Bitcoin Trading on the ASX?


Really Bitcoin trading on the ASX, you ask?  I am referring to the proposed new listing of a Melbourne based team called Bitcoin Group. This proposed listing caught my eye earlier in the week after reading in the SMH that the company is looking to list on the ASX in November hoping to raise about $20m.

Formal Stock Exchange

If they are successful, it would make the Bitcoin Group one of the first companies involved in this crypto currency to formally list on an official Stock Exchange. Quite an achievement given everything we read is about governments everywhere looking to regulate Bitcoin.

Currently in Australia there is a Senate Inquiry looking into Bitcoin chaired by Sam Dastyari. With the objective to try to create some sort of regulatory framework around the currency, the results of this will be reported in March 2015. But for now even the Australian Tax Office refuses to recognise Bitcoin as a currency, this means that those shops that accept it will have to impose GST on the purchase.

Arbitrage Fund

So lets take a look quickly at what Bitcoin Group do. They run a fund, and they have developed an automated trading engine that can identify mispricings between different Bitcoin exchanges and according to SMH they have returned to their investors some 704% in little over a year. Clearly like any market as new entrants join the ability to cleanly arbitrage between the Bitcoin exchanges will shrink. So for investors, the question becomes, how quickly will that arbitrage be removed? Once it is removed then the future plans for Bitcoin Group seem to revolve around the development of a new payments network. Certainly a different way of making money than from running an Arbitrage Fund.



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