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"Available to US accredited investors." It seems a little ironic that any Joe Blow with a credit card can buy cryptocurrency, at presumably higher risk since h

"Available to US accredited investors." It seems a little ironic that any Joe Blow with a credit card can buy cryptocurrency, at presumably higher risk since he's managing the assets himself, but he can't invest in this fund.

conanbatt 9y ago
Thank you SEC!
jzwinck 9y ago
Yes. You can only buy this if you can show income over 200k USD for the past 2-3 years (or meet other criteria which are less common for people on HN). https://www.investopedia.com/terms/a/accreditedinvestor.asp https://www.investopedia.com/terms/a/accreditedinvestor.asp
- matte_black 9y ago
  The HN community has fairly high net worth on average, I wouldn’t be surprised if a good amount here were accredited.
  - greenyoda 9y ago
    My guess is that there are a lot of young people on HN who may have negative net worths - just got out of college a couple of years ago and still paying off student loans. Probably more of those here than there are millionaires.
    - matte_black 9y ago
      Doubt it. For one, HN is a global community and in many other countries the problem of college leaving you with crippling debt isn’t as big as what you see in America. And second, the largest demographic in HN by far are straight white males, who often come from middle class families with high earning incomes, enough to pay for education on top of whatever scholarships are earned. Aside from that, many have been in the tech industry for years or even decades earning six figure salaries. Assuming they keep decent savings invested or have had a few big wins it’s easy to see how this crowd can have some big pockets. And then there’s a sizable amount of outliers: cryptocurrency millionaires, founders of acquired companies, early stage employees post IPO or even current founders of multi-million dollar companies, maybe even a billionaire or two.
EggsOnToast 9y ago
The upside of crypto currency is the amount of agency it currently gives to the holder. The downside of crypto currency is that as personal agency increases the protections from making bad decisions usually decreases. Ulterior motives aside, of which there are a few, the historical reasons that Joe Average is blocked from certain types of investment is because he was making enough bad decisions to warrant aid. Whether or not it's right to impose restrictions on Jack Everybody to protect Joe Average depends largely on your political outlook.
bufferoverflow 9y ago
This whole regulation is unneeded. You can bring your money to a casino and put it all on zero. Or buy a thousand lottery tickets. But investing in risky businesses needs to be walled off to the wealthy. What we really need is the real consequences for fraud / false financial claims.
- TaylorGood 9y ago
  In comparison it becomes laughable. Old rules?
- Zelphyr 9y ago
  The Libertarian in me agrees but then I think of the psychology of how people approach casino gambling vs business investing. For the former, I feel like people know going in that the odds are in favor of the house and they come to terms with that by saying to themselves that its entertainment. In other words, they kind-of expect to get screwed. In business investing its the opposite. They really do think they stand a chance at making millions even when the odds may actually be worse than gambling in some cases, especially if they fail to do their due diligence. So maybe instead of regulation we simply need a legal, notarized document signed for every investment that states "I am aware that I stand a very high chance of losing all of my money and relinquish my rights to sue anyone involved unless outright fraud has been established." Probably still wouldn't work, but its worth consideration.
  - gascan 9y ago
    unless outright fraud has been established I've always suspected that was part of the reason- it's simply far easier to defraud small fry who don't have the experience to spot fraud or the resources to prosecute it.
    - JumpCrisscross 9y ago
      > it's simply far easier to defraud small fry who don't have the experience to spot fraud or the resources to prosecute it Legal and diligence costs on most illiquid investments are tens of thousands of dollars. Anyone investing small amounts (a) can’t afford the diligence, (b) probably doesn’t know what they’re doing and (c) can’t afford to lose even that small amount. That attracts a specific variety of fraudster (see Bitconnect). We’ve seen this happen every time we break the wall between markets with high and low information assymetry.
icedchai 9y ago
He can, he just has to check a box and lie. Maybe he was an accredited yesterday, but today he isn't. Who's to say. And the truth is, nobody checks.
ahtu123 9y ago
This "index fund" is made out of four currencies, BTC, ETH, LTC, BTC cash. Just buy a bunch of those and you're "investing" in their "index". Also you don't have to pay their fee for their immense expertise in putting this together.
- subroutine 9y ago
  Is this seriously all it is? Laughable.
- AndrewGaspar 9y ago
  I would guess rebalancing regularly to track their index would result in more fees than the index fund fee. Edit: Apparently they only rebalance once a year? In which case, nvm.
- spiznnx 9y ago
  I already pay a premium[0] on GBTC over the underlying crypto so I can have easy exposure in my IRAs, and would gladly do so for ETH, LTC, BCH etc. 0. Average 52-week premium 56.18% https://www.bloomberg.com/quote/GBTC:US https://www.bloomberg.com/quote/GBTC:US
  - skellera 9y ago
    For existing only 3 years in one of the greatest bull markets, it’s a little early to call the value in GBTC.
- techman9 9y ago
  To be fair, it's market cap weighted. You could just buy every stock on the S&P too, but lots of investors prefer VOO.
  - jartelt 9y ago
    You can't easily go buy a fraction of every stock in the S&P 500 whereas I can easily go buy a fraction of the coins in the Coinbase index. This means it is easy for me to go turn $100 into a market cap weighted index of the 4 coins on Coinbase, but it would be impossible for me to go turn $100 into fractional shares of all the companies in the S&P 500.
jakecrouch 9y ago
My theory is that the only reason the SEC hasn't classified all cryptocurrencies as securities is that doing so would be too unpopular politically. Anything that fails to get wide backing before the regulators hear about it, will get cracked down on.

