Will Bitcoin Price Soar To $500,000? Winklevoss gives final bullish case

Tyler Winklevoss, one of the first reported Bitcoin (BTC) billionaires and co-founder of Gemini, believes an eventual bullish run for Bitcoin means reaching the $500,000 target.

The theory behind the long-term bitcoin price of $500,000 is simple. According to Winklevoss, Bitcoin could overtake gold as the leading safe-haven asset in global markets.

With gold's market capitalization estimated at $9 trillion and Bitcoin's value at roughly $200 billion, this could represent a 45x upside.

Does Bitcoin Have the Potential to Surpass Gold?

Forbes financial analyst: Bitcoin price rise last Thursday may be due to Bitfinex "short squeeze": Forbes financial analyst Charles Hayter believes that last Thursday's rise in Bitcoin was due to the "short squeeze" of the Bitfinex exchange. In layman's terms, a short squeeze refers to a relatively high increase in the stock or spot price that has been shorted in the stock market, causing short investors to forcefully liquidate these shorted assets, which further leads to an increase in asset prices. [2018/4/18]

For decades, investors have relied on three stores of value: gold, oil and the U.S. dollar. But all three have significant weaknesses.

Supported by Bitcoin mining giant Bitfury Canadian mine Hut listed on the Toronto Stock Exchange at the end of August: According to Bloomberg, Hut 8 Mining Corp, headquartered in Toronto, Canada, will be listed on the Toronto Stock Exchange at the end of this month. It is reported that Hut 8 Mining will be listed through a reverse merger—that is, to achieve its listing purpose by acquiring an already listed company. It is understood that in December last year, the company announced a partnership with bitcoin mining giant Bitfury to acquire, deploy, maintain and operate the largest bitcoin mining data center in North America. According to the listing documents submitted, Bitfury will provide hardware, software tools and logistical support to fully meet the business expansion needs of Hut 8 in the North American market. [2018/2/14]

Advantages of Bitcoin over Gold. Source: Tyler Winklevoss

Bitcoin rose nearly 6% to break through 25,000 yuan: According to Huobi.com, bitcoin denominated in RMB rose nearly 6%, breaking through the 25,000 yuan mark. [2017/9/11]

Gold and oil are difficult to transport and store. But more importantly, none of them have a fixed supply.

Therefore, if it is found that these two assets may have a huge supply, although the probability is small, this may have a negative impact on their value.

Winklevoss explained:

“Currently, gold is a reliable store of value and a classic inflation hedge. The supply of gold is virtually unknown. While gold remains scarce or “precious” on Earth, this is not the case for our galaxy in this way."

The biggest problem with the dollar is inflation and the stability of its value. Fears of inflation and economic uncertainty could keep the greenback in limbo for a long time, as seen by the greenback's performance over the past four months.

Winklevoss pointed out that if there is inflation in the long run, gold or bitcoin may exceed the capital stored in the bank. He added:

"Inflation is coming. Money deposited in banks will be run on. Money invested in assets such as real estate or the stock market will keep pace. Money stored in gold or Bitcoin will beat inflation. Money stored in Bitcoin will The fastest growing, surpassing gold."

With Bitcoin, inflation is impossible due to its fixed supply of 21 million. Unlike gold and oil, it will remain scarce forever and be easily transported and stored. Given these characteristics of bitcoin, Winklevoss said he sees bitcoin as "the only long-term protection against inflation."

Bitcoin is 45 times undervalued

Demand for digital products and currencies has soared in recent months, especially in the wake of the pandemic in March. Concerns about inflation are likely to intensify further after Fed Chairman Jerome Powell confirmed that the central bank wants to exceed its average inflation target. In fact, Tyler Winklevoss believes that the Federal Reserve is the "biggest driver" of Bitcoin's value.

For example, U.S.-based public company MicroStrategy purchased another $250 million worth of Bitcoin to use it as the company’s main financial asset.

Rapid Bitcoin adoption, increasing institutionalization, improving infrastructure, and increased liquidity may underpin an eventual bullish rise in Bitcoin’s value.

Winklevoss says:

“If we’re right about valuing Bitcoin with the gold framework, and Bitcoin continues down this path, then the bull case for Bitcoin is that it’s 45 times undervalued. In other words, Bitcoin’s price could Will rise 45 times from now, which means we may see a price of $500,000 per bitcoin.”

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