Bitcoin Investment Trust poised to start trading.


While the Winklevoss twins have been mired in regulatory issues in trying to launch their Bitcoin ETF, another Bitcoin fund appears set to skip all past the bulk of the review process and could start trading in the next few days.

On September 25, 2013, the Bitcoin Investment Trust was launched on SecondMarket, a platform for accredited investors which allows the purchase and sale of unregistered securities, a means to allow wealthy (“accredited”) investors to gain exposure to Bitcoin without having to concern themselves with how to securely hold it. For that, the administrators of the trust charge a 2% management fee.

For those that remember, SecondMarket, which was founded by Barry Silbert, was at the center of the hype in the run-up to Facebook’s IPO, as investors clamored to get their hands on Facebook’s shares, in anticipation of a post-IPO spike in share price, which failed to materialized.

Now, some investors are moving to sell their shares into the open market, which is having the effect of causing the Bitcoin Investment Trust to leapfrog the Winklevoss Bitcoin Trust as being the first publicly traded Bitcoin investment available to the general public. Instead of having to slowly slog through the SEC’s approval process as the Winklevoss twins have been forced to do, the Bitcoin Investment Trusts path to the public markets is through a regulatory ruling that allows investors in private funds to sell their shares into the public market after holding those shares for a year or longer.

While there are many in the Bitcoin community who are cheering this event, ostensibly on the hopes that interest in the Trust will cause the price of Bitcoin itself to go up, I’d take more reserved position – ETF and Investment Funds generally track the performance of the assets they hold, rather than driving the performance of those assets. Regardless, that’s a discussion for another day… For today, we can only speculate as to when the first shares of the Bitcoin Investment Trust will start trading, and how much longer until shares of the Winklevoss Bitcoin ETF started trading as well.

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