conanbatt 9y ago

Thank you SEC!

jzwinck 9y ago

Yes. You can only buy this if you can show income over 200k USD for the past 2-3 years (or meet other criteria which are less common for people on HN). https://www.investopedia.com/terms/a/accreditedinvestor.asp https://www.investopedia.com/terms/a/accreditedinvestor.asp

matte_black 9y ago
The HN community has fairly high net worth on average, I wouldn’t be surprised if a good amount here were accredited.
- greenyoda 9y ago
  My guess is that there are a lot of young people on HN who may have negative net worths - just got out of college a couple of years ago and still paying off student loans. Probably more of those here than there are millionaires.
  - matte_black 9y ago
    Doubt it. For one, HN is a global community and in many other countries the problem of college leaving you with crippling debt isn’t as big as what you see in America. And second, the largest demographic in HN by far are straight white males, who often come from middle class families with high earning incomes, enough to pay for education on top of whatever scholarships are earned. Aside from that, many have been in the tech industry for years or even decades earning six figure salaries. Assuming they keep decent savings invested or have had a few big wins it’s easy to see how this crowd can have some big pockets. And then there’s a sizable amount of outliers: cryptocurrency millionaires, founders of acquired companies, early stage employees post IPO or even current founders of multi-million dollar companies, maybe even a billionaire or two.

EggsOnToast 9y ago

The upside of crypto currency is the amount of agency it currently gives to the holder. The downside of crypto currency is that as personal agency increases the protections from making bad decisions usually decreases. Ulterior motives aside, of which there are a few, the historical reasons that Joe Average is blocked from certain types of investment is because he was making enough bad decisions to warrant aid. Whether or not it's right to impose restrictions on Jack Everybody to protect Joe Average depends largely on your political outlook.

bufferoverflow 9y ago

This whole regulation is unneeded. You can bring your money to a casino and put it all on zero. Or buy a thousand lottery tickets. But investing in risky businesses needs to be walled off to the wealthy. What we really need is the real consequences for fraud / false financial claims.

TaylorGood 9y ago
In comparison it becomes laughable. Old rules?
Zelphyr 9y ago
The Libertarian in me agrees but then I think of the psychology of how people approach casino gambling vs business investing. For the former, I feel like people know going in that the odds are in favor of the house and they come to terms with that by saying to themselves that its entertainment. In other words, they kind-of expect to get screwed. In business investing its the opposite. They really do think they stand a chance at making millions even when the odds may actually be worse than gambling in some cases, especially if they fail to do their due diligence. So maybe instead of regulation we simply need a legal, notarized document signed for every investment that states "I am aware that I stand a very high chance of losing all of my money and relinquish my rights to sue anyone involved unless outright fraud has been established." Probably still wouldn't work, but its worth consideration.
- gascan 9y ago
  unless outright fraud has been established I've always suspected that was part of the reason- it's simply far easier to defraud small fry who don't have the experience to spot fraud or the resources to prosecute it.
  - JumpCrisscross 9y ago
    > it's simply far easier to defraud small fry who don't have the experience to spot fraud or the resources to prosecute it Legal and diligence costs on most illiquid investments are tens of thousands of dollars. Anyone investing small amounts (a) can’t afford the diligence, (b) probably doesn’t know what they’re doing and (c) can’t afford to lose even that small amount. That attracts a specific variety of fraudster (see Bitconnect). We’ve seen this happen every time we break the wall between markets with high and low information assymetry.

icedchai 9y ago

He can, he just has to check a box and lie. Maybe he was an accredited yesterday, but today he isn't. Who's to say. And the truth is, nobody checks.

ahtu123 9y ago

This "index fund" is made out of four currencies, BTC, ETH, LTC, BTC cash. Just buy a bunch of those and you're "investing" in their "index". Also you don't have to pay their fee for their immense expertise in putting this together.

subroutine 9y ago
Is this seriously all it is? Laughable.
AndrewGaspar 9y ago
I would guess rebalancing regularly to track their index would result in more fees than the index fund fee. Edit: Apparently they only rebalance once a year? In which case, nvm.
spiznnx 9y ago
I already pay a premium[0] on GBTC over the underlying crypto so I can have easy exposure in my IRAs, and would gladly do so for ETH, LTC, BCH etc. 0. Average 52-week premium 56.18% https://www.bloomberg.com/quote/GBTC:US https://www.bloomberg.com/quote/GBTC:US
- skellera 9y ago
  For existing only 3 years in one of the greatest bull markets, it’s a little early to call the value in GBTC.
techman9 9y ago
To be fair, it's market cap weighted. You could just buy every stock on the S&P too, but lots of investors prefer VOO.
- jartelt 9y ago
  You can't easily go buy a fraction of every stock in the S&P 500 whereas I can easily go buy a fraction of the coins in the Coinbase index. This means it is easy for me to go turn $100 into a market cap weighted index of the 4 coins on Coinbase, but it would be impossible for me to go turn $100 into fractional shares of all the companies in the S&P 500.

jakecrouch 9y ago

My theory is that the only reason the SEC hasn't classified all cryptocurrencies as securities is that doing so would be too unpopular politically. Anything that fails to get wide backing before the regulators hear about it, will get cracked down on.