The Winklevoss twins are in the final stages of launching their Bitcoin Exchange Traded Fund (ETF).
The fund is waiting on the Securities and Exchange Commission’s (SEC) approval or denial to move forward, which has a deadline of October 2016.
The Bitcoin ETF will lower the barrier to entry for mainstream investors and traders to participate in the bitcoin markets. The markets will allow investors to hold shares of the fund rather than holding bitcoin. The ETF will be launched on the BATS Global Markets, and the ETF will use the Gemini Trust Company for the spot price and storage as every share will represent 0.1 bitcoin.
The Potential for Bitcoin
Currently, people can invest in bitcoin by buying off of the exchanges, but many people are still afraid of Bitcoin and don’t know how to keep their private keys secure. Accredited investors can use the Bitcoin Investment Trust to get exposure to bitcoin, but in order to be qualified you need a net worth of over a million dollars and have to invest a minimum of $25,000 in the OTC fund.
The bitcoin ETF may become a source for investors to participate in a developing technology and a hedge against a credit/inflationary crisis. Precious metals like gold and silver are normally bought as a hedge against economy uncertainty because of their limited supply and value. The potential for Bitcoin is that it has a limited supply like gold and silver but it can also be instantly sent as money.
The ETF makes it easier for banks and hedge funds to invest in the currency without having to worry about storage or security. Venture Capitalist have invested over a billion dollars in Bitcoin startups but many Wall Street investors don’t hold any bitcoin in their portfolio. The ETF may cause an increase of buying pressure in the bitcoin markets, as institutional investors get exposure to the currency. The price and innovation might increase as people start to see the real value behind the digital currency, which could kick start the consumer adoption phase.
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