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SecondMarket CEO: Wall Street Will Put 'Hundreds of Millions' Into Bitcoin
http://www.entrepreneur.com/article/230346
Wall Street is getting ready to dive into Bitcoin, pouring vast amounts of institutional and investor money into the digital currency that has been labeled a "bubble" by former Federal Reserve chairman Alan Greenspan and which not long ago was seen as the sole preserve of crypto-geeks, monetary-theory wonks and anti-government types.
So says Barry Silbert, founder and chief executive of SecondMarket, the online platform that allows its users to trade private company stocks. "We're three to six months away from Wall Street dollars moving into Bitcoin in a big way," he says.
Silbert should know: Earlier this fall, he launched the Bitcoin Investment Trust, the first investment vehicle allowing institutional investors to put money into the Bitcoin market while avoiding the hassle of personally holding the currency. The trust is open only to accredited investors, and the minimum investment is $25,000.
Speaking on Tuesday night at a private dinner for Bitcoin cognoscenti in New York, Silbert said he was astonished by the BIT's performance. "We launched six weeks ago and we're up to $70 million. That blows my mind. We were hoping to get to $10 million by the end of the year."
The value of the BIT derives entirely from the price of Bitcoin; it has benefited in recent weeks as Bitcoin soared north of $1,200. Because of a recent dip, the net assets of the trust now stand at about $63 million, which means it is holding that dollar value in bitcoins.
Related: SecondMarket Establishes New Bitcoin Trust for Accredited Investors
Silbert says he meets frequently with hedge fund workers, traders at large financial institutions and others who want to gain a better understanding of digital currencies and figure out how to capitalize on them. He reckons that Wall Street will enter the Bitcoin market in roughly three waves. The first is already beginning, and it's taking the form of IRA money. Customers with self-directed IRAs at Fidelity, Pensco Trust Company, The Entrust Group and Millenium Trust Company are now able to invest some of their money in Bitcoin via the BIT. Silbert expects most other IRAs to approve the BIT as an investment vehicle before the second quarter of next year, in response to growing interest from their customers.
Also in this first wave will be clients of the wealth-management arms of Wall Street banks. Silbert says the BIT is in conversations with "several major banks" and he expects the trust to be an approved product on their wealth-management platforms within the first half of 2014.
The second wave will be hedge funds and other institutional investors. "The principals that work at all those firms are starting to invest personally in the BIT," Silbert says. Anecdotally, he adds, it's clear they are investing in the Bitcoin market through other platforms as well. With traders, portfolio managers and executives all gaining interest, it appears to be only a matter of time before their firms follow suit and take a position in the digital currency.
The third wave will be Wall Street banks themselves, motivated purely by profit, says Silbert. "These banks already have large teams trading dollars and euros and yen and gold. Ultimately, Bitcoin is no different than those" as far as forex and commodities traders are concerned, he says. And indeed, currency strategists at Bank of America issued a note to clients last Thursday talking up Bitcoin's potential and analyzing its fair market value.
While most institutional investors are keeping mum on Bitcoin for the time being, the head of one firm has been outspoken about his faith in the cryptocurrency. Michael Novogratz, the co-chief investment officer of macro funds at Fortress, plumped for Bitcoin at a conference held in New York on Oct. 24. He recommended that investors "put a little money in Bitcoin," saying its value would appreciate significantly over the next few years.
At the time, the price of a single bitcoin was less than $200 on most exchanges. "I have a nice little Bitcoin position," Novogratz said at the conference. "Enough that I'm smiling that it doubled." One can imagine how that smile must have widened in the weeks since.
But it's hard to say where the price will be a month or six months from now. Although right now Silbert is happy to see Bitcoin performing above his expectations, in the near term "the price volatility is only going to get worse," he says. "We haven't seen anything yet."
He added, "Once Wall Street starts putting money into Bitcoin -- we're talking about hundreds of millions, billions of dollars moving in -- it's going to have a pretty dramatic effect on the price."
Wall Street is getting ready to dive into Bitcoin, pouring vast amounts of institutional and investor money into the digital currency that has been labeled a "bubble" by former Federal Reserve chairman Alan Greenspan and which not long ago was seen as the sole preserve of crypto-geeks, monetary-theory wonks and anti-government types.
So says Barry Silbert, founder and chief executive of SecondMarket, the online platform that allows its users to trade private company stocks. "We're three to six months away from Wall Street dollars moving into Bitcoin in a big way," he says.
