Latest Bitcoin News: The Race for Retail Investors Is On

Latest Bitcoin news: SecondMarket, which already operates a Bitcoin hedge fund for wealthy investors, this week said it plans to expand the reach of that fund to retail investors.

Whether SecondMarket’s Bitcoin Investment Trust becomes the first Bitcoin fund open to ordinary investors is now up to financial regulators, but it is expected to win approval before the end of the year.

The other contender is the Winklevoss Bitcoin Trust, a Bitcoin ETF (exchange-traded fund) that twins Cameron and Tyler Winklevoss submitted to regulators last year.

The Bitcoin Investment Trust fund opened its doors to high-roller investors last September, but so far the less well-heeled have had few options for investing in Bitcoin aside from buying the digital currency directly.

The SecondMarket Bitcoin fund, which has $54 million in assets under management, would trade on the electronic marketplace run by OTC Markets. SecondMarket now must await approval from OTC Markets and FINRA, the Financial Industry Regulatory Authority.

Even though the Winklevoss Bitcoin ETF has a months-long head start in the regulatory process, it faces higher hurdles as an ETF – it requires the pre-approval of the U.S. Securities and Exchange Commission (SEC).

While the SecondMarket Bitcoin fund will probably beat the Winklevoss Bitcoin ETF to the market, the Winklevoss option might prove safer for retail investors, as it will have SEC approval and will be denominated in dollars, not bitcoins.

Apart from the SecondMarket Bitcoin fund, it was another busy week for Bitcoin news…

Latest Bitcoin News: The Pros Are Getting on Board

Investing in Bitcoin was a major theme of the week. In addition to the SecondMarket announcement, Fortress Investment Group, Benchmark Capital, and Ribbet Capital said on Tuesday that they were buying stakes in San Francisco-based Pantera Bitcoin Partners.

Pantera runs a Bitcoin hedge fund that as of December was worth $147 million. Pantera Chief Executive Officer Dan Morehead said his company, which was founded in 2003 as a macro hedge fund operation, has completely shifted its focus to digital currencies.

It’s just one more piece of evidence that major players in the investing world are getting serious about Bitcoin…

Researcher Aite Group LLC reported on Thursday that Bitcoin startups in North America have attracted $98.6 million in venture capital to date. Worldwide, Aite said $117 million of venture capital has gone into Bitcoin startups.

So it’s no surprise that on Thursday, none other than Bill Miller, the Chairman and CEO of Legg Mason Inc. (NYSE: LM) subsidiary LMM, told Bloomberg Television that “Bitcoin is like making a venture bet. The potential return is huge.”

Miller gained notoriety as the manager of the Legg Mason Capital Management Value Trust fund, which beat the Standard & Poor’s 500 index for 15 consecutive years, from 1991 through 2005.

The Latest Bitcoin News – Quick Hits

• It’s a Miracle! The bankrupt Bitcoin exchange Mt. Gox announced late Thursday that it had “discovered” 200,000 bitcoins in an “old-format wallet.” Mt. Gox said in February that it had lost 750,000 of its customers’ bitcoins, as well as 100,000 of its own. Just as with the sketchy explanation for the original problems that led to the bankruptcy, the sudden discovery of a huge trove of “lost” bitcoins was met with widespread suspicion. One thing is certain: The Mt. Gox story is far from over.

• Bitcoin Payments Soaring: According to a Monday story in CNNMoney, the largest processor of Bitcoin payments, BitPay, is growing exponentially. The number of businesses using the service worldwide has zoomed from just 1,000 in 2012 to 26,000 now.

• Don’t Count China Out: When the Chinese government announced restrictions on the use of Bitcoin last fall, Bitcoin prices plummeted, and many believed that Bitcoin in China was finished. But on Thursday the head of BTC China, the biggest Bitcoin exchange in that nation, told Bloomberg TV that Bitcoin is not banned in China and that the digital currency is continuing to gain traction.

Will you be investing in Bitcoin when the SecondMarket fund and Winklevoss Bitcoin ETF go live later this year? Tell us on Twitter @moneymorning or Facebook using #bitcoin.

In another corner of the tech world, Apple Inc. has quietly been putting together a strategy that will allow it to gain the upper hand in a wearable tech market that is forecast to explode over the next few years. Here’s how Apple plans to dominate wearable tech…

Related Links:

• The Wall Street Journal:
  SecondMarket Seeks to Open Bitcoin Fund to Ordinary Investors