Bitcoin rebound might be nearing its end

January 23, 2015 01:51 PM

News broke that the Winklevoss brothers, twins who battled Facebook founder Mark Zuckerberg in court, are working on creating a fully-regulated bitcoin exchange. As a matter of fact, their team seems to have made some progress. According to Dealbook,

“Now two of the biggest boosters of the virtual currency, Cameron and Tyler Winklevoss, are trying to firm up support by creating the first regulated bitcoin exchange for American customers — what they are calling the Nasdaq of bitcoin.


The brothers, who received $65 million in Facebook shares and cash in 2008 after jousting with its founder, Mark Zuckerberg, have hired engineers from top hedge funds, enlisted a bank and engaged regulators with the aim of opening their exchange — named Gemini, Latin for twins — in the coming months.


[The exchange staff has] been creating Gemini’s security infrastructure and trading engine from scratch, and already have a test model of the exchange running. They are planning to be ready to open the exchange as soon as they win regulatory approval from New York state’s top financial regulator, Benjamin M. Lawsky, the superintendent of the state’s Department of Financial Services.”

This is definitely good news for U.S. customers: a regulated exchange could possibly alleviate some of the concerns over bitcoin’s security, particularly in light of the Mt. Gox debacle and recent BitStamp problems. This ultimately comes down to whether the Gemini team will be able to develop and execute reliable security measures.

The next months will show if the exchange actually will start operating quickly. If another regulated marketplace, particularly one stemming from U.S. authorities, emerges, we may see a spike in the cryptocurrency’s popularity. We’ll also see if it might have any effect on the level of transaction fees currently observed on bitcoin exchanges.

For now, let’s take a look at the charts.

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About the Author

Mike McAra is a quantitative analyst focused on the economic reality, not theoretical models. His investment thinking is grounded on empirical evidence and common sense. Mike joined Sunshine Profits in 2009. He develops innovative investment tools, verifies usefulness of popular techniques, and provides thorough internal research.