David Rabahy



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Hero MemberActivity: 709Merit: 500 Re: SecondMarket Bitcoin Investment Trust Observer March 26, 2015, 07:01:49 PM #1145 Investor Letter  March 26, 2015 info@grayscale.co

OTCQX® Update



We are pleased to announce that the Bitcoin Investment Trust (BIT) has been approved by OTC Markets for eligible BIT shares to be quoted on OTCQX®, the top marketplace operated by OTC Markets Group, under the Alternative Reporting Standards. For information on transferring your shares to your brokerage account, please review the material under Steps to Sell Shares 



As a reminder, it is important to note the price of shares traded on OTCQX® will be established by market bids and asks and will not necessarily reflect the BITs NAV/share or the spot price of bitcoin. In addition, no assurances can be given as to whether an active public secondary market for the shares will develop or be maintained.



As always, qualified accredited investors may choose to invest in shares of the BIT directly through the BITs ongoing private placement at the daily NAV/share1. Please note that BIT shares purchased through the ongoing private placement are subject to significant resale and transferability limitations and will not be eligible to be sold on OTCQX® until held for more than one year. BIT shares purchased on OTCQX®, however, are freely tradable once purchased.



Steps to Sell Shares on OTCQX®



Investors who have held BIT shares for at least 12 months will be eligible to sell those shares on

OTCQX®.



Shareholders should have their shares transferred electronically to their brokerage account as follows.



Our transfer agent, Continental Stock Transfer & Trust, will be providing each eligible shareholder a share ownership statement. You will receive an e-mail from us in the coming days with a copy of this statement.

The statement will include the details necessary to have your shares electronically transferred via Direct Registration System (DRS) to the broker of your choice. Details may slightly vary by brokerage firm, so we encourage you to reach out to your broker to complete the transfer.

Once your shares have been transferred to your brokerage account, you will be able to place an order to sell your shares.

Shareholders may continue to hold their shares in DRS book-entry form with Continental if you so choose.

If you have any questions regarding your share ownership statement, if your address has recently changed, or if you have any other questions at this time regarding transferring your shares to your own brokerage account, please contact Continental at (800) 509-5586 or (212) 509-4000.

As always, please do not hesitate to contact us with any questions or concerns about this process.



To the extent that you do not already have a brokerage account and would like to establish one, we can put you in contact with Merriman Capital, the broker dealer that is both the BITs initial market maker and its Designated Advisor for Disclosure (DAD).





Should you have any questions or comments regarding this information, please feel free to contact us at





1 The BITs NAV/share will be published each U.S. business day on the sponsors website: We are pleased to announce that the Bitcoin Investment Trust (BIT) has been approved by OTC Markets for eligible BIT shares to be quoted on OTCQX®, the top marketplace operated by OTC Markets Group, under the Alternative Reporting Standards. For information on transferring your shares to your brokerage account, please review the material under Steps to Sell Shares As a reminder, it is important to note the price of shares traded on OTCQX® will be established by market bids and asks and will not necessarily reflect the BITs NAV/share or the spot price of bitcoin. In addition, no assurances can be given as to whether an active public secondary market for the shares will develop or be maintained.As always, qualified accredited investors may choose to invest in shares of the BIT directly through the BITs ongoing private placement at the daily NAV/share. Please note that BIT shares purchased through the ongoing private placement are subject to significant resale and transferability limitations and will not be eligible to be sold on OTCQX® until held for more than one year. BIT shares purchased on OTCQX®, however, are freely tradable once purchased.Shareholders should have their shares transferred electronically to their brokerage account as follows.As always, please do not hesitate to contact us with any questions or concerns about this process.To the extent that you do not already have a brokerage account and would like to establish one, we can put you in contact with Merriman Capital, the broker dealer that is both the BITs initial market maker and its Designated Advisor for Disclosure (DAD).Should you have any questions or comments regarding this information, please feel free to contact us at info@grayscale.co or 212-668-6682.The BITs NAV/share will be published each U.S. business day on the sponsors website: www.grayscale.co

David Rabahy



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Hero MemberActivity: 709Merit: 500 Re: SecondMarket Bitcoin Investment Trust Observer March 26, 2015, 07:19:01 PM #1149 With a bid of $31.50 as compared to the closing yesterday of $23.70 we should sell short (effectively covered) and then close the short position as quickly as possible when BIT shares are transferred into the ETF. Free money.

bobabouey2



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Sr. MemberActivity: 248Merit: 250 Re: SecondMarket Bitcoin Investment Trust Observer March 26, 2015, 07:37:24 PM #1152



The asks are marked "u" which apparantly means an "unpriced indication of interest."



So there are retail customers playing around with high prices to see if someone bites, but it could also be there are brokers who do have shares to sell they are seeking quotes on. Its not clear to me if they have to have the shares available in order to list the as as "unpriced indication of interest."



http://finra.complinet.com/en/display/display_main.html?rbid=2403&element_id=4514&print=1 All the bids have the qualifier "u" after the market maker name, which means "unsolicited" customer indication of interest. I think this means it is not the market maker who is bidding as part of market maker activities, but it is one of their customers making the bid.The asks are marked "u" which apparantly means an "unpriced indication of interest."So there are retail customers playing around with high prices to see if someone bites, but it could also be there are brokers who do have shares to sell they are seeking quotes on. Its not clear to me if they have to have the shares available in order to list the as as "unpriced indication of interest."

