Quote from: DeathAndTaxes on July 04, 2013, 07:39:11 PM

Quote from: DrGregMulhauser on July 04, 2013, 08:27:20 AM

Just to clarify a little, this is incorrect. While the original ratio will be 0.2 BTC per share, that will decay over time, and the trust will spend a portion of those Bitcoins. There is nothing sinister or odd about this -- it is, on the contrary, common and entirely expected by investors.

Agreed and I misunderstood although (possibly my reading of) your wording seems to indicate a sinister intent.

Quote

their 'company' will then be able to pay them wages/dividends and generally bleed down the value of BTC whilst only they benefit from it. it's a clever piece of latteral thinking, but not a good thing for a technology whose best outcome would be it stabalised into a currency

The company is able to bill the trust for the small management fee (unstated but 0.5% annually is a common amount) and the NAV will decline over time but I wouldn't call it "only they benefit". If there is no benefit to shareholders (of the trust not the management company) then they won't buy it. I mean it is an open market. Investors will weigh the value/utility (if any) of the fund vs the cost (in terms of annual management fee). They buy because the value outweighs the cost.

I would argue there is a lot of potential utility here:

* A company which had a margin brokerage account could accept BTC for goods and hedge volatility between time of acquiring and time of selling by selling short the fund.
* Speculators looking to go long could use margin to extend their leverage at lower cost and risk compared to systems like bitfinex.
* Long term holders of physical BTC (in cold storage) could sell covered calls against the fund for USD cashflow without needing to periodically sell off BTC on exchanges of unknown risk.
* Buying calls and puts would be a more sophisticated way of trading Bitcoins without dealing with entities of unknown trust.
* Someone looking to borrow BTC but sell them for USD could hedge out the currency risk partially or fully through the use of options. If nothing else buying way out of the money calls would be a method of capping currency risk.

Our members' abilities to provide direct, access-related services beyond their institutional walls are inevitably limited. However, we can collaborate with other institutions to ensure that no gaps in our access services are left unfilled; we can be sensitive to access restrictions that may be hindering portions of our current or prospective campus populations and can work to overcome those hindrances; and we can support government and private efforts to expand effective access. We are connected to the growing knowledge economy...Ira