Friday, May 26, 2017

Wall Street to Put ‘Hundreds of Millions’ Into Bitcoin

SecondMarket CEO Anticipates Three Waves


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Anyone that has followed the Bitcoin exchange rate this years knows that the value of Bitcoin has soared to heights nearly unimaginable just 12 months ago. While critics argue that such a rapid price increase is a sure sign of a bubble, Bitcoin advocates point to the fact that Bitcoin is a paradigm-changing, new technology that is gaining widespread acceptance and adoption. With each passing week, more and more evidence mounts that many financiers on Wall Street are joining the latter camp.

Barry Silbert, the founder and chief executive of SecondMarket, an online platform that allows its users to trade private company stocks, is quoted by Entrepreneur magazine as stating, “We’re three to six months away from Wall Street dollars moving into Bitcoin in a big way.”

If he is correct – and the evidence suggests that he is – the incredible gains in the Bitcoin price look set to continue and possibly accelerate in 2014.


“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.

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.”

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