Winklevoss Twins bet over Bitcoin against other assets as they believe that Bitcoin is the store of value for the future. Gemini CEO Tyler Winklevoss claims that Bitcoin could reach $500,000.
In the latest blog post entitled “The Case for $500k Bitcoin,” Tyler Winklevoss explains that the US dollar, gold, and oil are now outdated as a store of value, and Bitcoin is the best one due to its fixed supply.
Bitcoin is the Best Store of Value
Gold can be used as a store of value, but it is not better than Bitcoin. Ultimately Bitcoin can take the position of gold as a reliable inflation edge in the future due to its scarcity feature and better portability. The current market cap of gold is almost $9 trillion, and if Bitcoin replaces gold, its price will reach over $500,000. According to the blog post:
“The market capitalization of above ground gold is conservatively $9 trillion. If we are right about using a gold framework to value bitcoin, and bitcoin continues on this path, then the bull case scenario for bitcoin is that it is undervalued by a multiple of 45. Said differently, the price of bitcoin could appreciate 45x from where it is today, which means we could see a price of $500,000 U.S. dollars per bitcoin.”
Gold has Deficiencies
The use of gold as a store of value has two negative consequences. First, the supply of the precious metal is still unknown. Second, it is very difficult to move gold in emergency situations such as war or pandemic.
Gemini CEO further claims that if central banks start diversifying foreign fiat holdings and put 10% for Bitcoin then its value can reach up to $600,000.
“All of this does not factor in the possibility of bitcoin displacing some portion of the $11.7 trillion dollars of fiat foreign exchange reserves held by governments…If central banks start to diversify their foreign fiat holdings even partially into bitcoin, say 10%, then 45x gets revised upward towards 55x or $600,000 USD per bitcoin, and so forth,” Tyler wrote.