> The Trust values its bitcoin as measured at 4:00 p.m. Eastern time using the Gemini Exchange Spot Price on each Business Day. The Gemini Exchange Spot Price is the price of bitcoin on the Gemini Exchange as of 4:00 p.m. Eastern time on each Business Day.
So they are using the exchange they founded to price their bitcoin trust.............hmmmm
> While the Trust’s investment objective is for the Shares to track the price of bitcoin as measured at 4:00 p.m. Eastern time using the Gemini Exchange Spot Price on each Business Day, the Shares may trade in the secondary market on BATS at prices that are lower or higher relative to the NAV. The amount of the discount or premium in the trading price relative to the NAV may be influenced by non-concurrent trading hours and liquidity between BATS and larger Bitcoin Exchanges in the Bitcoin Exchange Market.
This represents an interesting arbitrage opportunity. This could end up like PHYS or SBT/CGT where they tend to trade at a discount to NAV.
> Under the License Agreement, the Sponsor is required to pay a monthly royalty equal to a percent of the net Sponsor Fee received by the Sponsor during the previous month based on a running royalty rate of between eight (8) percent and sixteen (16) percent of such net Sponsor Fees. WIP retains the right, but is not required, to terminate the license if the Sponsor does not meet a minimum royalty payment of $300,000 during the prior 12-month period, starting on the third anniversary of the License Agreement. The Sponsor has the right to sublicense its rights within the Field of Use in exchange for an obligation to pay a seventy-five (75) percent royalty based on revenue and/or any other compensation, if any, collected from such sub-license.
I'm not sure what IP the wiklevoss' company WIP has licensed to the trust, but getting a free $300,000/year sounds like a good deal from them and not so much for the unit holders.
So the winklevoss' license IP to the fund , use their exchange to price the fund and the custodian of the fund is Gemini Trust Company, LLC, which they also control.
One other thing that looks dubious is that the sponsor is Digital Asset Services, LLC, You might google that and find Digial Assests https://digitalasset.com/ a legitimate blockchain company, but you'd be wrong.
> The Trust’s Sponsor is Digital Asset Services, LLC. The Sponsor is a Delaware limited liability company formed on May 9, 2013, and is wholly-owned by Winklevoss Capital Management, LLC (“WCM”).
So the name is about as close as you can get without being the same, I mean I'm trying really hard to see a way in which this isn't intentionally misleading, but sadly failing.
I mean, shit, why not just write these guys a cheque and buy your own bitcoins.
>One other thing that looks dubious is that the sponsor is Digital Asset Services, LLC, You might google that and find Digial Assests https://digitalasset.com/ a legitimate blockchain company, but you'd be wrong.
>> The Trust’s Sponsor is Digital Asset Services, LLC. The Sponsor is a Delaware limited liability company formed on May 9, 2013, and is wholly-owned by Winklevoss Capital Management, LLC (“WCM”).
>So the name is about as close as you can get without being the same, I mean I'm trying really hard to see a way in which this isn't intentionally misleading, but sadly failing.
I think I'm probably misinterpreting this, but you appear to be ignoring the really obvious fact that Winklevoss' "Digital Asset Services" predates digitalasset.com
> This represents an interesting arbitrage opportunity. This could end up like PHYS or SBT/CGT where they tend to trade at a discount to NAV.
It should trade at a discount to NAV. Bitcoin held indirectly through fractional ownership of an entity that can be defrauded or bankrupted is worth less than Bitcoin I can hold securely myself.
But since traders can short the Trust, there's a real possibility that a short squeeze could drive the price of shares much higher than NAV.
For example, see what happened to Volkswagen stock when there weren't enough shares for short sellers to cover.
This trust would make it trivial to hold Bitcoin in an IRA with tax free gains. The demand for this is so high that one alternative, GBTC, is trading at nearly twice the market price of Bitcoin.
It's essentially a way for large investor buy and hold Bitcoin without actually buying any bitcoin themselves. The value of the trust ought to reflect the value of Bitcoin.
This won't be the dumbest ETF, it will be a less than ideal way of holding bitcoin. There are lots of ETFs that make it easy to get access to an asset class and get the full economics (foreign exchange ETFs), these are still probably not ideal, but they're reasonable, but bitcoin is pretty easy to buy and sell not sure what benefit an exchange traded product has.
The Wikelvoss's do have a BTC exchange, is the goal to somehow tie this in? Turn their exchange to a market that gets benchmarked? They did also launch the BitIndex. Seems like trying to control the bitcoin benchmark could have financial value.
What makes it illegal to mark the time at which the trust evaluates it's shares? Marking the close for COIN on BATS is illegal. Marking the corresponding BTC event...?
Hear, hear! We mustn't allow others to buy things that we don't approve of from markets not easily bent to our will by force! Who would want a baby that has been in dirty bathwater?
Arbitrage is only possible when there is a low-friction way to redeem an asset for the raw good it's backed by. In the case of traded funds like this, they can only be redeemed in large batches, which means that there should be no more arbitrage opportunity than what's already possible now.
