Having built one of the largest cryptocurrency exchanges on the planet, the Winklevoss Twins are turning to mobile with the launch of the Gemini app.
The app will allow users to buy and sell cryptocurrency, view market prices, and set alerts. There’s also a neat “Buy the Cryptoverse” function to purchase a basket of cryptocurrencies all at once, much like buying an index fund.
The design is slick and minimal in a bid to broaden the appeal of cryptocurrency, removing much of the chaos and clutter of competing exchanges. It will also integrate Gemini’s “institutional-grade security.”
The Winklevoss Twins are among the few bitcoin billionaires and are reported to own more than 1% of the total bitcoin supply. They launched the Gemini exchange in 2014 with a view to creating a secure, mainstream outlet for purchasing cryptocurrency.
Gemini made headlines earlier this year when it secured full insurance coverage for its exchange and custody services.
Meanwhile, the Winklevoss Twins have put forth numerous bitcoin exchange-traded fund (ETF) proposals, but have been knocked back repeatedly by the Securities and Exchange Commission (SEC).
“We spent the last three years building the world’s most trusted cryptocurrency platform and today we are excited to extend it into your hands and allow you to engage with cryptocurrency wherever you are and whenever you want.”
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It’s funny… I was re-reading the Bitcoin white paper last week as it’s now ten years old.
Bitcoin’s founder Satoshi Nakamoto constantly refers to bitcoin as a way to avoid using a “trusted third-party,” like banks or financial institutions.
And yet it seems like all anyone can talk about right now is Wall Street adoption of crypto and banking bitcoin.
Just look at what happened in the last few weeks:
1. Coinbase is now a “qualified custodian” to hold cryptocurrencies in New York (the same designation given to banks that hold your money). (CoinDesk)
2. Mastercard filed a patent to launch a “fractional reserve” crypto bank. (CCN)
3. Bank of America filed a patent for a crypto storage system. (CCN)
3. Gemini announced full insurance for its exchange and custody service. (Block Explorer)
4. BitGo is approved as a qualified custodian to hold cryptocurrencies. (Bloomberg)
None of these stories are groundbreaking on their own.
But it’s a very clear trajectory. Major “third party” institutions are competing to hold (or bank) cryptocurrencies on behalf of others.
What we’re talking about is the quiet emergence of bitcoin banks.
Are “Bitcoin Banks” a Good Thing?
On the one hand, cryptocurrency institutions like Coinbase, Gemini, and Bitgo are taking storage security seriously. With almost $1 billion cryptocurrency stolen in exchange hacks this year alone, we need to provide better security and storage options for traders.
Secure custody also gives confidence to institutional investors who are looking to enter the space. Arguably, the next big influx of capital will come from institutional investors, who need trusted custody before making large investments.
Bitcoin was designed to operate outside the banking system. It was created so that you don’t have to trust a bank or third-party.
Crypto evangelists (ourselves included) have always advocated keeping your cryptocurrency off exchanges entirely. Unless you’re trading large volumes of crypto every day, there’s no good reason to store your bitcoin on Coinbase, Gemini or any other exchange.
Instead, you need a safe, offline, cold-storage solution where you control the private key (with backups, of course). It might be more hassle, but it’s worth it for peace of mind and security.
It seems our newsletter subscribers agree, especially when it comes to big banks wading into crypto storage. We asked them, on a scale of 1-10, how much they would trust an institution like Bank of America to look after their cryptocurrency. Every respondent picked either one or two out of ten.
Like it or not, bitcoin banks are coming. It might start small with custody solutions at Gemini and Coinbase, but the big-names are slowly getting involved. While this should bring more legitimacy to the cryptocurrency world, there are worrying ramifications, too. Mastercard filing a patent for a “fractional reverse crypto bank” is a worrying precedent that pulls bitcoin towards the very system it was designed to avoid.
Use our news to inform cryptocurrency trading decisions, stay up-to-date on happenings in the industry, and more!
Gemini To Become First BitLicensed Exchange To Offer Trading in Zcash
The New York State Department of Financial Services has authorized Gemini Trust Company to offer trading of Zcash, Litecoin and Bitcoin Cash. Tyler Winklevoss, Chief Executive Officer of Gemini Trust Company, LCC said, “We are proud be the first licensed exchange in the world to offer Zcash trading and custody services and look forward to providing customers with a safe, secure, and regulated place to buy, sell, and store Zcash, an incredible new form of digital cash.”
