Almost three months have passed since SecondMarket launched the Bitcoin Investment Trust (BIT). How is it performing? Perhaps unsurprisingly (given bitcoin’s recent good fortune) not badly at all.

The BIT, launched as a vehicle for institutional investors to get into bitcoin, stood at a $61.1m (67,300 BTC) net asset value on Friday.

Shares in the Trust edged along for around two weeks after its inception on 26th September. Following this, they began creeping up, before beginning their meteoric rise around 4th November.

The net asset value (NAV) per share peaked a month later, before falling back. In short, the NAV of the BIT has tracked bitcoin’s own price movements very closely.

Barry Silbert, CEO at SecondMarket, said that performance has exceeded his expectations. The company’s initial goal was to hit $10m in asset centre management by the end of the year.

Silbert describes himself as part of bitcoin’s second phase. The virtual currency will go through five phases, he says.

The first two-year phase was driven by hobbyist hackers, while the second, starting in 2011, bought in early adopters and entrepreneurs.

Phase three has just started, and it is bringing venture capital companies to the table. “VCs are now supporting and investing in a lot of companies that are building infrastructure on top of the protocol, which the average person is not going to see, for the foreseeable future,” Silbert says.

So what’s to come in stage four? According to Silbert, Wall Street.

Wall Street has been largely disinterested in bitcoin to date, but a significant portion of his investors still come from there. They’re individual professionals who are piling money into the BIT on their own behalf. Silbert said:

Wall Street professionals are ahead of their companies for several reasons.

It’s fair to say that some institutions don’t yet feel well informed about virtual currency, but it’s also because in many cases they aren’t allowed to be.

Bitcoin is not yet defined as an asset, a commodity, or a currency, Silbert points out (indeed, it has characteristics of them all). “A lot of these institutions just don’t have the ability within their structure to invest in that.”

The other problem is that the auditors aren’t equipped to deal with it. And the reason for that is down to one of bitcoin’s fundamental characteristics: addresses are anonymous.

Like anyone, an auditor can see that a certain address holds inputs of a certain value. But it can’t prove that an investor owns them. “Access does not equal ownership, so you cannot prove title,” Silbert says.

Nevertheless, he believes that the funds will solve these problems over time. After all, SecondMarket did. It enlisted Ernst & Young as its auditor, showing that large accounting firms are prepared to get involved.

Wall Street professionals join another group of people who are blazing a trail in bitcoin by investing ahead of their own companies: technology entrepreneurs.

They are a natural fit, because they have a natural affinity with and understanding of technology. They ‘get’ virtual currency, and believe in its potential.

Individuals in this category can take advantage of self-directed Investment Retirement Accounts (IRAs), which are retirement investment accounts, generally held by a qualified custodian, in which the account’s owner makes the investment decisions.

“In the US it's very common for investors to use self-directed IRAs to do [activities] like angel investing, early-stage investing,” Silbert says.

Several of these IRAs - PENSCO, EnTrust, Equity Institutional, and Millennium Trust, are now listing the BIT as an investment option. But apparently, Fidelity Investments isn’t. Last week, CNBC and Marketwatch reported that the investment firm was allowing certain IRA clients to invest in bitcoin, but it subsequently changed its mind. ”

SecondMarket said in a statement:

The BIT is currently most popular among tech entrepreneurs, who invest smaller sums, but in greater numbers.

Between all of these investment types, the median investment (where half of all investments are lower, and half are higher) is $30,000.

However, the average investment is around $222,000, pushed higher by some weighty investments. There is another group currently bringing the most money into the BIT: family offices.

These are teams appointed by families with a high net worth (typically $100m or more). Families at this level, which may have accumulated their money over many generations, will often use their own teams rather than outsourcing their investments to a fund manager.

Family offices, which serve single or multiple families, will handle a variety of personal services such as accounting, payroll, and wealth management.

If a family office puts some of its gold into bitcoin (which recently exceeded the precious metal’s price) then it can increase that diversity, while treating bitcoin as an early stage startup can help such investors get in on the ground floor. With some analysts predicting a value of $98,500 per bitcoin, such allocation carries a lot of potential.

Family offices may be the largest investors now, but if, as Silbert believes, institutional investors get involved, they will be the largest group.

“Phase four is going to be Wall Street, so Wall Street [will have] bitcoin as an investable asset class,” he says, adding that we should expect to see this in the coming year.

All of this heralds the fifth and final phase of bitcoin, which will be mass consumer adoption, according to Silbert. That will happen in 2015, he says.

That promises to revolutionise the way people deal with money, driving efficiencies into the process and potentially saving people money. But for that to happen, the first four stages are necessary to evolve the virtual currency and drive liquidity into the market.

We’re still at the start of phase three, and liquidity is still limited, he says. That means that consumer users will lose a significant percentage on any exchange. This stops consumers from saving much money when using it as a form of money transfer, he says, adding:

That’s what SecondMarket is trying to do with the BIT, Silbert concludes: increase awareness, make it more investible as an asset class – and finally, to drive up price by reducing supply.

The Trust has been buying bitcoins from exchanges, merchants, individual users, and miners.

It will be a while before the BIT is publicly traded. But having accrued around 90 investors and just over half a % of all bitcoins mined to date, the Trust is off to a healthy start.

Disclaimer: CoinDesk founder Shakil Khan is an investor in SecondMarket.

Bitcoin image via Shutterstock