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NEW YORK (InsideBitcoins) — When the Winklevoss Twins announced that they were launching the bitcoin exchange Gemini, it had many questioning whether the twins had run into too many regulatory hurdles launching an ETF and were moving on to new bitcoin projects.
Tyler Winklevoss told Inside Bitcoins that Gemini is “in addition to our ETF plans.”
With the expected goal of launching the exchange-traded fund in the first quarter, the twins have been talking with many investors trying to drum up support for the ETF. However, one question that comes up when discussing the bitcoin ETF — which will trade under the symbol COIN — is why buy an ETF when you can buy actual bitcoin instead?
“There are large security measures one needs to undertake in order to safely and securely store bitcoin. For those who are up for that and want to actually buy and sell bitcoin the asset, they can do so at Gemini.com,” Winklevoss explained in an email to Inside Bitcoins. “For those that just want bitcoin asset exposure or those, like institutions, pension plans, 401(k)s, etc., that cannot invest in bitcoins themselves, their only avenue to gain bitcoin exposure will be through a structure like an ETF where they are purchasing a security and not the underlying asset itself.”
COIN will not be the first avenue in which investors can buy bitcoin without actually holding the digital asset. Barry Silbert’s Bitcoin Investment Trust (BIT), a type of hedge fund, allows accredited investors to invest in the fund. Further, through some self-directed account providers, accredited investors can also acquire a position in the Bitcoin Investment Trust for their retirement accounts.
However, COIN would be a publicly traded ETF that would trade on the NASDAQ, so it would not require accredited investors or specific providers. There is significant regulatory approval still required though, for COIN to begin trading.
“…anyone who believes that gold is an important asset to hold in their portfolio should seriously consider adding bitcoin to their portfolio.”
Gold bugs appear to be a target investor for the Winklevoss ETF. On Monday, the twins headlined a session at the Inside ETFs conference in Florida where they pitched bitcoin and said that the cryptocurrency was an improvement to gold.
“We believe that anyone who believes that gold is an important asset to hold in their portfolio should seriously consider adding bitcoin to their portfolio. When we consider all of the qualities that make money money, Bitcoin when compared to gold matches or surpasses gold in every measure of money. This is why we and others call bitcoin “gold 2.0” or “digital gold,” Winklevoss explained in his email.
If investors buy into that thesis, COIN could see some substantial adoption when it launches.