Bitcoins, the digital currency, are the best performing asset of 2013, even after a quick boom-and-bust cycle earlier this year. Exchange traded fund investors may soon be able to gain exposure to the strengthening currency as the Winklevoss twins push for wider awareness.
“An ETF can potentially make it successful for mainstream investors,” said Cameron Winklevoss, reports Brendan Conway for Barron’s.
Tyler and Cameron Winklevoss at the Value Investing Congress in New York explained that investors who purchase Bitcoins directly will have to deal with “pain points and friction.” The brothers have filed to launch an exchange traded product backed by bitcoins. It’s not clear whether the SEC will give the bitcoin ETF clearance to list. [Winklevoss Bitcoin ETF: Crazy, or Crazy Like a Fox?]
“Buying Bitcoin today, it’s sort of a scary proposition. You store it on a USB stick, [you have to be somewhat]technically savvy … [If you’re transacting in] large amounts of money, there’s no real insurance aspect,” Cameron Winklevoss said.
On the other hand, the ETF investment vehicle helps mitigate the risks and hassle of buying the coins directly.
“An ETF can help solve the purchasing friction in terms of security. It can offload that to the ETF… Storing Bitcoin takes expertise [and]accessibility. …. It’s similar to how [people]can’t buy gold bars so they instead buy an ETF,” he added, comparing the structure to something similar to physically backed precious metal ETFs, according to the Barron’s report.