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Winklevoss twins plan multimillion dollar Bitcoin trust

Brothers to work it out
Tue Jul 02 2013, 12:20
Winklevoss Twins

DISGRUNTLED FACEBOOK INVENTORS the Winklevoss twins plan to set up a $20m Bitcoin trust, according to reports.

The brothers have both linked to New York Times Dealbook stories about their plans, but are yet to respond to our request for comment and more information. The Winklevoss Capital website shows Bitcoin as an existing investment, but doesn't highlight this latest move.

Reports including the one linked to by the twins said that Cameron and Tyler Winklevoss have submitted a filing to US securities regulators asking for permission to set up the $20m fund.

The filing said that the Bitcoins will be put into a basket that people can invest in, and should serve as a soft toe-in to the growing digital currency.

"The Shares are designed for investors seeking a cost-effective and convenient means to gain exposure to Bitcoins with minimal credit risk," it said. "The Sponsor believes the Trust to be the first exchange-traded product that seeks to track the price of a Digital Math-Based Asset such as Bitcoins."

The maths based digital currency does not have the backing of any large financial institutions and Bitcoins are created through sheer number crunching.

There is a cap of 21 million on the number of Bitcoins that can be created, and we are around half the way there.

Their value has fluctuated wildly this year and is on the downhill side of a serious spike.

They are catching on though and in some places you can even buy a pizza with them. The success of the Winklevoss twins' plans depends on their acceptance by the financial industry.

"In addition, investors should be aware that there is no assurance that Bitcoins will maintain their long-term value in terms of purchasing power in the future or that the acceptance of Bitcoin payments by mainstream retail merchants and commercial businesses will continue to grow," added the filing.

"In the event that the price of Bitcoins declines, the Sponsor expects the value of an investment in the Shares to decline proportionately." µ

 

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