4000% APR: how many in Russia earn bitcoin
Material posted: Publication date: 12-10-2014

The Ministry of Finance proposed to introduce penalties for the production and use of cryptocurrency: up to 50 thousand rubles for individuals and up to 1 million rubles – for legal. The Central Bank also criticized cryptocurrency, refused "to identify the crypto operations and take a decision thereon", explaining that this does not correspond to its purposes and functions. Greater enthusiasm was shown by the state office of public Prosecutor, having declared about the readiness to begin active struggle with the appeal of the cryptocurrency and collected meeting with participation of representatives of FSB, the interior Ministry and the Central Bank. However, in Russia there are no serious projects connected with bitcoins. However, some Russians earn that currency. RBC figured out how they do this and that for them means the initiative of the authorities.

The hedge Fund with yield of 4000% APR

"In Russia there is no serious bitcoin businesses, and given the rhetoric of the authorities it is unlikely they will appear. Not many public figures who announce their projects with bitcoins. There are individual users who buy bitcoins on exchanges, there are miners, but not industrial scale," says managing partner at the Bitcoin Fund, Anatoli Knyazev. Knyazev together with partner Alexey Kirienko and Gatis Eglitis manages the world's first hedge Fund investing in bitcoin.

"The only Russian that there is in Bitcoin Fund – managers, who are Russian citizens. In addition, the management company is registered in Malta, and the Fund in Bermuda. We don't have Russian clients investing in the Fund, the customers from USA and Europe," says Foundation co-founder Anatoly Knyazev.

Financiers are interested in cryptocurrency at the end of 2012. "We have noticed that there are a huge number of hedge funds that invest in real estate, wine and anything, we made a hedge Fund that invests in bitcoins," says Knyazev. Before the establishment of the Fund access investors who wanted the portion of the portfolio to invest in bitcoins, was difficult. "If a family office wanted to invest in bitcoins, he couldn't do, no administrator or auditor would not record the asset in the balance sheet. We have engaged in securitization, made from obscure asset "bitcoin" friendly asset pay a hedge Fund," he says.

The Bitcoin Fund works on the principle of exchange-traded funds ETF, one share is equal to one bitcoin. Buying a hundred shares in the Fund, the investor participates in the rise or fall in the price of bitcoin just as if he had bought a hundred bitcoins, but avoids the risks of working at private exchanges. At the peak of interest in bitcoin in the fall of last year, the size of the Fund stood at 92 thousand bitcoins or, at the exchange rate at the end of November 2013, nearly $100 million Fund for 2013 showed a yield of more than 4000%.

"The result was due solely to the increase in the value of bitcoin. The Fund does not have any active management," – said Knyazev.

Little exchange of Russian origin

The largest bitcoin exchange, facilitating the purchase of bitcoins for rubles, and the fifth volume of trading in the world is BTC-e, the transparency tends not. About the market, little is known of her in June 2011. created residents from Russia and the SKOLKOVO alumni Alex and Alexander. About the company they told industry portal CoinDesk: the exchange is registered in Cyprus, the servers are in Bulgaria, and to conduct transactions using several banks, one of which is in the Czech Republic. Users BTC-e attracted by the opportunity to sell not only bitcoin, but other cryptocurrencies (lidoine, Nakayama, etc.), exchanging them for dollars, rubles, euros, yuan or pounds.

In September of this year, trading volume on BTC-e amounted to 230 thousand bitcoins, which at today's exchange rate is about $90 million fee for transactions is 0.2% to 0.5% and is charged on both sides. "In addition, the exchange takes 5% for Deposit bitcoins to your account and 5-7% for their conclusion", – told RBC one of the users of the exchange.

The attitude of the founders of the exchange to regulation by the Russian authorities was voiced as early as February of this year. Then on the website of the Volgograd region Prosecutor's office reported opening a criminal case against Internet resources dealing with bitcoin exchanges, including BTC-e. The next day the news was refuted, referred to hacker attack, but the owners have time to respond. "We are not concerned about any potential actions of the Russian authorities: the exchange is not located in Russia, has offices and does not work with Russian banks, and the founders, though, and are residents of Russia, are not its citizens", – said the representative exchange portal CoinDesk.

One of the founders of the first futures exchange ICBit is also Russian Alexey Bragin, the project organizer create a vending Dmitry Medvedev, the operating system ReactOS. "In 2011 I had a thought: if bitcoin is the digital equivalent of gold or currency, immediately after the exchange market where you can buy or sell, must be the derivatives market. The majority of trading in currency and gold now it is for futures contracts, the same thing could happen with bitcoin," he says.

ICBit first proposed to trade futures with settlement in bitcoin. Since then, the exchange had acquired rivals: in August began testing futures trading bitcoin on Chinese exchange OKcoin. Monthly trading volume on the Chinese exchange is about 4.5 million of bitcoins, or at today's exchange rate, $1.6 billion trading Volume on ICBit, according to the founder, be "about a few million dollars in the month". "The bitcoin market is not very large, but constantly growing. A few months ago it was about the hundreds of thousands," notes Bragin.

The company also ICBit is not registered in Russia. "It was unclear how the Russian authorities can respond to such a project, and the lawyers advised an offshore jurisdiction in Dominica, where do you plan to introduce bitcoin as an official currency," explains Bragin.

Some in the digital field

While businesses are looking for offshore, where they could use to work with cryptocurrencies in Russia remain separate "miners" and traders who try to capitalize on bitcoin itself. It will concern the initiative of the Ministry of Finance.

"The number of bitcoin users in Russia to be difficult, almost impossible, because the system is built on anonymity, but a lot of them. This can be seen on demand in the pair ruble/bitcoin. And it is worth considering that the big players are trading through dollars, and to separate Russian players, for example, the British exchange is almost impossible," explains Bragin.

Bragin claims that although the history of bitcoin in Russia began with mining, and now no one works. About a year ago, mine has become more difficult: the power of usual computers is not enough, you had to buy a special device for tens of millions of dollars. But the increased number of bitcoins attracted the attention of traders – people with financial education, who see in bitcoin the next item on which you can make, and the market in which there is still inefficiency, Bragin continues.

Traders, who were interviewed RBC, said he can see a few ways to earn bitcoin. The first investment is to buy bitcoins cheaper and wait until they rise in price. The second was to use market inefficiencies and capitalize on the arbitrage, using the difference in the courses on different exchanges to different currencies. "I'm buying bitcoins for rubles, I'll send them through one of many exchanges and cash in the currency that offers the best spread, getting funds in your desired currency with minimal costs," he explained on condition of anonymity, one of the traders.

"Banks and exchanges are taking interest, but the spread is so narrow, so cash is more convenient", – said one of traders.

Alexander Ratnikov, Siranush Sharoyan

Source: http://top.rbc.ru/finances/10/10/2014/5436b0f8cbb20f504085abcb

Tags: financial center , Russia , finances