SecondMarket is also spinning out its existing Bitcoin businesses, including its Bitcoin investment trust -- think of it as a way to invest in Bitcoins equivalent to exchange-traded funds for gold -- and its 11 individuals who are market makers for Bitcoin today. SecondMarket will also put $20 million in cash and Bitcoin assets into the new organization.
Silbert admits that Bitcoin will remain a speculative investment for the near future. "It's akin to investing in gold, a higher risk version of gold." But once the monetary base grows from the $6 or $7 billion where it is today to $100 billion or so, and the daily transaction volume goes from about $100 million today to $1 billion or more, that will change. "With enough exchange volume and velocity, Bitcoin can emerge as a more efficient remittance platform, a more efficient money transfer platform."
He believes Bitcoin's growth is inevitable, despite what happened to Mt. Gox this week.
"What you're seeing is well-run well-capitalized businesses, Coinbase, Bitpay, are investing heavily in technology and management and they are keeping up with the pace and growth of the industry. Other businesses, either because they're poorly managed or because they're undercapitalized, are not. That's healthy growth."
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