Bitcoin Is Still ‘Undervalued’ Until It Manages To Reach Market Cap Of $7 Trillion, According To Winklevoss Twins
Have you been watching the performance of Bitcoin these past few months with some thinly veiled feelings of remorse that you weren’t one of those investors being brought along for the bullish ride? Well you’ve got another thing coming if you think you’ve missed out, this is what the Winklevoss twins think, at least.
According to the co-founders behind Gemini, Bitcoin still has plenty of room and time to surge ever upwards, and are under no allusion that it is currently ridiculously undervalued. Just how undervalued, exactly? The duo believe that it will continue to be so long as it has anything less than a $7 trillion market capitalization to its name. To put this into some interesting perspective – the current market cap for Bitcoin this quarter is $229 billion.
Being the owners of 1 percent of all circulated Bitcoin has put Cameron and Tyler Winklevoss into a very enviable position, and the two base their theory on Bitcoin having all the potential to surpass the current market cap for Gold, which is at 7 trillion dollars.
“Our thesis is that bitcoin is gold 2.0 and so until it has a market cap of $7 trillion, which is the size of gold, it’s a very under-valued asset, so I think people are waking up to that.” This is according to the two who took part in a discussion on CNBC.
Digital Gold? Can Bitcoin Outmatch The Precious Metal?
For an increasing number of people, Bitcoin is getting considered as the next generation class of precious metal – ‘Digital Gold’ – and a viable kind of store of value thanks both to its in-built scarcity and lack of correlation with any other market asset.
This makes it a highly effective hedge investment to have during times of economic uncertainty. And while there have been some fluctuations in its value over this quarter, the digital gold narrative is one that has gone from strength to strength.
The Cypto Fund Grayscale, which manages more than 2.8 billion dollars worth of assets, took to social media to kick off its #DropGold campaign. It is using this in order to encourage investors to switch out their Gold in exchange for Bitcoin. This has since been something that the Winklevoss Twins have come to espouse too.
According to Grayscale (@GrayscaleInvest), Gold is something worth looking into kicking out of your portfolio from its Twitter account on Mat 1st, 2019:
“Why is #Gold still in your Portfolio? #DropGold (Dropgold.com)”
This seems to be a hashtag trend and narrative that has been steadily gaining momentum online and in the investment world. An increasing number of traders operating on Wall Street, for example, not urge investors to consider a 5 percent portfolio allocation over to Bitcoin
“Usually in a portfolio, gold is about 5-10% of the portfolio so there’s nothing wrong with saying bitcoin couldn’t be 5-10% of a portfolio right now.” – This is according to a statement provided by Anthony Grisanti during an interview on CNBC.
Winklevoss Twins Go Double Or Nothing On Bitcoin
We all commonly know the Winklevoss Twins from the hectic legal suit between themselves and Mark Zuckerberg back in 2013. Since managing to take millions of dollars from that settlement, the two decided to pour it into Bitcoin. Effectively, they managed to invest in the crypto startup company – BitInstant and have since managed to accrue a total holding of around 1 percent of all BTC in circulation.
Since then, they took to creating and launching their own Crypto exchange known as Gemini, and is in the process of getting involved in official Over the Counter trading (OTC).
Even with the kind of exceptional growth that Bitcoin has undergone in the last few years, the two believe that it is still very much in the formative years of its development, with much more to come in the foreseeable future.
“We still think it’s the bottom of the first inning,” to borrow a Baseball analogy.
Some Advice To Zuckerberg And Facebook’s Libra Crypto Project
While there is certainly cause for some kind of modicum of hard feelings between the twins and Mark Zuckerberg over intellectual property claims regarding Facebook. This hasn’t stopped the two from sharing their thoughts on the recently announced project and cryptocurrency coming from the platform known as Libra.
So what kind of advice did they provide to their former nemesis exactly?
“Talk with [regulators]. You know, we definitely went through the front door, and we tried to educate the regulators and shape the regulation in a thoughtful manner because if you get the regulation wrong it can stifle innovation.”
While the two have been on the figurative shop floor of cryptocurrencies, they have always been firm advocates for an approach by startups that allows them to obtain regulatory compliance and, therefore, approval. The twins were among some of the first to speak to regulators situated in New York, and were responsible for a rather controversial call for implementing ‘rules’ within the Bitcoin ecosystem to improve its chances of being adopted by mainstream finance.
Author: James Fox