FORTUNE -- Bitcoin has gotten all sorts of attention this year, both from the media and regulators. For investors, however, it has often proven difficult to purchase meaningful amounts of the crypto-currency, let alone to safely store it. SecondMarket is planning to offer a solution, beginning Thursday morning.
The New York-based firm is launching the first U.S.-based investment vehicle dedicated exclusively to Bitcoin, called The Bitcoin Investment Trust. It's structured as an open-ended private trust whose shares only will be available to accredited investors via the SecondMarket platform. SecondMarket is seeding the trust with a $2 million investment, and also has named Jon Matonis (executive director of The Bitcoin Foundation) and Archibald Cox Jr. (ex-chairman of Barclays America) to the trust's advisory board.
"We have decided that Bitcoin is the next asset class that we want to use our resources and tech platform to make more acceptable to a broader group of investors," explains SecondMarket founder and CEO Barry Silbert. "To me, this is reminiscent of the early days of the Internet, when you look at all of the really interesting companies getting formed and the VCs who are investing in them."
Silbert also has been investing in Bitcoin-related startups off his personal balance sheet, but says that those deals are being kept separate from The Bitcoin Investment Trust.
Earlier this summer, the Winklevoss twins -- of Facebook (FB) fame/infamy -- filed to raise a $20 million ETF that would invest exclusively in Bitcoin. But the vehicle has not yet taken off, in part because it remains mired in the SEC review process (something SecondMarket doesn't need to worry as much about, since it only is selling to accredited investors on a private exchange). There also is a private Bitcoin fund based in Malta.
"It's a lot like a currency ETF, but a private one that isn't going to be traded by retail investors," Silbert says. "The risk profile is more similar to an investment in a seed-stage company, in that there is potential for massive upside and also the potential for total principle loss."
On that last point, there continues to be significant worry that U.S. regulators will put some sort of kibosh on the entire Bitcoin market. But Mark Murphy, SecondMarket's vice president of public affairs, isn't too concerned:
"I was firmly in the skeptic camp when Barry started talking to me about this a year ago, and so were a lot of Congressional staffers I spoke with. But now I'm getting a different impression from those same staffers. They are beginning to recognize that some form of digital currency is going to be very successful. It's not going to replace the dollar or the euro, but it will step into the void for being a stored currency and for digital payments. So the discussion now isn't about survival, but rather things like how to enforce money laundering and how it's going to be taxed. People really want to handle regulation careful and comprehensively rather than in a fragmented manner, and rather than just pretending like Bitcoin will just go away."
Bitcoin Investment Trust plans to spend the first several months in asset-gathering mode, and will open up the secondary markets for trading six months after launch. Sidley Austin is serving as legal counsel, while Ernst & Young has signed on as auditor.
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General solicitation is coming, and that means big things for SecondMarket.
FORTUNE -- The Securities & Exchange Commission this morning will vote on a proposed rule that would permit general solicitation by private-market issuers, including private equity funds. And if they approve the rule, expect SecondMarket to flip the switch on a stealthy new general solicitation platform that would include investor accreditation verification solutions.
For the uninitiated, private equity funds currently are not MOREDan Primack - Jul 10, 2013 10:17 AM ET
Looking at the past 6 months of private secondary activity.
FORTUNE -- Private secondary trading platform SecondMarket this morning released data for the first six months of 2012. Some highlights:
* Average company trading on SecondMarket was 7 year-old, had 200 employees and a private market cap of $329 million.
* Nearly half of the liquidity events came from gaming companies, followed by consumer web (21.5%), education (15.3%) and financial services (10.9%). Looks MOREDan Primack - Aug 6, 2012 10:07 AM ET
With Facebook going public, the private secondary markets move on.
With the secondary private markets about to lose their cash cow, I was curious as to what companies might be able to (partially) fill the void. So I rang up SecondMarket, which last Friday laid off around 10% of its 150-person workforce in preparation of the Facebook IPO. The exchange wouldn't divulge trading data on private companies, but did provide a MOREDan Primack - Apr 3, 2012 9:26 AM ET
Groupon's private pricing data will remain private.
SecondMarket has a standard policy about disclosing the prices at which companies trade on its private market exchange: They remain private under wraps until after the company in question goes public.
For example, when LinkedIn (LNKD) went public earlier this year, SecondMarket immediately disclosed data from the prior 12 months of private trading activity in LinkedIn shares.
We had expected to see the same thing today for Groupon MOREDan Primack - Nov 4, 2011 10:20 AM ET
New details on Groupon's unlikely IPO partner.
Private stock exchange SecondMarket is selling shares in the upcoming Groupon IPO to its clients, according to Reuters.
The story says that a SecondMarket executive recently emailed "potential investors... who previously traded through the firm to see if they were interested in buying Groupon shares... SecondMarket will be working with Morgan Stanley, one of the top underwriters on the Groupon IPO, as a member of the MOREDan Primack - Nov 1, 2011 12:09 PM ET
Private companies may be allowed to stay private longer.
Congress may soon change the law that is compelling Facebook to go public in early 2012, Fortune has learned.
Reps. David Schweikert (R-AZ) and Jim Himes (D-CT) are among those who plan to introduce a bill that would amend the Securities Exchange Act of 1934. According to a draft copy, it would:
1. Expand the so-called "500 shareholder rule" to 1,000 shareholders. This rule currently MOREDan Primack - Jun 14, 2011 6:26 AM ET
Buyout firms looking to cash in on their brand equity have either gone public or sold shares to a sovereign wealth fund. Now, there's an alternative.
PIMCO boss Mohamed El-Erian last week confirmed reports that firm employees were buying and selling equity via SecondMarket, the private online marketplace for alternative assets. Now it seems that PIMCO is just the tip of a much larger iceberg.
Jeremy Smith, chief strategy officer for SecondMarket, tells MOREDan Primack - Apr 4, 2011 12:34 PM ET
PIMCO boss Mohamed El-Erian was in Times Square this morning, for a wide-ranging interview with Reuters editor-at-large Christa Friedland. Lots of talk about Japan, Greek tragedies and the like.
Outside reporters were allowed in the door, but Reuters HQ is a couple hundred miles south of my current location. Too bad, because I wanted to ask El-Erian about a New York Observer report that PIMCO equity had begun quietly trading on SecondMarket, MOREDan Primack - Mar 31, 2011 11:12 AM ET
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