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If you want to follow the big money, you have to consider Bitcoin

by , 28 July 2014

The interest in Bitcoin is rapidly growing. In the US this year alone, six new Bitcoin hedge funds have appeared.

So what does this tell us about Bitcoin? Does it indicate that the future is looking good for the digital currency?

Let's take a closer look…


Big investors are ploughing money into Bitcoin funds


The launch of so many Bitcoin hedge funds this year is a very strong indicator that large investors think the future is very bright for Bitcoin.

Their launch tell us one thing: Investors with large amounts of cash who’re looking for maximum returns see a very profitable future in Bitcoin, David Zeiler in Money Morning US explains.

These funds are only for accredited investors. Retail investors will need to wait until the Winklevoss Bitcoin Trust gains approval later this year to invest in a Bitcoin fund.

The latest Bitcoin hedge fund, launching later this week, is the work of a former commodities trader of JPMorgan Chase & Co, Daniel Masters. The Global Advisors Bitcoin Investment Fund (GABI) is based in Jersey, a well-known tax haven,

The target audience for this fund is investors in the UK, Europe and the Middle East. But Mr Masters has plans to launch a companion Bitcoin hedge fund in the US.


Bitcoin has the same characteristics of a commodity


Talking about the new fund, Mr Masters told Newsweek that he sees the digital currency like a commodity, such as oil. He equates the Bitcoin market now to the oil market 25 years ago. There were a “lot of these transactions happening merchant to merchant, this product that everyone wanted and could use, but whose prices were very, very volatile”.

Mr Masters sees his fund attracting a staggering $200 million in the first six months! He also sees the price of Bitcoin rising to $2,000.

Other Bitcoin hedge funds that launched this year include:

Coin Capital Partners
Launched in May, this fund is using a buy and hold strategy. The thinking behind the strategy is that the increasing adoption of Bitcoin will result in a much higher price.

Pantera Capital
This fund changed its focus to Bitcoin and other digital currencies at the start of 2014. It invests in Bitcoin as an asset, but also provides some venture capital financing to Bitcoin start-ups. The fund size is $150 million.

Falcon Global Capital
Launched in March, this fund is all Bitcoin. It buys and stores Bitcoins on behalf of its investors. Starting investment is from $25,000 up to $10 million.

With a large flow of ‘big money’ being invested into Bitcoin, it suggests that these big investors see a prosperous future for Bitcoin.

So there you have it, if you want to follow the big money, you have to consider Bitcoin.

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If you want to follow the big money, you have to consider Bitcoin
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