Many of us find it obscene and a bit ridiculous that this easily-manipulated sham for the foolish-minded is even mentioned on HN. Having worked as a software engineer since 1991 -- with a CS degree from UC Berkeley no less -- I cannot think of a single serious-minded peer who takes BTC seriously, all computer people too.
I find it questionable that, just because the U.S. Government has been duped to allow this ETF -- while simultaneously doing everything in their power to undermine BTC -- we somehow must suffer to find BTC held up as a legitimate medium of exchange.
It's really not. It wasn't several years ago when everyone was told "soon it will be accepted everywhere cash and credit cards are" -- and it's not now a legitimate medium of exchange.
Some one(s) will eventually recognize BTC for what it is: a purely speculative gamble, and not a legitimate or safe means of exchange.
Many of us who read HN fully believe that touting or merely holding up speculative gambling indulgences is just not appropriate.
If you like, have a look here for just a small history of victims of BTC, and keep well in mind BTC is not accepted in lieu of cash, credit cards, etc., so the argument 'regular money gets stolen too' doesn't wash, because BTC has no practical utility as a medium of exchange, making it illogical for anyone but a gambler to 'invest' in it:
"""
Bitcoin is a digital asset (“Digital Asset”) based on the decentralized, open source protocol of the peer-to-peer Bitcoin computer network (the “Bitcoin Network” or “Bitcoin”)2 that hosts the decentralized public transaction ledger, known as the “Blockchain,” on which all bitcoin is recorded. The Bitcoin Network software source code includes the protocols that govern the creation of bitcoin and the cryptographic system that secures and verifies Bitcoin transactions. The Blockchain is a canonical record of every bitcoin, every Bitcoin transaction (including the creation or “mining” of new bitcoin) and every Bitcoin address associated with a quantity of bitcoin. The Bitcoin Network and Bitcoin Network software programs can interpret the Blockchain to determine the exact bitcoin balance, if any, of any public Bitcoin address listed in the Blockchain which has taken part in a transaction on the Bitcoin Network. The Bitcoin Network utilizes the Blockchain to evidence the existence of bitcoin in any public Bitcoin address.
"""
This is not entirely accurate - it does not take into account the fact that there is a non-zero probability that a transaction already recorded on Blockchain is later removed from the canonic Blockchain branch.
[+] [-] kristianp|9 years ago|reply
http://published.github.io/sec.gov/ChangeDetection%20-%20Com...
[+] [-] zekevermillion|9 years ago|reply
https://forum.bitcoin.com/bitcoin-discussion/winkelvoss-twin...
Guess they have a new lawyer now...
[+] [-] smnscu|9 years ago|reply
[+] [-] chollida1|9 years ago|reply
> The Trust values its bitcoin as measured at 4:00 p.m. Eastern time using the Gemini Exchange Spot Price on each Business Day. The Gemini Exchange Spot Price is the price of bitcoin on the Gemini Exchange as of 4:00 p.m. Eastern time on each Business Day.
So they are using the exchange they founded to price their bitcoin trust.............hmmmm
> While the Trust’s investment objective is for the Shares to track the price of bitcoin as measured at 4:00 p.m. Eastern time using the Gemini Exchange Spot Price on each Business Day, the Shares may trade in the secondary market on BATS at prices that are lower or higher relative to the NAV. The amount of the discount or premium in the trading price relative to the NAV may be influenced by non-concurrent trading hours and liquidity between BATS and larger Bitcoin Exchanges in the Bitcoin Exchange Market.
This represents an interesting arbitrage opportunity. This could end up like PHYS or SBT/CGT where they tend to trade at a discount to NAV.
> Under the License Agreement, the Sponsor is required to pay a monthly royalty equal to a percent of the net Sponsor Fee received by the Sponsor during the previous month based on a running royalty rate of between eight (8) percent and sixteen (16) percent of such net Sponsor Fees. WIP retains the right, but is not required, to terminate the license if the Sponsor does not meet a minimum royalty payment of $300,000 during the prior 12-month period, starting on the third anniversary of the License Agreement. The Sponsor has the right to sublicense its rights within the Field of Use in exchange for an obligation to pay a seventy-five (75) percent royalty based on revenue and/or any other compensation, if any, collected from such sub-license.
I'm not sure what IP the wiklevoss' company WIP has licensed to the trust, but getting a free $300,000/year sounds like a good deal from them and not so much for the unit holders.
So the winklevoss' license IP to the fund , use their exchange to price the fund and the custodian of the fund is Gemini Trust Company, LLC, which they also control.
One other thing that looks dubious is that the sponsor is Digital Asset Services, LLC, You might google that and find Digial Assests https://digitalasset.com/ a legitimate blockchain company, but you'd be wrong.
> The Trust’s Sponsor is Digital Asset Services, LLC. The Sponsor is a Delaware limited liability company formed on May 9, 2013, and is wholly-owned by Winklevoss Capital Management, LLC (“WCM”).
