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Winklevoss twins: Bitcoins better than gold

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NEW YORK (CNNMoney) — Tyler Winklevoss, one half of the duo known in popular culture as the Winklevii, thinks that the cybercurrency Bitcoin may be a better long-term bet than gold.

“It’s gold 2.0,” he said in a presentation at the Value Investing Conference in New York Tuesday.

Tyler and his brother Cameron, who shared the stage, outlined the bull case for bitcoins. They have been investors and are aspiring Bitcoin entrepreneurs. The twins recently filed paperwork with the SEC for a Bitcoin exchanged traded fund.

Like gold, the virtual currency retains its value regardless of what central bankers do to the money supply. But unlike gold, bitcoins are easier and cheaper to store.

That rationale is a popular refrain among Bitcoin bulls, who are fearful of currency wars and the intervention of the Federal Reserve and other central bankers.

The presentation by the Winklevoss twins was chock full of bold proclamations on how high the price could rise, i.e. $10,000 per bitcoin. Bitcoins now trade for $140.

Cameron Winklevoss said that another sovereign debt crisis could be a catalyst for a sharp move higher.

“We will see an implosion in the next year or two of a country’s currency, and it will be bigger than Cyprus.” he said, referring to the tiny European nation. The near-implosion of Cyprus’ banks and an ensuing bailout in March 2013 caused interest in the four-year old cybercurrency to surge. The price of a bitcoin eventually soared to a high of $266 in April before falling precipitously.

Scary? Yes, but a rise in the currency would be a big win for the Winklevoss twins, best known for their legal battle with Mark Zuckerberg over the origins of Facebook — as well as how the two were portrayed in the popular movie, “The Social Network.”

Because of SEC regulations they declined to discuss plans for their ETF. But they said that the biggest hurdle to investing in bitcoins is the difficulty in purchasing them.

“You have to be technically savvy, and there’s no insurance,” said Cameron Winklevoss, who along with Tyler, is a co-principal in Winklevoss Capital.

He added that once investors can buy bitcoins easily via an ETF similar to gold ETFs, mainstream investors will start jumping in.

But there are concerns about Bitcoin besides the volatility in the price. So far, bitcoins have proven virtually impervious to hackers, but the exchanges that trade bitcoins and the virtual wallets that hold them have been very vulnerable. Mt. Gox, the largest exchange, has had several outages.

In an SEC filing, the Winklevoss brothers outlined security as a key risk factor.

In their presentation, the Winklevoss twins gave few explanations on how storage systems for the virtual currency could become safer. They also admitted that governments around the world could crack down on bitcoins but that won’t stop people from using it.

“To shut down Bitcoin is to shut down the internet,” said Tyler Winklevoss.