Gemini and the markets; a twin rise and fall.

Ten days ago today (23/01/2015) the somewhat notorious Winklevoss twins announced they were funding and founding a shiny new Bitcoin exchange with an extra edge; it would be based entirely in the state of New York and would be fully compliant with the necessary US legislation. The exchange (modestly named Gemini) will thus protect the deposits and the twins’ no-expense-spared approach to security will potentially stand them apart from a frontier crowd of other exchanges. 

    This came three days after Coinbase received $75 million from a round of funding including some impressive Venture Capitalists. Combined; there was a noticeable affect on the market but it wasn’t sustained (is it ever?) 

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   Since then we have seen a now-familiar pattern of rapid movement and a rapid return. The markets jumped $25 in 24 hours and then rose another $50 before briefly breaking the $300 mark. This was all short lived and there remained questions over when Gemini would be released and in addition Coinbase suffered as the governments of New York and California both released statements asserting that Coinbase did not have regulatory approval yet. What goes up, must come down; and this is no more true as the market returned to $227 in just five days. 

    What question marks remain of Gemini? Mainly; there’s a big delay in the form of New York’s BitLicense - something yet to be granted by the Department of Financial Services and the twins have been clear that they will not open for trading without that approval. Although it is crucial that they do receive that license and have clearly poured money into their compliance team (poaching the head of Information Security from the hedge fund Bayswater) there is no guarantee of success and the details of the license are yet to be finalised.

    They’ll be more waves from the Winklevoss’s project in the coming future of course. We should all be on the look out for any announcements regarding their compliance status but there are a few other things;

  • The exchange is being built from scratch and as such we shall all wait in anticipation to see just how robust the code will be in the surge of users it will surly garner. Any downtime and we will see a triangle shaped drop in price with a quick return.
  • When a launch date is announced this may affect prices a little. Big delays after being licensed may cause a little disillusion to spread but it will likely be insignificant.
  • Details. We’re yet to see a fee structure, sign-up requirements and importantly whether non US citizens will be permitted to trade on this exchange.

“We’ve never sold a Bitcoin. We’re in it for the long haul.” - Cameron Winklesvoss 

Postscript. The those asking me to reference the 'Wilklevii' I will not put aside pedantry in seeking a funny word (a 'Winklevii' is a very funny word).  "Winklevoss"  is probably an anglicisation   of  "Winkelvoss" - a dutch surname which would pluralise to "Winkelvossen". We'll be having no more of these "Winklevii" shenanigans now I hope.