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Author Topic: Can someone explain the value-add of the Winklevoss ETF?  (Read 2492 times)
jjdub7
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July 02, 2014, 11:19:43 AM
 #1

The Winklevoss ETF Fund - its essentially just a depository receipt for 1 BTC per share of the fund, right?  There isn't any internal investing that's done to grow the fund?  The only source of gains is just gains in the exchange rate?

Two questions:
1 - How does this add value over Coinbase?
2 - What's to stop someone from setting up a counter-fund, denominated in BTC, that's pegged to the dollar as a shorting mechanism?  Or, what's to stop someone from setting up equivalent funds? 

Obviously getting anything related to BTC up on Nasdaq is a big deal, but I don't really see the point of this unless they're actively lending starting capital to exchanges, etc to generate some revenue.


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July 02, 2014, 11:38:46 AM
 #2

I would say that it's the same as a GOLD ETF.  I have no interest in ever owning a brick of gold, but if I can buy it without the hassle of possession, I can include it in my portfolio.  I think it opens BTC up to people who would otherwise never take interest in being a part of it.
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July 02, 2014, 11:44:44 AM
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I would say that it's the same as a GOLD ETF.  I have no interest in ever owning a brick of gold, but if I can buy it without the hassle of possession, I can include it in my portfolio.  I think it opens BTC up to people who would otherwise never take interest in being a part of it.

That's what I thought.  Except unlike with gold, there really isn't any hassle using a wallet hosted by Coinbase.  So I'm wondering what the fee structure will be.  I can't imagine anyone who would be willing to fork out a 1% annual fee to hold this COIN fund...how do they expect to pay the administrators?


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July 02, 2014, 11:49:58 AM
 #4

I would say that it's the same as a GOLD ETF.  I have no interest in ever owning a brick of gold, but if I can buy it without the hassle of possession, I can include it in my portfolio.  I think it opens BTC up to people who would otherwise never take interest in being a part of it.

That's what I thought.  Except unlike with gold, there really isn't any hassle using a wallet hosted by Coinbase.  So I'm wondering what the fee structure will be.  I can't imagine anyone who would be willing to fork out a 1% annual fee to hold this COIN fund...how do they expect to pay the administrators?

You can't invest your IRA or 401K via Coinbase. You can with an ETF, although when the Winklevoss will ever get approved is anyone's guess. It took several years to get the first copper ETF approved by the SEC...

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July 02, 2014, 12:44:31 PM
Merited by stripykitteh (5)
 #5

Obviously getting anything related to BTC up on Nasdaq is a big deal, but I don't really see the point of this unless they're actively lending starting capital to exchanges, etc to generate some revenue.

There was a lengthy discussion on this in the "Economics" section a year or so ago.

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July 03, 2014, 05:32:01 PM
 #6

The value added is being able to buy and sell the value of a bitcoin very easily and quickly.  As someone noted, these exist for all precious metals such as gold, silver, and platinum and have generally been well received by the market.  So if you are new to bitcoin or interested in it, you do not have to set up a coinbase account, just buy some COIN etf with your brokerage account and you're in.  Obviously, this will target a more mainstream group than most of us.  (no offense)
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July 03, 2014, 06:35:00 PM
 #7

1 - How does this add value over Coinbase?

Scooping up Bitcoin in a Roth-IRA for tax free gains =  Grin.


2 - What's to stop someone from setting up a counter-fund, denominated in BTC, that's pegged to the dollar as a shorting mechanism?  Or, what's to stop someone from setting up equivalent funds?  

Regulatory hurdles and the capital to back it.  Same as with setting up any financial mechanism.

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July 03, 2014, 09:41:25 PM
 #8

One added benefit is the ability to short the value of BTC via shorting this ETF.

I sell Bhut Jolokia "Ghost" Chili seeds and other hot pepper seeds for BTC. PM me for details.
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