Short seller scores a win
I wrote about Bitcoin Investment Trust on Monday when shares were trading above $3,000.
The problem, as Andrew Left at Citron Research had pointed out, was that this was a company that held Bitcoin, like an ETF. Owning the company was akin to owning Bitcoin so the price should closely mirror Bitcoin (at a ration of 0.1).
Instead, it was trading at $3200 and Bitcoin at $16,000.
I warned the premium should disappear, especially with futures making exposure to Bitcoin much easier.
Well, that's exactly what happened with prices falling 40% since Tuesday. It's now trading at $2045.
What's crazy is how many people in the original post were arguing that the premium -- which was at 100% -- was justified. it speaks to the froth in this mania.
