The Winklevoss Twins & 3IQ have big news out of Toronto. The Toronto Stock Exchange listed, finally, after three years, a Bitcoin Fund under the ticker QBTC.U. 3IQ manages it. The Windlevoss’ Gemini holds custody.
On the main website you can see its net asset value, so it’s just like a traditional fund like a mutual fund or an index fund. And this is huge in the sense that the main TSX and the venture group, which is for the smaller companies in Toronto. And then for the traditional Toronto Stock Exchange, these are aimed at retail buyers so this is focused on people that could just go to their local brokerages in Canada, and buy part of the fund. In the past, there’s been a lot of excitement about getting listed on the Chicago Mercantile Exchange and the CBOE. Futures exchanges attract a different type of investor, one usually more sophisticated, better-heeled that knows the ropes of high frequency trading. They know how to manage terrifyingly scary, but also exciting, margin position leverage. Not even that many trade futures when you compare these specialized traders versus retail investments in the general market. Retail trading makes it easier for people. You know they have a binary option exchanges, like Nadex, that will take the future positions themselves on a wholesale basis, but if you want to do something on the upside or downside, they kind of ladder it so it’s like if it hits a certain amount, you’ll get a payout or if it doesn’t then you know you can structure an order a few ways to match your risk profile and what you’re thinking. What you’re trying to do to time the market, which is a pretty difficult thing to do.
So, for it to be listed on the Toronto Stock Exchange is a watershed moment for Bitcoin. It could mean that these people that have heard about Bitcoin, that have kind of thought about it as a long term investment and have considered dabbling in it. You hear people like Mark Cuban saying that 1% of your assets should be invested in it as well as some endowment funds. I think Yale’s endowment fund is saying we’re going to put 1% into blockchain technology that’s getting adopted by large enterprise solution companies like Microsoft and IBM, so people that are looking for the long term investors are putting aside a certain amount to invest in it with the hopes that it’ll pop in the way that many people think that it might and the investment would do tremendously well.
In terms of mass adoption basis, these are individual investors that are taking stakes. You don’t have to be an accredited investor. You don’t have to have a Bloomberg terminal. You don’t have to have all these fancy certifications. You can go in and just buy part of the fund. I’m in no way affiliated with the fund, but, from what I read, it’s associated with the Winklevoss twins and Gemini. Out of really all the stable coins, I like Gemini, because it’s backed by the Winklevoss twins who are extremely well-heeled. And they partner with State Street, which is like the top partner for the NYSE and a lot of the biggest Wall Street organizations. And on top of that the Winklevosses have notoriety, connections with Zuckerberg, and their classmates at Harvard so they know all of the establishment guys in the banking industry, so I feel more comfortable giving my money, through custodial ownership to someone, who really has a lot to lose. I guess the same could be said for reasons why investing with Bernie Madoff, when it was incredibly connected and established professionally, with him even being on the board one of the exchanges in New York, but I just feel genuinely good about what the Winklevoss twins are doing for the crypto space blockchain. They’re doing the 60 minutes on American television. They’re doing all sorts of these adoption efforts to introduce people to Bitcoin, and it does benefit them, but I think they’re doing it well and not trying to hog all of the fame. They’re being smart and looking to the long-term. They did have some good forethought when they got pitched bitcoin in Ibiza and went ahead and got a massive position.
So I think the fund is moving in the correct direction with the best-in-class custodial entity in Gemini. It always makes me nervous when people bring in their own rogue lawyers or accountants. So, I’m interested to see the adoption that this gets in the weeks ahead. About 78,000 shares for $11 Canadian dollars were traded on the day that I looked.
I really would contend that this development with the Bitcoin fund listing on the Toronto Stock Exchange is as impactful and momentous as the CFTC agreeing to have Bitcoin be traded on this two futures exchange in the United States, and that, in and of itself, was a big hurdle, but I think it only goes to show that the three years they put in that shows the resistance, that was going on there with the nebulous legal situation with the Bit licenses and all sorts of uncertainty for this to go through. I think is a good move for the Bitcoin and the ecosystem at large.