So the name is about as close as you can get without being the same, I mean I'm trying really hard to see a way in which this isn't intentionally misleading, but sadly failing.
I mean, shit, why not just write these guys a cheque and buy your own bitcoins.
[+] [-] ryanlol|9 years ago|reply
>> The Trust’s Sponsor is Digital Asset Services, LLC. The Sponsor is a Delaware limited liability company formed on May 9, 2013, and is wholly-owned by Winklevoss Capital Management, LLC (“WCM”).
>So the name is about as close as you can get without being the same, I mean I'm trying really hard to see a way in which this isn't intentionally misleading, but sadly failing.
I think I'm probably misinterpreting this, but you appear to be ignoring the really obvious fact that Winklevoss' "Digital Asset Services" predates digitalasset.com
https://appext20.dos.ny.gov/corp_public/CORPSEARCH.ENTITY_IN...
[+] [-] xiphias|9 years ago|reply
It's the other way around: they wanted an ETF, so they needed to create a regulated exchange that has all the required licenses
[+] [-] panarky|9 years ago|reply
It should trade at a discount to NAV. Bitcoin held indirectly through fractional ownership of an entity that can be defrauded or bankrupted is worth less than Bitcoin I can hold securely myself.
But since traders can short the Trust, there's a real possibility that a short squeeze could drive the price of shares much higher than NAV.
For example, see what happened to Volkswagen stock when there weren't enough shares for short sellers to cover.
http://www.reuters.com/article/us-volkswagen-idUSTRE49R3I920...
If the Trust stays small, that's a real risk/opportunity.
If the Trust gets large, then it could have a dramatic effect on the price of Bitcoin itself.
[+] [-] modeless|9 years ago|reply
[+] [-] Scoundreller|9 years ago|reply
> if the Sponsor does not meet a minimum royalty payment of $300,000 during the prior 12-month period
I think you meant $300k/month, not per year.
[+] [-] zekevermillion|9 years ago|reply
[+] [-] omginternets|9 years ago|reply
[+] [-] justinlardinois|9 years ago|reply
[+] [-] naveen99|9 years ago|reply
2. easier hedging / large bets with options
3. Can use existing retirement account
4. Easier to include in a will.
[+] [-] nicky0|9 years ago|reply
[+] [-] jegutman|9 years ago|reply
The Wikelvoss's do have a BTC exchange, is the goal to somehow tie this in? Turn their exchange to a market that gets benchmarked? They did also launch the BitIndex. Seems like trying to control the bitcoin benchmark could have financial value.
[+] [-] darawk|9 years ago|reply
They might have rules preventing them from investing in things that aren't traded on major exchanges.
[+] [-] RhysU|9 years ago|reply
[+] [-] justaman|9 years ago|reply
[+] [-] woodman|9 years ago|reply
[+] [-] solotronics|9 years ago|reply
[+] [-] everfree|9 years ago|reply
[+] [-] jkoschei|9 years ago|reply
[+] [-] youngButEager|9 years ago|reply
I find it questionable that, just because the U.S. Government has been duped to allow this ETF -- while simultaneously doing everything in their power to undermine BTC -- we somehow must suffer to find BTC held up as a legitimate medium of exchange.
It's really not. It wasn't several years ago when everyone was told "soon it will be accepted everywhere cash and credit cards are" -- and it's not now a legitimate medium of exchange.
Some one(s) will eventually recognize BTC for what it is: a purely speculative gamble, and not a legitimate or safe means of exchange.
THIS IS THE U.S. GOVT. -- 3 years ago: https://gigaom.com/2013/05/14/homeland-security-seizes-funds...
THIS IS THE U.S. GOVT. -- 9 months ago: "U.S. government is calling bitcoin anything but a currency" http://www.forbes.com/sites/peterferrara/2013/08/25/the-fede...
Many of us who read HN fully believe that touting or merely holding up speculative gambling indulgences is just not appropriate.
If you like, have a look here for just a small history of victims of BTC, and keep well in mind BTC is not accepted in lieu of cash, credit cards, etc., so the argument 'regular money gets stolen too' doesn't wash, because BTC has no practical utility as a medium of exchange, making it illogical for anyone but a gambler to 'invest' in it:
THIS LIST IS 2 YEARS OLD https://bitcointalk.org/index.php?topic=576337
[+] [-] woodman|9 years ago|reply
[+] [-] DoctorBit|9 years ago|reply
https://en.wikipedia.org/wiki/No_true_Scotsman
[+] [-] justin_vanw|9 years ago|reply
If you want a simpler problem, how is it different from an ETF that tracks the price of gold?
[+] [-] zby|9 years ago|reply
This is not entirely accurate - it does not take into account the fact that there is a non-zero probability that a transaction already recorded on Blockchain is later removed from the canonic Blockchain branch.
[+] [-] nicky0|9 years ago|reply