How the Winklevoss twins went from losing Facebook to making trillions of dollars with Bitcoin and NFT

April
14, 2021

8 min read

The opinions expressed by the collaborators of Entrepreneur they are personal.


If you saw the movie ‘The Social Network’ (2010) you might remember twins Cameron and Tyler Winklevoss, played by Armie Hammer. Although they became famous for disputing and losing ownership of Facebook against Mark Zuckerberg, now they own a multibillion dollar empire thanks to the crypto asset business, mainly Bitcoin Y NFT.

In February 2008, gemelos Winklevoss reached a legal settlement with Zuckerberg, who agreed to pay them $ 45 million in Facebook stock and $ 20 million in cash. Six months later, the duo represented the United States at the Beijing Olympics in rowing competitions.

Take my money, Bitcoin!

Soon after, in 2012, Cameron and Tyler invested 10 million dollars in a rare new digital sensation: the bitcoin. Back then, the cryptocurrency cost just $ 8 per unit, a far cry from the record price of $ 63,300 that it is worth today.

The rise of Bitcoin, along with their investments in other businesses, has catapulted the brothers’ combined wealth, now 39, to $ 6 billion, according to Forbes Billionaires List.

Also in 2012, the twins founded the family office Winklevoss Capital Management to make risk investments. To date, the pair has invested in at least 25 digital asset startups.

One of his most recent investments was in the company Block-Fi, the giant of bitcoin loans in full growth. The company announced that it just raised $ 350 million in investment and is now valued at more than $ 3 billion.

In May 2013, the Winklevoss invested $ 1.5 million in BitInstant, a Brooklyn-based exchange that exchanged dollars for bitcoins in minutes for a fee. It is estimated that the operations of the platform represented 30% of the total purchases of Bitcoin at that time. Unfortunately, some of these were not entirely legal and the site closed by the end of that year, while the CEO, Charlie Shrem, was arrested and spent a year in prison.

After this setback and suffer the rejection of the community of Silicon Valley, the identical twins became owners of two companies that have brought them billions of dollars in profits: Gemini Y Nifty Gateway.

A fortune settled in the world of cryptocurrencies

Gemini Trust Co., founded in 2014, is an exchange and portfolio platform for cryptocurrencies, which enables customers to buy, sell and store digital assets. Two years later it became the first exchange authorized to buy and sell Ethereum, the second most popular digital currency behind the Bitcoin.

In October 2015, Gemini was one of the first cryptocurrency exchanges designated as trust bank by the New York State Department of Financial Services. In other words, it is subject to the same regulatory requirements as traditional banks.

Today, Gemini offers exchange and storage for 33 cryptocurrencies of the more than 300 that exist in the market. Its volume of operations was $ 29 billion in the last year, while their ‘confidence’ scores are at the level of crypto giants, such as Binance Y Coinbase.

In addition, gemelos Winklevoss have their own digital currency, the Gemini Dollar, which is pegged to the value of the US dollar and is therefore considered stable. That is to say that it is a stablecoin, such as the one that Facebook intends to launch under the name Libra.

Gemini also offers its customers a credit card with Bitcoin rewards and a savings account which pays a 7% interest on cryptographic deposits.

“Gemini is the bridge where people can migrate from centralized finance, from their current bank and into this new worldCameron said in statements cited by Forbes. “Our business model is not based on information or the monetization of privacy. It is based on the markets and commercial rates “added.

Conquering the terrain of the NFTs

In November 2019, Gemini Trust Co. compró Nifty Gateway, a digital art auction platform in the form of NFT o tokens no fungibles. At that time, the startup Founded by fellow twins Duncan and Griffin Cock Foster, it was only seven months old.

Thanks to the rush for these digital assets, last February Nifty Gateway contributed 75 of the $ 91 million in NFT art sales, according to data from CryptoArt.io. By the end of March, the platform had sold $ 132 million, that is, 70.2% of the 188 million dollars that the NFT collectors market has generated.

Nowadays, Nifty Gateway is the most exclusive digital art platform in the world, largely due to its careful selection of artists. Another tactic is to offer the works little by little, to get the maximum benefit. Thus, the 15% commission They charge artists for each transaction is quite juicy.

Its most famous artist is Mike Winkelmann, better known as ‘Beeple’, whose work ‘Every day: the first 5,000 days’ has become the most expensive NFT ever. The digital piece was sold in March 2021 at Christie’s auction house for $ 69 million.

On October 31, 2020, the work Crossroad‘the Beeple it was sold in Nifty Gateway for $ 66,666.66. The buyer put it up for sale again on the same platform and last February obtained 6.6 million, a profit of 90 times the original price.

Other Beeple NFTs, which were auctioned for a dollar each, are now worth hundreds of thousands of dollars.

“Now we are making 4 million dollars in five minutes”Cameron says of the works that a year ago would have brought in $ 50,000 on a good day. Tyler adds: “Basically the whole world of art, the whole world of entertainment, is knocking down the door”.

See also: Meet S! NG, the app to create and sell your own NFT from your cell phone or tablet

The future of Winklevoss in the digital economy

Cameron y Taylor Winklevoss visualize both companies long-term as a marketplace and portfolio for all types of assets, including property titles, passports, commodities, collectibles, video game characters, movies, music, and event tickets.

They also plan to integrate Gemini and Nifty Gateway in one product where NFTs are used as collateral for cryptocurrency loans. This would allow users to leverage their digital assets for financing without having to sell them.

“There is a membrane or an abyss between the old world and this new crypto universe. And we are the conduit that helps people transcend offline to online “, the brothers commented to Forbes.

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