Bitcoin Plaza

Monday, March 2, 2015

MGT Capital Investments, Tera Group to Create First Publicly Traded US Bitcoin Derivatives Exchange

MGT Capital Investments announced a planned merger with Tera Group, which operates the first regulated U.S. Bitcoin derivatives exchange. The merger will create the first publicly traded U.S. Bitcoin derivatives exchange.

As observed by The Wall Street Journal, this is a reverse merger where Tera will take a controlling stake in MGT. Tera doesn’t seem too interested in MGT’s gaming operations, so the operation is primarily a way for Tera to go public. In other words, Tera is buying a public listing on the stock market for its Bitcoin operations.

Tera has played a leading role in the development of Bitcoin derivatives. In September 2014, Tera launched TeraExchange, the first regulated U.S. Bitcoin derivatives exchange, and TeraBit, a spot Bitcoin price index based on real-time data from a number of Bitcoin exchanges. The TeraBit price index is used as the settlement rate for USD/Bitcoin derivatives transactions.

Tera is active in the Bitcoin space, which is booming. Forget the highly volatile dollar exchange rate of Bitcoin, the important parameters are the number/volume of Bitcoin transactions and the venture capital investments in the emerging Bitcoin industry, both of which are skyrocketing. Consumers spend bitcoin online, and investors bet on the innovative potential of Bitcoin and its underlying blockchain technology. Technology expert Peter Diamandis said Bitcoin is going from deceptive to disruptive, and listed Bitcoin among his top tech picks for 2015.

That should be interesting for investors, but currently only a few publicly traded companies and funds – including Overstock, Bitcoin Shop and the forthcoming Winklevoss Bitcoin Trust ETF – are active in the Bitcoin space. With this announcement, the new Tera-controlled MGT joins the select Bitcoin club.

Derivatives such as Tera’s forwards are the simplest way to expose investors to Bitcoin, especially those investors who prefer not to trade the digital currency itself – and are the easiest way to profit from the ups and downs of the bitcoin-dollar exchange rate.

In related news, former Goldman Sachs Executive Director Timo Schlaefer announced the launch of Crypto Facilities, a U.K. Bitcoin derivatives broker. This confirms the growing interest of institutional investors in the Bitcoin economy.

“The proposed merger with Tera gives immediate and future value to our stockholders, while creating a robust platform for the growth of the industry’s first publicly listed bitcoin derivatives exchange,” said H. Robert Holmes, Chairman of MGT’s board of directors. “The Bitcoin industry attracted over $400 million of investment capital from some of the world’s most prominent investors over the past 12 months; we see our move today as further progress in the broader adoption of the industry.”

“Growing consumer and merchant adoption of bitcoin is driving demand for regulated capital markets solutions,” said Christian D. Martin, chairman, CEO and co-founder of Tera Group.

“By combining with MGT, Tera will create a unique public offering to support the essential infrastructure needed for a vibrant global bitcoin ecosystem,” Martin said.

In an interview with CoinDesk, Martin added:

“Bitcoin consumes the majority of our mindshare here in our firm. It’s our bitcoin listing and subsequent certification that has the most commercial possibilities for us right now, and it’s a business we’re very keen to cultivate and nurture along.”

MGT and Tera plan to finalize and execute a definitive agreement by March 16, 2015.

Images via Tera and MGT.

LazyCoins Launches Intending to be ‘the Exchange That People Just Trust’

UK-based LazyCoins announced its official launch on March 2. Lazycoins is a digital currency exchange offering fully licensed platforms for both trading and merchant payments in GBP and euro markets.

Top 8 Ways to Book a Flight with Bitcoin

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Bitcoin Investment Trust Becomes the First Publicly Traded Bitcoin Fund

The Wall Street Journal reports that Barry Silbert’s Bitcoin Investment Trust (BIT) is about to become the first publicly traded Bitcoin fund. The BIT will be an interesting option for traditional investors looking for exposure to Bitcoin who prefer not to trade Bitcoin as currency. The BIT is sponsored by Grayscale Investments, a part of Silbert’s Digital Currency Group.

Currently, the BIT, launched in 2013, is a private, open-ended trust that is invested exclusively in bitcoin and derives its value solely from the price of bitcoin. It enables accredited investors, with annual incomes greater than $200,000 or assets of more than $1 million, to gain exposure to the price movement of bitcoin for a minimum investment of $25,000 without the challenges of buying and securely storing bitcoin. BIT-accredited investors are shielded from hacking attacks and unregulated entities, which would be appealing for small investors as well. But the BIT hasn’t been publicly available to small investors so far.

