Quote from: Neo.op on April 14, 2014, 12:55:13 PM

Quote from: Invest Bitcoin on April 14, 2014, 07:26:52 AM

Quote from: kittucrypt on April 12, 2014, 08:22:30 PM

Here is a numeric example to highlight flaw in your so called "business plan".

Lets say I send you 10 BTC at current market price to invest. Now you cant invest BTC in any guaranteed return scenario. You have to invest the FIAT and like you said you choose to invest them in govt securities in India. Thus, you will go ahead and convert 10BTC-> INR and at current rates that would come to be around 250,000 INR.

Now lets say you put this money in whatever investment you intend to and generate a 6% return. Which means you will have 15,000 INR as retrn or 265,000 as total cash on hand.

Now you have to give me a 6% return on my BTC, which means you have to give me 10.6 BTC back. The ONLY and I stress the ONLY way you will be able to do that is if BTC->INR exchange rate does not change. Even if BTC appreciates by 10% to say 27,500 , which is sooo much possible, you will need to cough up 291,500 to give me back my 10.6 BTC. Hell you will need 275,00 to even give back my 10 BTC. How will you get the difference?

Your plan is exposed to a significant exchange rate risk, which you are not even taking into account.

I suggest members to do their math before investing in this. I am not calling this scam. I believe its just poor investment

Our effort lies in protecting the current value of BTC. In the example that you've quoted, what we would do is convert the 10 BTC at the time of investment to INR based on BTC-e prices and invest the same into the plan of your choice. Let's say you choose the plan which gave you a return of 6% - in that case you get 6% over and above on the INR value at the time of conversion, which means that you would get INR 2,65,000 in total at the end of the deposit term (using your example)

The final payout will happen either in BTC or fiat depending on your choice at the end of the term.

Regards
Invest Bitcoin

So what will be the payout in case we follow kittucrypt's example, if i choose for it to be in BTC -- considering you are asking for BTC investment? 2,65,000/27,500 = 9.363636 ...a 6.4% loss...why will someone invest with you again? Please dont say "protecting the current value of BTC" .....cause what happens if BTC value goes down below the current rate? Say 22,500 --- will you send me 11.78 BTC? Or just the 10.6 BTC?

On top of what Neo said...Why would I pay you to convert my exposure in BTC to exposure in INR, when in all likelihood, the odds of getting returns higher than 6% on BTC are much much higher. What you are really doing is protecting the investments in INR and not in BTC. Infact, even that's not the case because inflation in India is much higher than those fixed income returns.

You not only do not understand the exchange rate risk, your fund provides no real value to investors. On top of it the compliance issues that someone else also pointed above, makes this investment an almost sure shot loosing preposition.

The ONLY way a BTC investor would gain is if after investing in your venture, the BTC price goes down. And if an investor is willing to take that bet, he might be better off by selling his BTC.