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Facebook's Winklevoss Bros file to launch Bitcoin Trust for investors

Zuck's terrible twins plan first IPO for virtual currency

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The Facebook-famous Winklevoss twins are set to become the first investors to launch an official Bitcoin-related IPO, with a new trust.

Cameron and Tyler Winklevoss, notorious for their battle with social network impresario Mark Zuckerberg over the creation of Facebook, said in April that they had hoovered up around one per cent of all the Bitcoins in the world - somewhere in the region of 92,000.

With the Bitcoin trading at $120 at the time, that put their holding at $11m, a value that has been knocked down to about $8m today as the digital currency stands around $89.

Nevertheless, the twins seem undaunted, filing with the Securities and Exchange Commission to launch a firm that would give investors shares while Winklevoss Bitcoin Trust deals with the actual Bitcoins. According to the filing, this will help investors "seeking a cost-effective and convenient means to gain exposure to Bitcoins with minimal credit risk".

The twins want to sell $20m worth of shares to kick things off, with each share worth 0.2 of a Bitcoin. The trust will take care of acquiring, securing and safekeeping the Bitcoins, leaving investors with no tasks or costs "over and above those associated with dealing in any other publicly traded security".

The filing's historical chart of the price of Bitcoins from 2010 to 2013 more than illustrates the currency's volatility, with a high of $266 in the second quarter and a low of $45 in the same three months.

Critics of the e-currency say the Bitcoin market is nothing more than an empty bubble, destined to pop, since the money is not currently used for actually buying goods and services and most of its value comes from being traded by speculators and from its limited pool.

Proponents of the digital cash, including the Winklevii, claim that the price volatility is just down to the market's immaturity and will settle down once folks realise virtual currencies are "here to stay". Supporters are also keen because Bitcoins are divorced from governments and central banks, created instead by "mining", where programmers solve maths riddles.

“We have elected to put our money and faith in a mathematical framework that is free of politics and human error,” Tyler Winklevoss said back in April. ®

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