Silbert should know: Earlier this fall, he launched the Bitcoin Investment Trust, the first investment vehicle allowing institutional investors to put money into the Bitcoin market while avoiding the hassle of personally holding the currency. The trust is open only to accredited investors, and the minimum investment is $25,000.
Speaking on Tuesday night at a private dinner for Bitcoin cognoscenti in New York, Silbert said he was astonished by the BIT's performance. "We launched six weeks ago and we're up to $70 million. That blows my mind. We were hoping to get to $10 million by the end of the year."
The value of the BIT derives entirely from the price of Bitcoin; it has benefited in recent weeks as Bitcoin soared north of $1,200. Because of a recent dip, the net assets of the trust now stand at about $63 million, which means it is holding that dollar value in bitcoins.
Related: SecondMarket Establishes New Bitcoin Trust for Accredited Investors
Silbert says he meets frequently with hedge fund workers, traders at large financial institutions and others who want to gain a better understanding of digital currencies and figure out how to capitalize on them. He reckons that Wall Street will enter the Bitcoin market in roughly three waves. The first is already beginning, and it's taking the form of IRA money. Customers with self-directed IRAs at Fidelity, Pensco Trust Company, The Entrust Group and Millenium Trust Company are now able to invest some of their money in Bitcoin via the BIT. Silbert expects most other IRAs to approve the BIT as an investment vehicle before the second quarter of next year, in response to growing interest from their customers.
Also in this first wave will be clients of the wealth-management arms of Wall Street banks. Silbert says the BIT is in conversations with "several major banks" and he expects the trust to be an approved product on their wealth-management platforms within the first half of 2014.
The second wave will be hedge funds and other institutional investors. "The principals that work at all those firms are starting to invest personally in the BIT," Silbert says. Anecdotally, he adds, it's clear they are investing in the Bitcoin market through other platforms as well. With traders, portfolio managers and executives all gaining interest, it appears to be only a matter of time before their firms follow suit and take a position in the digital currency.
The third wave will be Wall Street banks themselves, motivated purely by profit, says Silbert. "These banks already have large teams trading dollars and euros and yen and gold. Ultimately, Bitcoin is no different than those" as far as forex and commodities traders are concerned, he says. And indeed, currency strategists at Bank of America issued a note to clients last Thursday talking up Bitcoin's potential and analyzing its fair market value.
While most institutional investors are keeping mum on Bitcoin for the time being, the head of one firm has been outspoken about his faith in the cryptocurrency. Michael Novogratz, the co-chief investment officer of macro funds at Fortress, plumped for Bitcoin at a conference held in New York on Oct. 24. He recommended that investors "put a little money in Bitcoin," saying its value would appreciate significantly over the next few years.
At the time, the price of a single bitcoin was less than $200 on most exchanges. "I have a nice little Bitcoin position," Novogratz said at the conference. "Enough that I'm smiling that it doubled." One can imagine how that smile must have widened in the weeks since.
But it's hard to say where the price will be a month or six months from now. Although right now Silbert is happy to see Bitcoin performing above his expectations, in the near term "the price volatility is only going to get worse," he says. "We haven't seen anything yet."
He added, "Once Wall Street starts putting money into Bitcoin -- we're talking about hundreds of millions, billions of dollars moving in -- it's going to have a pretty dramatic effect on the price."
Re: Which poster on this speculation board has been most consistently WRONG?
The great Edward50:
Quote from: Edward50
What surprises me about the bitcoin price is how well it is holding around $13 dollars. I guess most bitcoin holders are rich tech savy people, who would rather sit with their coins to their death rather than sell them.
This is probably the reason why the price has not fallen. I can see this going on for a while, and bitcoin holders have already tasted the $20+ dollar range. Most are insane and blind enough in the idea to think each bitcoin is worth a small country. And shit, if I actually owned even 1 bitcoin, maybe I would be insane and blind also. Who does not want to be filthy rich.
Scaracity and hoarding is the only tool that bitcoin bulls have.
Most people interested in buying know that the bitcoin is not worth even worth $13 dollars a coin. They will be much more careful with their dollars.
So the price will be up to the horders not giving in and selling too cheaply. It will not be up to people actually needing or demanding bitcoin for any useful purpose.
I say in the end the price will be lower because every day there are still thousands of bitcoins being produced. With each passing day it will be a test on how long can you hold out when it becomes more obvious that the price is not going any higher.
