Make money shorting Bitcoin, and It doesn't even have to GO DOWN
BUBBLE this BUBBLE that, all you hear about Bitcoin is that it is in a bubble. It might be, everything has booms and busts.
I have not found anyway to short Bitcoin itself yet, but I just stumbled across a fund, a bitcoin fund. One that look like a short, and not for what it holds, but how much it holds of it.
The Fund is GBTC.
Shares of it trade for 1005 usd at the close of the day.
The fund has $830 million in bitcoin
The fund has a 2% expense rate.
O ya and the fund trades at 1.8 billion
That is roughly 130%
So there is a lot of room for the fund to drop, without Bitcoin even moving. Fair value, about 550 a share.
Granted I am not this smart to figure this all out I read this article.
http://www.marketwatch.com/story/the-wall-street-investor-who-sank-valeant-thinks-a-bitcoin-fund-is-the-most-dangerous-2017-08-31
So this price discrepancy has been duly noted in the media before and the fund has sold off some. But I think the price premium of the fund over buying BTC yourself is pretty simple. You have someone you can sue if something goes wrong and the coins get hacked. Whatever large company is backing that fund will payout to the investors in the event they get hacked. Also the investors may be too lazy or scared to procure coins themselves so they are content paying a large price premium. It is a travesty but not a good short opportunity in my opinion.
I agree, but if people knew how easy it was to buy through coinbase, they would never do it. Also I have been defrauded by a stock, and it takes years to settle, and most of the time the money recovered goes to the government for their fees.
Thank you for posting @bigram13.
Enjoyed the article and information.
Cryptospace gets more interesting everyday.
All the best. Cheers.
Thanks, and ya it is moving is hyper speed.
I am not a fan of Bitcoin funds. The whole point was for it to be a completely new idea for the people. It seems like the big business and finance people are getting their sticky fingers into Bitcoin. Then the fun of it may end.
Ya, it was suppose to be a peer to peer transaction, now everyone wants it.
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@bigram13, great article.
In addition, there are a couple interesting points about the structure (1) the tax implications of just buying/holding "stock" in this open trust and how it could create a tax return impact each year for its US holders, even if the holder doesn't sell their stock (unlike other stocks in c corporations where the gain/loss usually occurs only when the stock is sold or income is created through certain distributions & dividends). I don't expect the typical casual/retail investor would anticipate this impact to their return. And of course more relevant to your article: (2) the potentially negative valuation implications if GBTC was re-characterized as a corporation for income tax purposes (yahoo-alibaba anyone?). I go a little deeper on these issues in my blog.
Well ya everything is so new, also how would you report taxes on steemit. Capital gains or income. I have heard arguments for both.
I will be writing about that, receiving the SBD and selling/exchanging it -likely two separate events one is ordinary and one is capital (or maybe even like kind). Steem Power is even more complicated.
In further news, GBTC fell on the open more than 15%!
That will be a interesting read, will check it out. Ya it was down good. I wish it had some options on it.
good job, well researched, thanks
great work
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Take a look at deribit.com. They allow shorting through their bitcoin futures and options. The entire platform is bitcoin, which is pretty neat.
Be sure to take a look at the elliott wave count to see where we are and where we're likely headed: https://steemit.com/bitcoin/@stocks29/bitcoin-bearish-case-elliott-wave-update-price-is-progressing-as-expected
Awesome, will get over and take a look.