The Winklevii move out of Zuckerberg's shadow, and into Bitcoin

Is it just media hype?

The Winklevii have announced they are going to venture out from under Zuckerberg’s lengthy shadow in an attempt to re-establish themselves as dotcom entrepreneurs.

In a headline grabbing announcement, which is as devoid of substance as it is full of Hollywood hype, the two brothers intend to set up Math-Based Asset Services LLC to sponsor a Bitcoin Trust.

This trust will float on the stock exchange, initially selling $20m worth of shares. There has yet to be an answer on whether an exchange will accept the offering and the trust that will hold the portfolio is yet to be set up.

Despite most news sites picking up on the story, there are no real financial details. If media attention was the goal here, that certainly seems to have been achieved.

The SEC filing comes with a raft of risks, many of which would be enough to deter any serious investor. This one I find especially chilling: "A decline in the popularity or acceptance of the Bitcoin Network would harm the price of the Shares."

In April the twins claimed in an interview with the New York Times that they owned 1 per cent of all Bitcoins in existence. That amounts to what was worth $11m when Bitcoin was at its peak in March but is now worth $8m.

As the SEC filling reminds us, that fall of $3m over just a period of a few months is a result of nothing more than a decline in popularity. Nothing else is keeping the Bitcoin boat afloat.

The risks don’t end there. The SEC filing warns that as "the sponsor and its management have no history of operating an investment vehicle like the Trust, their experience may be inadequate or unsuitable to manage the Trust".

The twins said in the New York Times interview their faith in Bitcoin was down to it being a finite currency, that when 2040 rolled around and the Bitcoin tap was turned off it would result in the price of Bitcoin rising ever higher.

Bitcoin, though is not as finite as people seem to think. The reason being, I can divide my Bitcoin as many times as I want. Unlike tradition currencies, which are tied to physical tender, I can very simply pay someone 00000000.1 Bitcoin.

Judging by the amount of interest Bitcoin received from amateur speculators, many of which have had little or no dealings with stocks, share or currency exchange, the Bitcoin Trust could engender a similar interest.

People should be very wary of investing in something that is buoyed along by media hype, popularity and remains an unknown quantity, beset by problems.

Winklebros. Photograph: Getty Images

Billy Bambrough writes for Retail Banker International at VRL financial news.
 

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The murder of fearless journalist Pavel Sheremet must be solved - but Ukraine needs more

Sheremet was blown up as he drove to host a morning radio programme

On 20th of July Kiev was shaken by the news of the assassination of the respected Belarusian journalist Pavel Sheremet. Outside the ex-Soviet republics he was hardly known. Yet the murder is one that the West should reflect on, as it could do much to aggravate the Ukrainian-Russian conflict. 

Sheremet was one of the most significant and high profile investigative journalists of his generation. His career as an archetypal  examiner of the post-Soviet regimes in Belarus, Ukraine and Russia bought him fame and notoriety in the region. From 1997 onwards Sheremet became a name for fearless and non-partisan interrogation, both in print and as also as TV presenter. He paid the price early on when he was incarcerated by the Belarus government, then stripped of his Belarusian nationality and deported. Such is the way of things in the region.

Taking up residence in Kiev, Sheremet became immersed in interrogating the political life of Ukraine. He wrote for the Ukrayinska Pravda publication and also helped to develop a journalism school. Under these auspices he was a participant of a congress, "The dialogue between Ukraine and Russia", in April 2014. He reported on beginnings of the Euromaidan uprising. He warned of the rise of the concept  of "Novorossia" and suggested that Ukraine needed to reset its current status and stand up to Russian pressure. After the Russian occupation of Crimea his blame for the Ukrainian government was ferocious. He alleged that that they "left their soldiers face to face the [Russian] aggressor and had given up the Crimean peninsula with no attempt to defend it." These, he said "are going to be the most disgraceful pages of Ukrainian history."

Sheremet was blown up at 7.45am on 20 July as he drove to host a morning radio programme.

Ukraine is a dangerous place for journalists. Fifty of them have been murdered since Ukraine achieved independence. However, this murder is different from the others. Firstly, both the Ukrainian President and the Interior minister immediately sought assistance from FBI and EU investigators. For once it seems that the Ukrainian government is serious about solving this crime. Secondly, this IED type assassination had all the trappings of a professional operation. To blow a car up in rush hour Kiev needs a surveillance team and sophisticated explosive expertise. 

Where to lay the blame? Pavel Sheremet had plenty of enemies, including those in power in Belarus, Russia and the militias in Ukraine (his last blog warned of a possible coup by the militias). But Ukraine needs assistance beyond investigators from the FBI and the EU. It needs more financial help to support credible investigative journalism.   

The murder of Pavel Sheremet was an attack on the already fragile Ukrainian civil society, a country on the doorstep of the EU. The fear is that the latest murder might well be the beginning of worse to come.

Mohammad Zahoor is the publisher of Ukrainian newspaper The Kyiv Post.