When I was 19, my best friend and I spent the summer backpacking around Europe. We booked our flights and Eurail passes by physically going into a travel agency, sitting down at a desk and running through flight options with an agent. The process took over an hour and, a week or so later, an envelope with our paper tickets was ready to pick up back at the agent’s office.
When’s the last time you went into a travel agency? I haven’t been to one in years. Instead, I booked my family’s last vacation over a glass of wine through Expedia.ca. I probably won’t even bother to print out my tickets (I can just use my phone).
The demise of travel agents as a traditional gateway to flights and hotels popped into my head on Friday when I came across this update from Bloomberg on how things are going with those Winkelvoss twins and their bitcoin exchange-traded fund (ETF).
In a lot of ways, bitcoins and ETFs are both the offspring of disintermediation—the push to democratize money that is transforming financial services. Like travel agents before them, they aim to erase traditional roles like portfolio managers and banks. Peer-to-peer currencies allow individuals to exchange a single currency across borders and with the click of a mouse while ETFs let investors buy and sell exposures to just about anything without a manager pulling the strings.
Put the two together—bitcoins and ETFs—and what you get is a wild child of disintermediation. And, according to Bloomberg, it’s now a few steps closer to becoming a reality. I first wrote about the Facebook-famous twins and their ETF last year when they filed a proposal with the U.S. Securities and Exchange Commission to create an ETF based on bitcoins. Now, according Bloomberg, the most up-to-date prospectus shows a couple of positive developments. First, there’s a ticker—COIN—and second, the risk section has been beefed up. According to Bloomberg, that means things are ticking along with the proposal—and it could be a reality by the end of the year.
So will a bitcoin ETF fly? And if so, will it see the bitcoin space grow in credibility and assets? I have no idea—but if it gets off the ground, watching this wild child grow up or founder will be anything but boring.