The Winklevoss twins also are planning a Bitcoin Exchange Traded Fund (ETF), the Winklevoss Bitcoin Trust ETF, which will be available to all investors on NASDAQ with the ticker COIN. The launch date is unknown, but Cameron and Tyler Winklevoss say that everything is proceeding according to plan. According to their Securities and Exchange Commission (SEC) filing, the value of COIN shares will reflect the dollar exchange rate of Bitcoin on Winkdex.

The Winklevoss ETF is still going through the lengthy ETF registration process with the SEC. But BIT is taking a shortcut, permitted by a rule that that allows holders of a private fund to sell their shares publicly after a 12-month lockup period and completing a less arduous approval process with the Financial Industry Regulatory Authority (FINRA). Without SEC registration, the BIT can’t formally be considered as an ETF, but once existing shares are offered publicly it will be equivalent to an ETF in practice.

Silbert said that FINRA granted BIT’s request for a permanent ticker symbol, GBTC, which “is expected to be effective shortly.”

In a statement, the Digital Currency Group said, “Although we have been assigned a ticker symbol, no assurances can be given as to when or if such trading will commence, or that an active public secondary market for BIT shares will develop or be maintained.”

Each share of BIT is worth approximately one-tenth of a bitcoin. As of Friday, the trust’s net asset value stood at $24.43 per share. The Wall Street Journal article notes that many investors purchased their BIT shares in 2013 when the dollar exchange rate of bitcoin was about $100, so they would make a profit selling now. New investors, including small investors, will be able to buy BIT shares soon.

Bitcoin space and the traditional stock market are increasingly converging, and the Bitcoin economy as a whole will continue to have DiY and “underground” aspects. But it is evident that regulated, professional Bitcoin services will become more common, and take Bitcoin closer to mainstream.

Bitcoin Giving Back: This Week on Decentral Talk Live

A common theme among bitcoiners is the desire to make the world a better place. This week, Decentral Talk Live focuses on a couple of organizations that are trying to do just that.

Connie Gallippi is the Founder and Executive Director of the BitGive Foundation and a founding member of the Women’s Crypto Association. This week on DTL, Connie describes some of the many projects that the BitGive Foundation has been involved in, especially in Africa. They include Medic Mobile, Save the Children and the Water Project. She also discusses the role she played in getting ChangeTip to add the charitable donation option to their service.

Connie then addresses the issue of inclusion and how the Women’s Crypto Association is ensuring that women’s viewpoints are being well represented in the crypto space.

Another woman making a point of incorporating bitcoin into charitable giving is Anne Connolly, director of fundraising and marketing at Dignitas International and fundraising manager and director of marketing at Médecins Sans Frontières/Doctors Without Borders Ireland. Through her work with Dignitas International, she has helped to raise funds for the Tisungane HIV/AIDS Clinic in Malawi. Anne also addresses the increasingly important role of bitcoin in Somalia, a country with a huge remittance market.

Other guests this week include Flavien Charlon, Founder and CEO of Coinprism, who introduces viewers to the world of colored coins; Radislav Albreicht of BitBond, a peer-to-peer lending platform that allows borrowers to access affordable funding without needing a bank, while lenders earn higher interest rates on their savings; and finally, the always entertaining Tatiana Moroz, bitcoin evangelist, singer/songwriter and author.

CoinOutlet Acquires LibertyTeller BTMs to Expand New ‘Backend Network Ecosystem

CoinOutlet, Inc. announced they have acquired the ATM network of LibertyTeller. LibertyTeller is the same company that, according to CoinTelegraph and co-founder Chris Yim, won the controversial race

MARCH 2 DIGEST: Bitcoin Investment Trust Goes Public, BTC Foundation Election Results are In

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DC Cannabis Legalization Victory is a Win for Bitcoin (Op-Ed)

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CoinSpark Open Sources a PayPal-Like Messaging Feature

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Sunday, March 1, 2015

Weekend Roundup: First Publicly Traded US Bitcoin Derivatives Exchange Set to Launch, New BTMs in the US, UK

New Bitcoin ATMs in the USA and the UK, youth entrepreneurial program looking to empower under-served populations with Bitcoin, MGT Capital Investments to merge with Tera Group and launch the first pu

Court appeal divides Dutch bitcoin community

The atmosphere is heating up in the Netherlands, as a court appeal has created a divide in the Dutch bitcoin community. At stake: the legal status of bitcoin.