With his Bitcoin Investment Trust rapidly gaining interest from curious mainstream investors, it’s no surprise that businesses want to talk to Barry Silbert. What is surprising, however, are the kinds of businesses who are now knocking on his door. Earlier today, Silbert posted this tweet, hinting at what may be the strongest indicator yet of Wall Street’s entrance into the bitcoin ecosystem.
Interesting. We're starting to get approached by large, well-known insurance cos looking to offer insurance products on bitcoin exposure
— Barry Silbert (@barrysilbert) March 28, 2014
While the tweet hints at things to come for SecondMarket and bitcoin, it’s worth noting that interest doesn’t equal speed. With the IRS ruling that bitcoins are essentially a commodity, this does offer some guidance to insurers for bitcoin insurance, but the deep instability around bitcoin’s price and the global nature of the market present some unique challenges for determining risk and pricing.
Should the insurance industry create bitcoin-specific policies, the risks for many investors will be substantially lowered. That means more activity in the bitcoin world, and very likely a rapidly rising price.
Earlier this week, Silbert spoke to a group of “38 institutional investors representing more than $250 billion” at Barclays Emerging Payments Forum. He spoke in private meetings with dozens of investors at the forum, and noted that most of those he met with were looking for public-company investments related to bitcoin, rather than direct exposure to virtual currency. As it happens, that’s exactly what SecondMarket offers.
He will have competition, however. The Winklevoss Bitcoin Trust should launch around the same time as Silbert’s offering, and the newly announced Bitcoin Superfund is set to launch in the coming months. One of the few funds currently on the market is provided by Malta-based Extante, which also claims to be the “best performing hedge fund in history” thanks to last year’s massive price rally.
