Post
Topic
Board Securities
Re: Tistoni's BTC fund with 10% returns
by
tistoni
on 19/05/2014, 01:06:52 UTC
Project Listed on Crowdfunding Website in need of raising funds through a loan.
We bid on project, offering 20.0 capital at a rate of 7.6%.
Other investors also make their offers, undercutting each other.
Project listing ends, if project is fully funded, owner accepts the monies with smallest rates.

Next day, loan parts are distributed to investors.
We start earning interest on our loan part.
Option 1: We keep the loan part until maturity.
Option 2: We sell the loan part to other investors if they pay us some good premium

We list the loan part for sale. We offer it for 20.06.
Other investor comes, wants to buy our loan, pays us 20.06.
Project owner starts paying interest to other investor from now on, not to us.
We made a quick one time profit, we reinvest our capital into new projects listed.

From the sale, we got back our initial investment 20.0, plus 0.06.
From that, 0.05 goes to website as fee, we keep 0.01.
Considering that it took us 1 day to sell, we made a ((0.01/20)+1)^365 = 1.20 , around 20% annual return.

Key question: How to know in advance which projects will sell fast for a large premium?? Very difficult to tell.
For example, we may list our loan part for sale at 20.06.
Nobody buys it from us.....
We earn interest but it's only 7.6%, not 20% we could have earned by selling straight away.
In addition, there is the danger of defaulting and we may lose all our money.
Lesson: Gotta invest wisely.

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I was thinking of setting up a website, but with bitcoin all account management can be done even without a website. So it would be mostly informational. The only functionally I can think of is to ability to view your current balance. Deposits, Withdrawals, Keeping records can be all done via the bitcoin network.

With regard to shares, do you mean CryptoStocks? At first I thought there would be a common shared fund that everybody contributes to and gets earnings proportional to their investment, sort of like a mutual fund. The main problem is the Bitcoin Exchange fee which is needed to convert fiat to Bitcoin and vice versa. I could do dividend payments, but I'd imagine that people want to reinvest their earning until they want to withdraw everything. Anyway, let me know your thoughts.