Read time: < 1 Minute
The Winklevoss Twins, fresh off working deals in the Hamptons that involved Bitcoin payments, have a new scheme up their sleeve: they are starting a Bitcoin ETF (Exchange Traded Fund). Tyler and Cameron Winklevoss are the co-founders of Facebook; after Mark Zuckerberg lost a $65 million legal dispute with the Harvard establishment insiders, also good friends of the derivatives executive and former Harvard University President Larry Summers, these Bitcoin entrepreneurs have decided the next episode in their career is starting a Bitcoin index ETF. The pair plan selling 20,000 shares in 2015. Have the Winklevoss twins discovered the next big thing? Indulging in their victory over Zuckerberg, the Winklevoss twins claimed this spring to have “discovered” the next big thing that will eclipse Facebook Inc (NASDAQ:FB): Bitcoin. The symbol or ticker for the new ETF will be COIN and comes amidst a challenging environment. The Mt. Gox fund “disappearance” is in many ways like the initial stages of MF Global when customer money “vanished,” but was later “found” in a large bank. How the Winklevoss twins discovered the internet Almost considering themselves the Columbus of Bitcoin, the twins apparently overblown in telling the story of how they “discovered” the internet while partying the day away in Ibiza, with a reputation as a hub for electronic music and late night partying among Europe’s young, rich and idol class. “We were on vacation, and happened to bump into a guy who is mutual friend and he started to tell us about Bitcoin,” Tyler Winklevoss explained in the interview. “We were fascinated from day one.” This is all well and good but retail investors likely won’t get it and professional investors even more so. But there is a group who might. They could pitch the Bitcoin ETF as a volatility play to professional quantitative traders. The “currency” on which it is based has price swings that many in the derivatives and algorithmic trading spaces would salivate over. The only fear if for people who have the view that Bitcoin could become worthless, which is a hard trade from which to recover; unless the trader were to be shorting. What we think? This is excellent for Bitcoin because of the extra credibility for Bitcoin, it demonstrates that Bitcoin is a real currency and can now be traded on the NASDAQ; which not only adds to the prestige of Bitcoin and is likely to increase the price of Bitcoin it will also makes investment a lot more straight forward and accessible to people with less knowledge of Bitcoin. Our main concern is that people who are new to Bitcoin and not used to the volatility may get quite a shock, especially if they trade on margin; which could easily damage peoples portfolios and savings. This is not a Bitcoin problem, it is a problem with many idiotic retail traders who leverage themselves excessively. Too much exposure to something as volatile as Bitcoin could get you the dreaded margin call very quickly. So for people who know how to manage their risk and trade sensibly this is excellent tool which can give people some excellent trading opportunities and could be a great addition to an investors portfolio, however, it must be treated with the respect that it deserves and we hope the Winklevoss twins emphasise this.
You must login to comment