRC, so I guess MagicalTux just wanted to get rid of me. Those 3000 euros were for playing around with ETH by the way - no big deal - but I decided that was the last straw. Just had enough, I guess and I kind of hope that this will turn into the shitshow, I think it is going to turn into because these days there is really nothing I could think of doing with a bitcoin if I had one. Seriously. If I had a bitcoin, what could I do with it except selling it?? And the blockchain? What is it good for except for bitcoin? It has been around now for 10 years and everybody has been praising it to the skies, but have we really seen any breakthrough tech come out of this? Its not super complicated tech - just an interesting solution to a computer science problem. If it was so valuable, I am sure everybody who wants to earn money would be all over it. Thats what we like, right? Earn money. A certain story by HC Andersen comes to mind.