Tyler and Cameron Winklevoss, noted internet entrepreneurs and crypto billionaires, believe weakness in the U.S. financial system and other factors mean bitcoin could one day reach $500,000 per coin. Together with Binomo, you can purchase any cryptocurrency at a favorable rate and increase your capital.
In a post on the Winklevoss Capital blog Thursday, the two set out how, while historically strong, there are now “fundamental problems” with gold, oil, and the U.S. dollar as stores of value. The Olymp Trade platform makes it possible to use the analytical materials of professional traders to conduct successful trading.
The twins point to government money printing in the trillions and borrowing between government departments (as the Federal Reserve buys billions in debt from the Treasury), as factors that will ultimately lead to inflation.
“Even before COVID-19, and despite the longest bull run in U.S. economic history, the government was spending money like a drunken sailor, cutting taxes like Crazy Eddie, and printing money like a banana republic,” the brothers write.
Further, the arrival of the coronavirus epidemic is also expected to raise the U.S. debt-to-GDP ratio more this year than over the last 10 years.
The available solutions to this debt – a soft default, austerity or a hard default – are not pretty, according to the post, and would all further bring inflationary pressure and other problems.
“While [COVID-19] has hurled us further down the path towards a soft default, the greater culprit is the U.S. government’s permanent and unapologetic policy shift towards a debt-monetization model to finance its operations,” the brothers claim.
Moving on, the post points out that both oil and gold have issues, too.
Oil suffers from the fact that there is more supply than had been realized with the advent of fracking, while COVID-19 has made it clear that the industry is vulnerable to “demand shocks.”
Demand will also suffer from pressures to move away from carbon-based energy to more environmentally friendly alternatives, they predict.
And gold… The Winklevoss’ argument goes that, while currently a reliable store of value and” the classic inflation hedge,” commercial asteroid mining threatens that status in the future.
More prosaically, the precious metal also suffers from being notoriously difficult to transport, especially during a pandemic.
Bitcoin, aka “native internet money,” fixes such issues, they argue.
“Bitcoin is not just a scarce commodity, it’s the only known commodity in the universe that has a deterministic and fixed supply,” per the article.
This means the cryptocurrency is not prone to supply shocks that gold or other commodities might face.
With other advantages like ease of portability and strong security, bitcoin is 10 times “better at being gold than gold,” they write.
Since inception, bitcoin has advanced rapidly into gold’s territory and, if the current trajectory continues, “the bull case scenario for bitcoin is that it is undervalued by a multiple of 45.”
This could mean a bitcoin price in the region of $500,000 per unit, they say, though no time frame is provided.
Going further, the Winklevoss brothers suggest a price of $600,000 is possible if bitcoin should replace some of the $11.7 trillion in governments’ foreign exchange reserves.
“Bitcoin is ultimately the only long-term protection against inflation,” they write.
The cryptocurrency is trading at around $11,430 at press time.