Winklevoss Bros Make Case For USD 500k Bitcoin

Cameron and Tyler Winklevoss, co-founders of the US-based Gemini exchange and family office Winklevoss Capital, forecast the price of Bitcoin (BTC) could reach USD 500,000, as the the US debt-to-GDP ratio is set to expand more in 2020 than it did over the entire prior decade, triggering inflation, and causing investors to shift their assets into alternative investments such as cryptocurrencies.

“Inflation is coming. Money stored in a bank will get run over. Money invested in assets like real estate or the stock market will keep pace. Money stored in gold or bitcoin will outrun the scourge. And money stored in bitcoin will run the fastest, overtaking gold,” the brothers said in their latest analysis.

It added that “Bitcoin has already made significant ground on gold — going from whitepaper to over [USD] 200 billion in market capitalization in under a decade. Today, the market capitalization of above ground gold is conservatively [USD] 9 trillion.”

By applying a gold framework to value bitcoin, the twins say that, should BTC continue on this path, the bull case scenario for the cryptocurrency could be that it is currently undervalued by a factor of 45.

According to the analysis:

“Said differently, the price of bitcoin could appreciate 45x from where it is today, which means we could see a price of [USD] 500,000 … per bitcoin.”

Furthermore, the forecast says it does not factor in the possibility of BTC displacing a share of the USD 11.7 trillion dollars of fiat foreign exchange reserves that are currently held by governments worldwide.

“Foreshadowing this, at least one publicly-traded US corporation has begun holding bitcoin as a treasury reserve asset. If central banks start to diversify their foreign fiat holdings even partially into bitcoin, say 10%, then 45x gets revised upward towards 55x or [USD] 600,000 per bitcoin, and so forth,” the brothers said.

Winklevoss Capital has bought shares in a number of companies from the blockchain industry, including digital wealth management solution BlockFi, and micropayment infrastructure provider ChangeCoin. The home office also invests in cryptocurrencies, including BTC and Zcash (ZEC), according to data from the firm.

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