Apparently the unfolding Mt. Gox disaster is only going to be a temporary blip in the road for the new virtual currency bitcoin. SecondMarket Holdings, a consulting and PE investment firm, announced yesterday that it is planning to open a U.S.-based regulated exchange for bitcoin investors soon. The firm’s CEO was interviewed by Reuters on Tuesday and provided a few more details on the plan.
CEO Silbert’s plan
In the interview, SecondMarket Holdings CEO Barry Silbert said the new exchange will be modeled after the NYSE Euronext (NYSE:NYX), and could be launched by the second half of 2014. Silbert says he is on track to recruit least 10 members for the exchange by the end of March. He mentioned he is currently in advanced discussions with a number bitcoin companies and global banks.
Chris Hohn the founder and manager of TCI Fund Management was the star speaker at this year's London Value Investor Conference, which took place on May 19th. The investor has earned himself a reputation for being one of the world's most successful hedge fund managers over the past few decades. TCI, which stands for The Read More
“The whole effort will be regulated and all the participants in the exchange will be regulated as well,” Silbert said.
“The involvement of big banks is crucial in advancing the bitcoin market, Silbert continued, “[as that would] probably provide the level of comfort that institutional investors are looking for.”
New bitcoin exchange to spin off subsidiary
The proposed bitcoin exchange will be structured as a new bitcoin business that SecondMarket is planning to spin off. The name of the new company is still under advisement. A subsidiary of SecondMarket manages the Bitcoin Investment Trust, which already has assets of more than $47 million and a full service trading desk.
Mt Gox situation
The world’s largest bitcoin exchange, Japanese-based Mt. Gox, suspended operations a little more than two week ago. The company said the suspension was due to technical difficulties relating to a hacker heist of bitcoins stored with Mt. Gox.
Then yesterday, the company’s website was closed down and the following message was displayed:
Dear MtGox Customers,
In the event of recent news reports and the potential repercussions on MtGox’s operations and the market, a decision was taken to close all transactions for the time being in order to protect the site and our users. We will be closely monitoring the situation and will react accordingly.
The situation had led to customers have been protesting outside the Mt Gox headquarters, which might explain why the company suddenly moved from its previous location.