Do you remember the Winklevoss twins?
Cameron and Tyler Winklevoss. They are Olympic rowers (they competed in the men’s pair event at the 2008 Beijing Olympics), and they are co-founders of a social networking site called HarvardConnection. You probably haven’t heard of HarvardConnection but in 2004 the Winklevoss twins sued Mark Zuckerberg alleging that he had stolen the HarvardConnection concept to create Facebook — they received a payout of $65 million and are now venture capitalists.
According to Crypto Slice News they invested in Bitcoin and in this article we take a look at what might be driving their interest.
The investment begins
In 2013 the Winklevoss twins (through their company Math-Based Asset Services LLC) registered a Bitcoin-based investment fund called the Winklevoss Bitcoin Trust. Using the trust as a springboard they then led the creation of a $1.5 million funding package for BitInstant — a Bitcoin payment processor. This didn’t work out so well as in early 2014, Charlie Shrem — the CEO of BitInstant — was arrested and charged with money laundering as part of the fallout from the FBI’s investigation into the Silk Road site.
However, the Winklevoss twins were soon back in the Bitcoin game with the launch of Winkdex — a financial index that tracks the price of Bitcoin. With the volatility of the value of Bitcoin, often fuelled by investor speculation, an index such as this does provide some useful insights — the index uses data from seven different exchanges (weighted by volume) to provide price updates.
What do they hope to achieve?
On current estimates the Winklevoss twins own around 1% of all Bitcoin currency and they’re optimistic about the future. They are widely reported as having said that they believe Bitcoin has the potential to be bigger than Facebook — empowered by decentralisation to create a new level of financial openness and transparency, with direct international payment capabilities.
They are predicting that the market capitalisation of Bitcoin could quickly reach $400 billion, with the potential to become as valuable and solid as a gold-like asset class, possibly reaching a market capitalisation of over $1 trillion.
It’s clear that the twins have a lot to gain if Bitcoin does become a sustainable, digital, virtual, cryptocurrency.
Building the infrastructure
The Winklevoss twins are doing the best to ensure that Bitcoin does succeed. One of the inhibitors of growth for Bitcoin has been the scandals such as Silk Road and Mt Gox undermining public confidence and credibility. The help combat this the Winklevoss twins are building infrastructure to help secure the legitimacy of the currency. They have recently unveiled a new Bitcoin exchange called Gemini; and they are continuing to build their Bitcoin investment fund which can be used as an attractive hedge against inflation.
The future of Bitcoin remains uncertain and fascinating to observe. It’s clear that the Winklevoss twins are clearly going to be major players to keep an eye on as the game of creating an international cryptocurrency unfolds.
