How the Winklevoss Twins Amassed a $6 Billion Bitcoin Fortune
Here's how two brothers became Bitcoin billionaires.
Tyler and Cameron Winklevoss, better known as the Winklevoss
twins, have several claims to fame. You may have heard of their dispute with
Mark Zuckerberg over the creation of Facebook -- especially if you've watched
The Social Dilemma. If you're a sports buff, you might know they took sixth
place in the men's pairs rowing event at the 2008 Beijing Olympics.
But more than that, the Winklevoss twins are crypto pioneers
and Bitcoin billionaires. Their journey can offer up valuable lessons on how to
safely invest in cryptocurrency for the long term.
Keep reading to learn more about how their investments
unfolded.
The Winklevoss twins' Bitcoin journey
Facebook settlement (2008): The twins reach a settlement
with Zuckerberg for $65 million in a mix of Facebook shares and cash. They
claimed he copied their idea and some of the code they'd paid him to create.
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Winklevoss Capital (2012): The duo founded a company that
provides angel investments to early-stage companies and entrepreneurs. It has
invested in almost 100 projects and currently has 20 crypto-focused investments
in its portfolio.
Bitcoin investment (2012 and 2013): In April 2013, the
brothers announced they own approximately $11 million in Bitcoin through
Winklevoss Capital. Some reports suggest they bought some of their Bitcoin for
as little as $10 per coin. At that point, the duo was rumored to own 1% of all
the Bitcoin in circulation. Shortly after that announcement, Bitcoin's price
fell from $180 to $80 in a week -- the first of many dips on the crypto
rollercoaster.
BitInstant (2013): The Harvard graduates announced their
involvement in BitInstant, one of the first American Bitcoin exchanges.
Unfortunately, Charlie Shrem, the former CEO, was later arrested and sentenced
to two years in prison for operating an unlicensed money business. Prosecutors
said he knowingly traded Bitcoin that had been used for illegal drug
transactions and money laundering. BitInstant shut down later that year. The
brothers would later sue Shrem in 2018, claiming Shrem stole Bitcoin from them.
An undisclosed settlement was reached in 2019.
Foundation of Gemini (2014): Since the pair founded the
cryptocurrency exchange Gemini, it has built a reputation as one of the safest
places to buy, sell, and store cryptocurrency. It was one of the first to be
licensed by the New York State Department of Financial Services (NYSDFS). This
is significant because New York has some of the strictest crypto regulations in
the U.S. and only a handful of platforms can operate there.
Bitcoin surge (2017): In December, the price of Bitcoin
peaked at over $18,000. Its value has risen and fallen since then, but the
Winklevoss twins did not sell.
BlockFi investment (2019): Winklevoss Capital invested in
BlockFi, one of the first crypto lenders in the U.S. Now it is a crypto
exchange that also pays decent savings rates.
Nifty Gateway (2019): Gemini bought Nifty Gateway, a
platform for non-fungible tokens (NFTs) -- or Nifties as the company calls
them. NFTs are unique digital collectibles, often art or music, which allow
artists to profit from digital artwork. NFTs are another aspect of the
blockchain world that has boomed in recent years.
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Crypto credit cards (2021): Both BlockFi and Gemini have
opened up waiting lists for crypto credit cards set to launch this year,
showing the brothers are again at the forefront of the industry. These crypto
credit cards will allow you to earn rewards in Bitcoin and other digital
currencies, as well as giving potential trading discounts.
Bitcoin surge (2021): This has been the year Bitcoin reached
extraordinary highs. It started the year valued at around $30,000. By March, it
had risen to over $60,000. The exact details of what the brothers own are
unclear, although we know they haven't sold much of their original investment.
Forbes estimates they currently own 70,000 Bitcoins as well as other digital
assets.
What lessons can we learn from the Winklevoss twins?
The twins embraced the digital economy early and have made
it clear they think Bitcoin is better than gold. From lawsuits to holding
tight, here's what we can learn from the Winklevoss story -- even if we don't
have $11 million to invest in digital currencies tomorrow.
Invest for the long term. The Winklevoss twins have held on
to their Bitcoin through the highs and lows. According to media reports, the
only time they sold any Bitcoin was to set up Gemini. They researched digital
currencies and believe in the transformative power of this technology. And they
think this is only the beginning for Bitcoin. A good takeaway from this is to
invest in cryptocurrencies, stocks, or funds that you believe will perform well
in the long run. That way, you won't be as impacted if your assets fluctuate in
the short term.
Choose a reputable crypto exchange. The twins' first taste
of crypto was with a man who later turned out to be a criminal and stole some
of their coins. You can avoid that mistake. These days, there are several
reputable cryptocurrency exchanges where you can buy Bitcoin safely and
cheaply.
Live below your means. Even when the first Bitcoin peak took
their assets to over a billion, the brothers didn't rush out to buy flashy
cars. In fact, in 2018, only one of the brothers owned a car at all, and it was
bought secondhand. Sure, Bitcoin has made some people into millionaires
overnight. But there's a more dependable way to build wealth: Don't spend every
cent you earn, and invest money when you can. Putting money aside every month
will help you to have a nest egg ready when you retire. You might even be able
to retire early.
We're in the midst of a Bitcoin gold rush, and it's easy to
get caught up in the frenzy. But it's important to remember that cryptocurrency
investments are highly volatile. And it's never a good idea to invest money you
can't afford to lose. The Winklevoss twins show us how important it is to think
long term. That way you avoid panic selling if your investments lose value, or
panic buying for fear you might miss the boat.
Tap into the currency of the future
Bitcoin has evolved from an obscure digital token used by a
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