Crypto Mining Company Coinmint Moving To Revamp 1,300 Acre Alcoa Plot
Once used for aluminum smelting, an Alcoa plant in Upstate New York is going to be converted into one of the world’s largest bitcoin mining centers. CNBC reports Coinmint said Tuesday it “would invest up to $700 million in the upstate New York location, which it expects to be the biggest bitcoin mining center in the world. The project will create an estimated 150 jobs over the next 18 months.”
Cryptocurrency Theft Malware Now An Economy Worth Millions
According to a new research report titled “Cryptocurrency Gold Rush on the Dark Web” by Carbon Black, the market for malware and tools designed for the theft of cryptocurrency is growing swiftly. ZDNet states, “The researchers estimate that over the past six months alone, a total of $1.1 billion has been stolen in cryptocurrency-related thefts, and approximately 12,000 marketplaces in the underbelly of the Internet are fueling this trend.”
Gemini, the New York-based cryptocurrency exchange owned by Tyler and Cameron Winklevoss, will become the “world’s first licensed ZCash exchange,” according to an announcement made via the company’s official blog this morning.
Starting on Saturday, May 19th at 9:30am EDT customers will be able to begin depositing ZCash they already own onto the exchange in preparation for when trading begins on Tuesday, May 22nd at 9:30am EDT. At that time, trading goes live with the following trading pairs on Gemini: ZEC/USD, ZEC/BTC, and ZEC/ETH.
The New York Department of Financial Services, who oversees New York’s controversial Bitlicense, approved Gemini adding Litecoin and Bitcoin Cash, in addition to the privacy-focused ZCash. The addition of ZCash is of particular significance due to Gemini being the world’s first licensed exchange to offer the privacy coin, but also because privacy coins have faced scrutiny over criminals potentially abusing the anonymous nature of the coin. Regulators in other countries, most notably Japan, have been targeting privacy coins, even requiring some exchanges in the region to delist privacy coins such as ZCash and Monero.
Along with Gemini’s “first,” the New York Department of Financial Services also becomes the first regulatory agency across the globe to supervise ZCash.
Maria T. Vullo, superintendent of the NYDFS offered the following statement about issuing the approval:
“This action continues New York’s longstanding commitment to innovation and leadership in the global marketplace. With smart and thorough regulatory oversight, the development and long-term growth of the industry will remain thriving,”
In a separate phone interview, Cameron Winkevoss made reference to the growing discomfort regulators feel toward privacy coins:
“Today demonstrates that through education and collaboration and with the right controls in place, regulators can get comfortable with privacy technology.”
ZCash’s price skyrocketed over 25% to a peak of $349 in the wake of the news.
Bill Gates said that he would short bitcoin if he could. Tyler Winklevoss is calling his bluff.
Speaking with CNBC, the Microsoft co-founder and prolific philanthropist said that he wished there was an easy way to short bitcoin so that he could take advantage of the opportunity.
“As an asset class, you’re not producing anything and so you shouldn’t expect it to go up. It’s kind of a pure ‘greater fool theory’ type of investment,” he said. “I agree I would short if there was an easy way to do it.”
That has been a common refrain from bitcoin bears for quite some time, but there’s just one problem — it no longer passes muster.
Bitcoin futures products have existed on cryptocurrency exchanges such as BitMEX and OKEx for years, but skeptics could believably feign hesitation to use these “unregulated” trading platforms.
However, in December, two regulated US exchanges — CBOE and CME — launched conventional bitcoin futures products, enabling bulls and bears alike to stake out their bitcoin positions in a secure marketplace.
That’s why Tyler Winklevoss put Gates on notice that he needs to put his money where is mouth is.
Winklevoss — who along with his brother Cameron co-founded cryptocurrency exchange Gemini — challenged Gates to make good on his alleged desire by opening a bitcoin short position on Chicago exchange CBOE.
“Dear @BillGates there is an easy way to short bitcoin,” he wrote on Twitter. “You can short #XBT, the @CBOE Bitcoin (USD) Futures contract, and put your money where your mouth is!”
Those futures, incidentally, are based on pricing data supplied by Gemini’s daily two-sided auctions.
And while these products may be too pricey for the average retail investor, Gates is not likely to have much trouble cobbling together the funds necessary to trade CBOE’s 1 BTC contracts.
His tweet also tagged Berkshire Hathaway Warren Buffett, who — along with Gates, who sits on the company’s board of directors — was in Omaha, Nebraska for the firm’s annual shareholders meeting.
Buffett, a longtime cryptocurrency bear, took time during the meeting to bash bitcoin as “rat poison squared,” a sentiment his vice chairman Charlie Munger later expounded upon in vivid language.