The Winklevoss twins, arguably the world’s most ardent bitcoin-ers (and “one” of our 44 Innovators to Watch), this week kicked off an IPO process for a bitcoin investment fund. The proposed fund, however, is missing a key component: a pricing exchange. Without an exchange, the Winklevoss Bitcoin Trust is like a car being sold without wheels. The Winklevoss Bitcoin Trust would be a variation of an exchange-traded fund that would hold Bitcoins and issue shares on a secondary exchange. According to Bloomberg, the trust would be the first product in the $2 trillion ETF industry to track a virtual asset, rather than securities such as stocks and bonds or commodities such as gold and oil. It is unclear whether the SEC will allow for such an ETF. To say this would be a risky ETF is putting it mildly. Besides the fact that all sorts of bitcoin enterprises — and even bitcoins themselves — have been under repeated hack attack, nevermind the anti-money laundering issues, the method of valuing bitcoins is, well, imprecise today. From the Winklevoss IPO filing: Due to the peer-to-peer framework of the Bitcoin Network and the protocols thereunder, transferors and recipients of Bitcoins are able to [...]
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