Cameron and Tyler Winklevoss, the brothers that pushed to introduce the first U.S. bitcoin ETF, the Winklevoss Bitcoin Trust, could be closer to getting a bitcoin ETF to market.
Last week, the U.S. Patent Office granted the Winklevoss brothers’ Winklevoss IP a patent for a system to operate exchange traded products based on cryptocurrencies.
“Records show that Winklevoss IP applied for a patent on December 19, 2017, to facilitate a system for operating exchange-traded products holding digital currencies,” reports BTCManager.com. “The product explained in the patent application as ETP is similar to an ETF. An Exchange Traded Fund is a tradable security that tracks the price movement of a particular index or industry. ETFs are commonly used by investors to reduce risk and improve probable returns. The ETP as described by the patent will track the price movements of constituent cryptocurrencies.”
Winklevoss Bitcoin Trust History
The Winklevoss Bitcoin Trust has been in the works for several years, but the Securities and Exchange Commission (SEC) has yet to approve any ETF tied to bitcoin or any digital currency.
The proposed COIN ETF is designed to track a basket of shares tied to the digital currency, which has experienced volatile pricing. The Winklevoss Bitcoin Trust would have issued Winklevoss Bitcoin Shares. This is similar to how physically backed commodity ETFs are structured or structured as a grantor trust. Consequently, the COIN ETF would have held the underlying commodity to cover a portion of assets If bitcoin ETF sees huge inflows, the trust would be required to purchases bitcoins to meet creations.
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“Shares based on digital math-based assets may be redeemed using one or more computers by determining share price information based upon quantities of digital math-based assets held by a trust, electronically receiving a request from an authorized participant user device to redeem a quantity of shares, electronically transmitting a quantity of digital math-based assets from one or more origin digital asset accounts to one or more destination digital asset accounts associated with the authorized participant, and canceling the quantity of shares from the authorized participant,” according to the patent application.
Bitcoin is a decentralized digital currency, or cryptocurrency, based on a peer-to-peer network and can be exchanged through computers internationally without a financial intermediary. The system was first introduced by an unidentified programmer or group under the name of Satoshi Nakamoto in 2009.
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