Bitcoin Hedge Fund To Buy $200 Million Bitcoins
Bitcoin Hedge Fund Global Advisors Bitcoin Investment (GABI) has begun buying Bitcoins and will invest up to $200 million in their first 6 months on operation. An article on Morning Money first mentioned the $200 million number.
There is active discussion on the Bitcoin Talk forums here. Many are speculating in the thread that GABI will push the Bitcoin price higher, especially in the coming weeks. While other in thread are more pessimistic noting that early adopters, The U.S. Government, and MT Gox hackers could crash the market at any time.
If the Bitcoin price stays steady at $500, this would mean GABI would be buying 400,000 Bitcoins which is a massive number by most investors standards. It is important to note, that these Bitcoin purchases from GABI will be done Over The Counter, which means the coins will never be on Bitcoin exchanges. If you are expecting to watch charts showing these buys, you will be disappointed. Due to the lack of transparency of over the counter purchases, it is difficult to reason how this will affect the price, but it is clearly a bullish sign for the price of Bitcoin.
Another poster in the Bitcoin Talk thread is speculating that the coins sold on exchanges last week in the amounts of 1,000 to 1,500 Bitcoins may have been the result of market manipulation by entities associated with GABI. It would make sense that GABI would prefer to buy the majority of its Bitcoins at lower prices.
The founder of GABI, Daniel Masters, was a former oil futures trader, so it will be interesting to see what his approach to Bitcoin is. There are very few Bitcoin regulations right now, so crashing the price of Bitcoins on exchanges might still be technically legally.
September 23 is the stated launch date of the GABI fund, and the Bitcoin price has rallied nearly 10% today, so there could be a correlation to the Bitcoin price, and GABI going online.