Why The Winklevoss Bitcoin ETF Ticker Matters [Yum! Brands, Inc., Southwest Airlines Co, SPDR Gold Trust (ETF)]

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May 28, 2014 1:54pm NYSE:BOND NYSE:CORN

ETFsDavid Zeiler: With the Winklevoss Bitcoin ETF, more formally known as the Winklevoss Bitcoin Trust, on track for approval before the end of the year, and an exchange already selected (the Nasdaq), we’re waiting on just one more big piece of news: the ticker symbol.


Title: bitcoin ETF - Description: bitcoin ETF

With a product as controversial as a Bitcoin ETF, choosing the right ticker symbol can help foster wider acceptance of the digital currency as well as make the ETF easy for investors to remember.

The Winklevoss twins, Cameron and Tyler, filed with the U.S. Securities and Exchange Commission (SEC) for approval of their Bitcoin exchange-traded fund last July.

The twins, best known for successfully suing Facebook Inc. (Nasdaq: FB) founder Mark Zuckerberg for $140 million for stealing their idea for a social network, say the Winklevoss Bitcoin ETF would function much like the popular SPDR Gold Trust ETF (NYSE Arca: GLD).

To duplicate that structure, the Winklevoss Bitcoin ETF will buy one bitcoin for every five shares of the fund. With the current Bitcoin price at about $575, one share of the Winklevoss Bitcoin Trust would today trade for $115.

But what should the ticker be?

The famous twins might be tempted to pick a vanity ticker like WINK, VOSS, or even TWIN. However, TWIN is taken and WINK exists on the London stock exchange (for Winkworth). And does anyone really want to see VOSS?

Another avenue of possibility open to the Winklevoss Bitcoin ETF is tapping into the digital currency theme with something like BIT, COIN, CRYP, or MATH. However, all of those tickers are already being used.

If the Winklevii want to play it straight, they could go for something like BTCF, combining the widely used abbreviation of Bitcoin with an “F” for fund.

But being just a bit more clever might produce better results. This is what the science says…

Why the Winklevoss Bitcoin ETF Ticker Matters

The Winklevoss Bitcoin ETF might benefit from some research a couple of Princeton University professors did a few years ago on the impact of a ticker symbol on stock prices.

They discovered that memorable, pronounceable symbols – like Yum! Brands Inc. (NYSE: YUM) and Southwest Airlines Co. (NYSE: LUV) – actually perform better in the market.

“[Our] research shows that people take mental shortcuts, even when it comes to their investments, when it would seem they would want to be most rational,” Professor Daniel Oppenheimer, who co-authored the Princeton study, told Psych Central.

And while the study showed the greatest impact of a clever ticker in the first 10 days of an IPO, the effect lingers over the long term as well.

Another study by Pomona College finance professor Gary Smith found that memorable tickers earned a 23.5% return compounded annually over a 20-year period. That more than doubled the 12% return of a hypothetical index of all NYSE and Nasdaq stocks over the same period.

While the studies were done on stocks, there’s no reason to think the research is not equally valid for ETFs.

After all, the whole idea behind the Winklevoss Bitcoin ETF is to create an easy way to invest in Bitcoin. The ticker needs to mesh with that philosophy as well.

And to be sure, many ETFs have clever names, such as the Pimco ETF Trust (NYSE Arca: BOND), the Market Vectors Agribusiness ETF (NYSE Arca: MOO), the Guggenheim Shipping ETF (NYSE Arca: SEA), the ProShares Ultra Australian Dollar ETF (NYSE Arca: GDAY), and the Teucrium Corn Fund (NYSE Arca: CORN).

With most of the obvious choices unavailable, the Winklevoss twins will need to think a little harder to come up with something that makes sense and will appeal to investors.

One suggestion we like is MOON, which ties into the optimistic catchphrase “to the moon” (based on a meme of an astronaut standing on the moon with a flag bearing the Bitcoin symbol), typically uttered by digital currency enthusiasts when prices are rising.

Money MorningWritten By David Zeiler From Money Morning

We’re in the midst of the greatest investing boom in almost 60  years.  And rest assured – this boom is not about to end anytime soon.  You see, the flattening of the world continues to spawn new markets  worth trillions of dollars new customers that measure in the billions;  an insatiable global demand for basic resources that’s growing   exponentially; and a technological revolution even in the most distant  markets on the planet.  And Money Morning is here to help investors profit handsomely on this seismic shift in the global economy. In fact,  we believe this is where the only real fortunes will be made in the  months and years to come.


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