‘Undervalued’ Bitcoin Should Hit $500,000, Say Winklevoss Twins

Bitcoin prices can reach over $500,000 apiece amidst government-led inflation of fiat currencies and the business interests in mining gold from asteroids, said crypto exchange Gemini founders Tyler and Cameron Winklevoss in a blog post yesterday.

The twins acknowledged that gold has historically served as a reliable store of value, with investors seeking a safety net against inflation causing the asset to trade at a higher premium—pushing prices beyond the demand for its actual consumption. And so far, this has borne well.

However, there’s trouble ahead for the yellow metal. The Winklevii said that, as gold’s supply in the observable universe remains unknown, it’s a scarce asset only on planet Earth.

“The ‘Space Gold Rush’ has begun. The U.S. government has already enacted legislation that allows asteroid mining companies to own whatever they mine from asteroids, or otherwise obtain in space,” the twins noted.

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They added that Elon Musk, the founder of space exploration firm SpaceX, has already chalked out plans to mine gold on asteroids which would create a “long-term inevitability [that] will crater the price of gold.” The lack of portability of gold—one can’t carry large amounts of it around—is another issue, the twins noted.

These factors, in the Winklevii’s view, help lay the groundwork for skyrocketing Bitcoin valuations in the face of a potentially hyperinflated US dollar and an ever-flowing amount of gold.

“As it turns out, Bitcoin is better at being gold than gold—and not just incrementally, but by an order of magnitude or 10X better,” the Winklewii said.

They even touted Bitcoin’s large user base, its accessibility and portability, and its first-mover advantage as to why the asset is “the first one with gold-like store of value properties.”

“We believe that Bitcoin will continue to cannibalize gold and that this story will play out dramatically over the next decade. The rate of technological adoption is growing exponentially. Software is eating the world and gold is on the menu,” the twins said.

As for the massive six-figure valuation, the twins argued that the bull case scenario for Bitcoin is that it is “undervalued by a multiple of 45” when the asset is modeled on gold’s rise to its current $9 trillion valuation. 

“Said differently, the price of Bitcoin could appreciate 45x from where it is today, which means we could see a price of $500,000 US dollars per bitcoin,” they said.

Meanwhile, Bitcoin’s long-shot valuation will only be exuberated if the asset is used to displace part of the $11.7 trillion dollars of foreign exchange reserves held by governments, concluded the twins. They said, “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.”

Since the Winklevii own more than one percent of all Bitcoin on the planet, if this were to happen, they would have plenty to gain.