Hello, welcome to episode 23 of The Bitcoin Game, I'm Rob Mitchell.
I decided to experiment with buying Bitcoin a new way; I bought shares of the Bitcoin Investment Trust. The trust is the first, and I believe the only current way a U.S. citizen can add an investment in Bitcoin to a recognized retirement account. You can buy shares of the Bitcoin Investment Trust with symbol GBTC using a standard brokerage account, just like buying a stock or ETF. You could argue that one doesn't actually own Bitcoin with these shares, since a third party holds the private keys, and there are inherent risks — just ask Patrick Byrne. But the fund, and this episode, are likely skewed slightly towards people interested in investing in Bitcoin for the long term, using an investing platform they are already familiar with, while shielding themselves from the learning curve still required to hold Bitcoin securely.
In today’s episode I speak with Michael Sonnenshein, director of Sales & Business Development for Grayscale, one of several companies founded by Barry Silbert. Based on Grayscale's first quarter financials, the total number of Bitcoin Investment Trust shares sold was approximately 1.41 million, which has a value of over $37 million dollars (at the current rate of $265/Bitcoin).
Potential fund buyers need to make sure they understand the risks associated with Bitcoin, investing in Bitcoin using a fund, as well as the fees and premiums that are associated with buying this fund.
Would you ever buy shares of the Bitcoin Investment Trust, or recommend it? Please let me know your thoughts by commenting below!
7/19/16 Update: For anyone who bought GBTC (Bitcoin Investment Trust) back when this episode aired, the gains have substantially surpassed a 100% investment in Bitcoin. I will go on a limb and say this is because the demand for GBTC has been a lot greater than the supply (probably due to mainstream and retirement investors wanting Bitcoin exposure). So the market price of GBTC is way above the net asset value of the Bitcoin that the trust holds. With two new Bitcoin ETFs expected in coming months/years, it's possible that new Bitcoin investment vehicles will cool off the demand for GBTC, so I'm not sure if buying GBTC on the open market is wise at current values. However, if you're a "qualified investor" who is up for a large initial investment and year waiting period, you can buy GBTC at par with the current price of Bitcoin, so that may be a smarter investment (if you believe in Bitcoin, and don't think we'll have a financial/societal "reset" before then). Of course, anything could happen to Bitcoin and/or GBTC. And be very aware, I'm definitely not an investment advisor, this is just my amateur read of the situation.
Listen for the magic word, and submit it to your LetsTalkBitcoin.com account to claim a share of this week's distribution of LTBcoin. Listeners now have a full week from the release date to claim a magic word. The magic word for this episode must be submitted by 1:00 pm Pacific Time on August 21, 2015.
Patrick Byrne on "owning" stock, via Reason
Bitcoin Investment Trust
Michael Sonnenshein’s Twitter
Barry Silbert’s Twitter
DCG (Digital Currency Group)
Genesis (Over The Counter Bitcoin Trading)
Bitcoin Investment Trust (GBTC) Price Chart
What’s an Accredited Investor?
Bitcoin Keychains by Bkeychain
You’ve seen these keychains on dozens and dozens of websites, it’s about time you had one of your own! These substantial metal keychains make great conversation starters, and they also make great gifts to or from Bitcoiners. You can find a list of online retailers at Bkeychain.com, and several support Bitcoin so much, they don’t even accept fiat currency. So what are you waiting for?
All music in this episode was created by me, or with friends and family. Ganesh Painting Company is the name of one of the jam bands I feature live recordings of regularly. Some of the musicians you're hearing are Mike Coleman, Rick Marshal, Steve Lunn and Mark Denham. Some music loops you hear were created using Animoog (by Moog Music) and Figure (by Propellerhead). Please contact me if you want more info about any music you hear on the podcast.
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Thanks for listening!
Bitcoin tip address: 1G8HDg5EsPQpamKYS2bDya9Riv9xv1nVo5
The Bitcoin Game box artwork created from an illustration by Rock Barcellos.