Subject: File No. SR-BatsBZX-2016-30
March 9, 2017
Per the Form S-1, the shares of the Winklevoss Bitcoin Trust will be valued using the Gemini Exchange Auction Price.
The S-1 is misleading investors through its description of the Auction as a robust mechanism for price discovery. Gemini's fee structure is such that self-trading or collusive ('wash') trading between accounts can be a profitable strategy in the Auction. Because Gemini charges filled Auction orders according to its maker fee schedule, such a strategy can generate a 'risk-free' rebate of up to 0.30%. This has been publicly described online, including the fact that Gemini allows self-trading. As a result, Auction volumes are artificially inflated and the Auction Price is not always the result of bona fide supply and demand.