This is probably the reason why the price has not fallen. I can see this going on for a while, and bitcoin holders have already tasted the $20+ dollar range. Most are insane and blind enough in the idea to think each bitcoin is worth a small country. And shit, if I actually owned even 1 bitcoin, maybe I would be insane and blind also. Who does not want to be filthy rich.
Scaracity and hoarding is the only tool that bitcoin bulls have.
Most people interested in buying know that the bitcoin is not worth even worth $13 dollars a coin. They will be much more careful with their dollars.
So the price will be up to the horders not giving in and selling too cheaply. It will not be up to people actually needing or demanding bitcoin for any useful purpose.
I say in the end the price will be lower because every day there are still thousands of bitcoins being produced. With each passing day it will be a test on how long can you hold out when it becomes more obvious that the price is not going any higher.
Ah, Edward50. You've been a bear since 2011. I remember your early posts!
For example:
You were right in the short term, very very wrong in the long term.
For example:
Quote from: Edward50
Yes it is finally coming down. It does not make sense at $20. There is no value currenctly in owning this currency other than the long term potential if it does ever make a valid currency.
If you are willing to wait some years and hold it as an investment, it should be priced less than $10 dollars because of the high risk of it failing.
Who ever pays $20 or higher now as a long term investment is way overpaying because of all the risk.
If you are willing to wait some years and hold it as an investment, it should be priced less than $10 dollars because of the high risk of it failing.
Who ever pays $20 or higher now as a long term investment is way overpaying because of all the risk.
You were right in the short term, very very wrong in the long term.
http://www.reddit.com/r/Bitcoin/comments/1sk6ov/china_baidu_pause_bitcoin_now_i_have_a_great_news/
Maybe this is partly responsible for the recent price rise?
Quote
You all know that jiasule, which is a very little branch of Baidu, paused Bitcoin a few days ago, Yes?
Now I tell you, hao123.com, which was bought by Baidu and have about HALF traffic of baidu.com, now added a link of bitcoin at its homepage and built a special section as www.hao123.com/bitcoin/ !
My friends, do you know the price you should pay if you want to put your website on the homepage of hao123.com? more than 10,000 USD per day!
This time, the price of bitcoin is going to MOON!
Now I tell you, hao123.com, which was bought by Baidu and have about HALF traffic of baidu.com, now added a link of bitcoin at its homepage and built a special section as www.hao123.com/bitcoin/ !
My friends, do you know the price you should pay if you want to put your website on the homepage of hao123.com? more than 10,000 USD per day!
This time, the price of bitcoin is going to MOON!
Maybe this is partly responsible for the recent price rise?
Re: When do you expect and when do you want BTC to go over 30 bucks again?
To be honest, I don't think the BTC price will ever go over 30 again. Never ever.
Good guess but you were wrong.
India's first Global Bitcoin Conference is soon - prices to go up even more?
http://www.globalbitcoinconference.com/
I think this could lead to more adoption if India becomes a new market like China is.
I'm hoping to see a rise to at least 25 USD after the difficulty rises in the next day or two, although that may be wishful thinking on my part.
Definitely not wishful thinking!
48 hour wait.I have withdrawn from MtGox 1.2BTC 22,5 hours ago and the transaction still hasn't been broadcasted to the blockchain... Has anybody else been having the same problem?
Can you find your transaction here?I can find my transaction there.
39 hours, still waiting.
Over 24 hours now for my Bitcoin withdraw from Mtgox, still no Bitcoins.
6 hours here, and it's not on the block-chain yet.
Same with mine. I made some more withdrawals today that went through, but the original one is lost in space.
http://www.bloomberg.com/news/2013-11-18/u-s-agencies-to-say-bitcoins-offer-legitimate-benefits.html
"The Department of Justice and Securities and Exchange Commission are telling a U.S. Senate committee that Bitcoins are legitimate financial instruments, boosting prospects for wider acceptance of the virtual currency."
"Ben Bernanke, chairman of the Federal Reserve, is also weighing in on the hearing, saying that it has no plans to regulate the currency."
Woohoo!
"The Department of Justice and Securities and Exchange Commission are telling a U.S. Senate committee that Bitcoins are legitimate financial instruments, boosting prospects for wider acceptance of the virtual currency."
"Ben Bernanke, chairman of the Federal Reserve, is also weighing in on the hearing, saying that it has no plans to regulate the currency."
Woohoo!
screw worrying! I'm buying more!
Yup, buy, mine, and hoard is what I'm doing.
I wish I did this a lot more since 2011!