Published On: Thu, Jan 9th, 2014

Barry Silbert Launches One Of The World’s First Bitcoin Funds

Silbert, CEO of SecondMarket Investment  has established the Bitcoin Investment Trust to place dealing in the digital currency within easier reach for those who have caught on to  the concept.

Barry Silbert

Barry Silbert believes in Bitcoin, and to prove his point has succeeded in accumulating  around $65 million’s worth  of the digital currency for his new initiative, the Bitcoin Investment Trust  just a few  months after the trust went into operation.

Silbert, acknowledged as is a global expert in the trading of non liquid assets, putting his virtual money where his mouth is in establishing the trust, and already has close to 100 investors dealing in Bitcoin’s,  prominent among them both hedge fund traders and private family investment firms.

To feed the demand Barry has been buying up Bitcoins or BITS as they are known by those in the niche from a wide range of sources, taking in virtual currency exchanges, BIT merchants and even members of the public who picked up some BITS in their early days mostly for their novelty value,  and are now anxious to cash in their profits.

However, due to the unrelenting demand for the currency, the Bitcoin Investment Trust are increasingly turning to what are known as “miners, ”  to buy  digital currency. Miners are licensed to generate fresh supplies of BITS, through interacting with Bitcoin’s own software.

The value of the  BIT is ascertained by supply and demand regulated by an electronic traded fund (EFT), which, according to Barry Silbert, is strongly reminiscent of how gold bullion is valued. However, unlike gold, BITS cannot be publicly traded, a situation that is liable to continue far off into the future.

For that reason Silbert took the decision  not to wait for SEC approval  to launch SecondMarket‘s fund, especially in the light of a recent change in SEC legislation.

The legislation, known as the JOBS Act, repealed the prohibition of any form of  advertising to trade in BITS  by private investment companies. A change which has made a tremendous difference to Silbert’s efforts to attract new customers to his fund.

Silbert was quick off the mark when the implications of the JOBS Act began to set in, with the  new advertising freedoms that it would bring.  Freedoms which have  allowed SecondMarket to establish  a website that explains the advantages of the  fund to potential investors as well as  displaying  and updating the Bitcoin Investment Trust’s  performance as well as  fluctuations in the BIT.

bitcoin-logo-

Since the JOBS Act came into force in October the value of the BIT has shot up in value darmatically over the past six months the price of a Bitcoin has shot up and looks likely to keep on rising for the time being. Fluctuations in BIT value are many, often on an hourly basis, but the the current picture shows that a BIT was valued at around $350 in November and currently it is sitting at three times that amount after San Francisco’s Zynga recently announced their intentions to begin accepting the virtual currency for some of its online social games.

Despite that dramatic rise, the history of the BIT has been marked with many dramatic peaks and troughs, and Barry Silbert has made it company policy to discourage  individuals who might be inclined to stretch their finances in the hope of making a quick killing. To participate in the Bitcoin Investment Trust, investors have to prove that they have working capital of  $1 million, or an annual income exceeding $200, 000.

The minimum buy-in amount for the fund  is $25, 000, with no mention of a maximum investment ceiling at this stage. Silbert has emphasized that SecondMarket makes every effort to  determine whether a potential investor is financially and emotionally prepared to cope with the risks that will be inherent in  investing in Bitcoin.

Bitcoin, which exists as strings of computer code, was introduced in 2008 by a programmer or group of programmers under the name Satoshi Nakamoto. Every day, Bitcoin “miners” create new Bitcoins by using ever-faster computers to solve complex mathematical problems.

 

Barry Silbert is regarded as being one of the world’s leading authorities  on the topic of trading  non liquid assets and has been published in a number of the world’s  leading business journals,  including BusinessWeek, Forbes and Fortune, the Financial Times, the New York Times, the Wall Street Journal, and  USA Today, as well as being interviewed on  Bloomberg News, Business News Network and Fox Business News.

Silbert graduated with  a Bachelor of Business Administration degree from Emory University’s  Goizueta Business School.

After graduating, Barry began his professional career  working with merchant bankers Bear Stearns later moving to  Smith Barney and finally moving to Rydex Funds before establishing Second Market Holdings in 2004.

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