Winklevoss: Bitcoins Are ‘Better Than Gold’

January 26, 2015



Bitcoins are “better than gold,” offering investors store of value, inflation hedging and access to a still-growing global ecosystem that’s the future of the payments industry, the Winklevoss brothers said at Inside ETFs today.


The digital asset—or “this decade’s great innovation”—already has a strong following globally, but could quickly go mainstream in the U.S. once it’s easily accessible in an ETF wrapper. The Winklevoss Bitcoin Trust ETF (COIN) is still in registration with the Securities and Exchange Commission, but it should allow investors to offload the risk and the storage concerns, much like the SPDR Gold Trust (GLD | A-100) does for gold, Tyler and Cameron Winklevoss said.


The brothers are also behind, an upcoming bitcoin exchange that should be perceived as the “Nasdaq of bitcoins”—one of two U.S.-based bitcoins exchanges coming to market. The first, Coinbase, is opening for business next week, according to CNN Money.


“If we were to rewind 20 to 25 years ago, and someone asked you whether you would like to invest in the new technology Internet, you’d say absolutely,” Tyler Winklevoss said. “But there’s no easy way to buy Internet. Bitcoin is unique if you believe in the promise of the bitcoin network.”


“You can buy a piece of that network, and you don’t have to pick companies or winners,” he noted of the ETF currently in the works.


Risks Abound

There are risks, and while they weren’t legally allowed to go into details about the risks a bitcoin ETF faces due to regulatory restrictions, they did emphasize that volatility is high, and should be expected in a market that’s global in scope and still largely unregulated.


“People fixate on price, which is certainly important,” Cameron Winklevoss said. “The volatility is due to the fact that it’s a new technology, unregulated and just now beginning to be regulated. The framework is being built, but in a commodity that’s global and 24/7, there are a lot of gyrations on it. You have to bear with it.”


Who is the investor for a bitcoin and, ultimately a bitcoin ETF? Anyone, really. According to the brothers, hedge funds and venture capitalists have been quick to embrace bitcoins, but anyone who believes gold is a store of value could easily own bitcoins. After all, “bitcoins are like gold.”


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