by Joseph Young
The Winklevoss twins are awaiting the final approval process of their bitcoin ETF, called Winklevoss Bitcoin Trust, that will come to an end in March 2017. The Securities and Exchange Commission (SEC) will release its final statement within the next two months, which is anticipated to have a large impact the global bitcoin industry and ecosystem.
ETF, also known as an exchange-traded fund, by definition, is a marketable security that tracks a commodity, bond, or asset. Through regulation by a stock exchange and government-supported organizations such as the SEC, ETFs ensure their legitimacy and validity.
The highly anticipated launch of Bitcoin ETFs including the Winklevoss Bitcoin Trust and SolidX are presumed to impact the global bitcoin industry and trading ecosystem as they introduce bitcoin to a new market. Following the deployment of a Bitcoin ETF, traditional investors, corporations and high profile traders will be able to purchase bitcoin in a regulated ecosystem.
There exists a significantly large consumer base that by protocol cannot invest in stores of value or currencies like bitcoin individually. Large-scale corporations or investment funds will have to undergo a regulated channel to prevent potential issues that may arise stemming from regulatory conflicts.
Thus, the introduction of a Bitcoin ETF will most likely spur the demand for bitcoin at an unprecedented rate and drastically increase the volume of the digital currency in large markets like the US.
Experts and analysts, such as Bitfury Vice Chairman George Kikvadze, have expressed their optimism towards bitcoin’s performance in 2017, anticipating the launch of bitcoin ETF in the American market. Kikvadze emphasized the vital role Bitcoin ETFs will play in the development of the bitcoin price within 2017.
Analysts at mainstream media companies and consultancy firms such as David Zeiler of the Money Morning publication also assured investors to consider the possibility of a bitcoin ETF debut.
“Most of the Bitcoin community has assumed the approval of the first Bitcoin ETF will be a positive for the price of Bitcoin. That’s because it will add to the legitimacy of the digital currency in addition to providing a new avenue for people to invest in Bitcoin,” said Zeiler.
The Winklevoss Bitcoin Trust, in particular, was submitted for approval and published for public comment in July of 2016. However, the SEC publicly stated that a longer adoption and verification period would be needed to ensure the validity of the ETF.
The Winklevoss twins have secured partnerships to fasten and optimize the approval process, with some of the most important auditing and financial management firms in the US, including multi-billion dollar audit and financial services firm State Street.
The Winklevoss twins called in State Street to verify assets of the Winklevoss Bitcoin Trust and oversee the entire deployment process for the benefit of the SEC.
In a statement, both firms agreed that State Street will act as the administrator of the bitcoin ETF, and will take responsibility for the day-to-day administration and trading of the ETF. Since any potential issues regarding fraudulent trading or impracticality will ultimately affect the third party institution, State Street, providing the SEC with assurances that the bitcoin ETF currently under approval is, in fact, legitimate.
“State Street Bank and Trust Company (“State Street,”), the Administrator of the Trust, is responsible for the day-to-day administration of the Trust under the Administration Agreement and following the provisions of the Trust Agreement. This includes (i) maintaining the Trust’s books of account; (ii) calculating the Trust’s NAV in accordance with the procedures outlined in the Trust’s registration statement,” read the statement.