The Winklevoss Twins, known famously for being associated with the creation of Facebook at one time, are beginning their next capital venture in the markets. On July 1, a filing was made with the Securities and Exchange commission to form a new public IPO, which would function as an ETF and facilitate the buying and selling of bitcoins via equity shares.
To make it simple, the Winklevoss's wish to turn the electronic currency known as Bitcoin into a commodity, trade it as an equity in the public stock exchanges, and do this under an ETF the same way gold (GLD) and silver (SLV) is traded through JP Morgan.
Logo courtesy of Forex Minute
There are many pros and cons to this attempted financial scheme, but few that would benefit the true users and recipients who hail bitcoin as an alternative currency to the fiat global system. On one hand, by legitimizing Bitcoin as a commodity, and having it recognized by the SEC on a public stock exchange, the ability for the Treasury Department, Secret Service, or other government agency to seize bitcoin operations would be hampered. However, it also means that the original foundation of bitcoin, an electronic currency exchange with a limited production capacity, can now be suspect to government price controls the same way the futures markets control paper spot prices rather than the market price of the physical commodity.
In the world of finance, it is said that if bankers could leverage their mothers teeth to make a profit they will. And although the Winklevoss Twins have a strong belief in the power and mission of the bitcoin currency, they also see the potential to exploit it for greater profits made in U.S. dollars, at the expense of the thousands of bitcoin owners who seek a different avenue for bitcoin's future.