If at first you don’t succeed, try Bitcoin
Twins Cameron and Tyler Winklevoss are taking a big step away from their Facebook past and into the murky future of Bitcoin. Their legal battles with Facebook founder Mark Zuckerberg brought them fame in the film “The Social Network” — and a nice pile of money once they settled. The twins have turned a sizable chunk of those millions into Bitcoin.
Now they’re attempting to take that much-hyped digital currency mainstream by launching a fund where regular investors can buy and sell Bitcoin just like a stock. Easier access to the volatile quasi-currency backed by nothing and understood by few worries Bitcoin skeptics.
“Stay away,” warns Georgetown finance professor Jim Angel. “You’ve got a better chance of holding on to your money by going to a casino then you do by investing in Bitcoin.”
Even the tall, Olympic rower twins warn potential investors to strap in for a wild ride. In the Winklevoss’s SEC filing, the risk section sprawls out over 18 pages. They explain Bitcoin could be hacked. And it might actually be illegal.
Clearly, this is not something people should bet their retirement savings on. But the twins’ venture could appeal to sophisticated investors, even Bitcoin foes.
“For the many, many folks who are very skeptical about the future of Bitcoin, it’ll give them a chance to bet against this,” says Max Wolff, senior analyst at Greencrest.
Right now, investing in Bitcoin requires buying Bitcoins. It’s a relatively complicated process and some people are hesitant to share banking information with sites that have had reliability problems. Right now, only the most dedicated and passionate Bitcoin boosters bother with owning them. The Winklevoss venture would make Bitcoin investing as easy as trading General Electric.
Bitcoin is just part of the twins’ diverse post-Facebook life. They’ve invested in the shopping tool Hukkster as well as SumZero, a site connecting money managers. (Its founder is Divya Narendra, a Harvard pal of the twins, who was also featured in “The Social Network.”) These days, the Winklevosses are known for a hands-on approach at the companies they finance.
“A lot of startups get capital,” explains SumZero senior vice president Nicholas Kapur. “Not a lot are fortunate to get very, very involved investors. And that’s what we get with Tyler and Cameron.”
SumZero shares office space with the twins. Kapur says they’re not single-minded clones, as they’re sometimes popularly perceived. But they’re definitely a tight team that moves decisively together.
“Certainly they’re a unified front,” he says. “Generally when you get one, you get both.”
And they’re united in doubling down on Bitcoin.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
