Daddy, daddy, is that Bozo the Clown?
No dear, that's Bozo the Fund ManagerFrom the Wall Street Journal:
An ETF-type investment, full of risks, is struggling for acceptance
If you have an online brokerage account, you can now buy shares in a fund that aims to track the price of the digital currency called bitcoin. Just don’t expect a smooth ride.
Bitcoin is a highly speculative investment—the kind most financial advisers say investors should only buy into with money they can afford to lose. But some analysts think the new fund could bring the digital currency a step closer to broader acceptance by investors. For that to happen, the fund will have to overcome some early difficulties.
Bitcoin Investment Trust started trading on the OTCQX market on May 4 under the ticker symbol GBTC. It isn’t technically an exchange-traded fund, but it’s designed to work like one. (The Securities and Exchange Commission is reviewing an application for what would be the first official bitcoin ETF, the Winklevoss Bitcoin Trust.)
Bitcoin Investment Trust is small, with a net asset value of only $35.6 million at the end of June and only 1.4 million shares outstanding. Its tracking of bitcoin’s price has been inconsistent, and there is a wide spread between the share price and the value of the underlying assets. Oh, and by the end of last month the share price had fallen 28% from its $42 close on the first day of trading, to $30.12.
Sparking interest? Still, some analysts think the fund could prompt some speculative interest in bitcoin, like the launch of gold ETFs did in precious metals a decade ago.
Gil Luria, an analyst with brokerage firm Wedbush Securities who has followed the bitcoin market since its infancy, sees Bitcoin Investment Trust as part of bitcoin’s move toward the mainstream of finance. Other recent signs of acceptance on Wall Street include the decision of the New York State Department of Financial Services to regulate itBit Trust Co., a small bitcoin exchange, and research from Goldman Sachs Group Inc. claiming a place for bitcoin in “the future of finance.”...MORE