Roy Badami



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Hero MemberActivity: 563Merit: 500 Re: SecondMarket Bitcoin Investment Trust Observer March 26, 2015, 07:39:53 PM #1153 Quote from: JorgeStolfi on March 26, 2015, 03:00:41 PM If I understand correctly the above file (from page 31 onwards), the BIT fund will no longer sell or redeem shares for dollars, only for bitcoins. That is, a broker gives 10 BTC to BIT, gets 100 BIT shares; or the reverse.



I think you're correct. Although at that time (and probably still now) the only broker acting to create shares in Bitcoin Investment Trust would have been SecondMarket. (Remember that legally, BIT and SecondMarket are separate entities.) Over time other brokers may get involved, so perhaps in future not all new money will have to flow through SecondMarket.



roy I think you're correct. Although at that time (and probably still now) the only broker acting to create shares in Bitcoin Investment Trust would have been SecondMarket. (Remember that legally, BIT and SecondMarket are separate entities.) Over time other brokers may get involved, so perhaps in future not all new money will have to flow through SecondMarket.roy

bobabouey2



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Sr. MemberActivity: 248Merit: 250 Re: SecondMarket Bitcoin Investment Trust Observer March 26, 2015, 07:47:03 PM #1154 Quote from: bobabouey2 on March 26, 2015, 07:37:24 PM



The asks are marked "u" which apparantly means an "unpriced indication of interest."



So there are retail customers playing around with high prices to see if someone bites, but it could also be there are brokers who do have shares to sell they are seeking quotes on. Its not clear to me if they have to have the shares available in order to list the as as "unpriced indication of interest."



http://finra.complinet.com/en/display/display_main.html?rbid=2403&element_id=4514&print=1

All the bids have the qualifier "u" after the market maker name, which means "unsolicited" customer indication of interest. I think this means it is not the market maker who is bidding as part of market maker activities, but it is one of their customers making the bid.The asks are marked "u" which apparantly means an "unpriced indication of interest."So there are retail customers playing around with high prices to see if someone bites, but it could also be there are brokers who do have shares to sell they are seeking quotes on. Its not clear to me if they have to have the shares available in order to list the as as "unpriced indication of interest."

I think the $199.5 bid at 1 just proved my point, or its someone who doesn't realize the fund is 1/10 of bitcoin!



And note the only broker without the "u" after their name is Merriman, which is the advisor for the fund.



I think the $199.5 bid at 1 just proved my point, or its someone who doesn't realize the fund is 1/10 of bitcoin!And note the only broker without the "u" after their name is Merriman, which is the advisor for the fund.

JorgeStolfi



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Hero MemberActivity: 910Merit: 1002 Re: SecondMarket Bitcoin Investment Trust Observer March 26, 2015, 08:06:38 PM #1156 Quote from: David Rabahy on March 26, 2015, 06:50:49 PM The company that runs BIT buys the bitcoins; investors do not. Investors buy shares of BIT. [ ... ] Personally I bought into BIT with Roth IRA monies



That was the case before last October. But now the procedures seem to have changed considerably. The company that manages the fund is now (?) Grayscale, and shares are traded through a hierarchy of brokers. From their financial report and filing dated 2014-09-30, pg. 31+, I understand that SecondMarket and Grayscale no longer take dollars and no longer buy or sell bitcoins. I understand that brokers must buy shares from Grayscale with bitcoins only, and when they redeem they will get bitcoins from Grayscale. Am I reading wrong? That was the case before last October. But now the procedures seem to have changed considerably. The company that manages the fund is now (?) Grayscale, and shares are traded through a hierarchy of brokers. From their financial report and filing dated 2014-09-30, pg. 31+, I understand that SecondMarket and Grayscale no longer take dollars and no longer buy or sell bitcoins. I understand that brokers must buy shares from Grayscale with bitcoins only, and when they redeem they will get bitcoins from Grayscale. Am I reading wrong? Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.

Roy Badami



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Hero MemberActivity: 563Merit: 500 Re: SecondMarket Bitcoin Investment Trust Observer March 26, 2015, 08:22:01 PM #1158 Quote from: JorgeStolfi on March 26, 2015, 08:06:38 PM Quote from: David Rabahy on March 26, 2015, 06:50:49 PM The company that runs BIT buys the bitcoins; investors do not. Investors buy shares of BIT. [ ... ] Personally I bought into BIT with Roth IRA monies



That was the case before last October. But now the procedures seem to have changed considerably. The company that manages the fund is now (?) Grayscale, and shares are traded through a hierarchy of brokers. From their financial report and filing dated 2014-09-30, pg. 31+, I understand that SecondMarket and Grayscale no longer take dollars and no longer buy or sell bitcoins. I understand that brokers must buy shares from Grayscale with bitcoins only, and when they redeem they will get bitcoins from Grayscale. Am I reading wrong?

That was the case before last October. But now the procedures seem to have changed considerably. The company that manages the fund is now (?) Grayscale, and shares are traded through a hierarchy of brokers. From their financial report and filing dated 2014-09-30, pg. 31+, I understand that SecondMarket and Grayscale no longer take dollars and no longer buy or sell bitcoins. I understand that brokers must buy shares from Grayscale with bitcoins only, and when they redeem they will get bitcoins from Grayscale. Am I reading wrong?

Bottom of p32 of the Interim Financial Report (linked from



Quote As of the date of this Disclosure Statement, SecondMarket, Inc. has signed a Participant Agreement with the Sponsor and the Trust and may create and redeem Baskets.





Bottom of p32 of the Interim Financial Report (linked from http://www.otcmarkets.com/stock/GBTC/filings ) says