Bitcoin (BTC) is Undervalued by a Multiple of 45x - Winklevoss Capital 9

Bitcoin (BTC) is Undervalued by a Multiple of 45x – Winklevoss Capital

In summary:

  • Tyler Winklevoss has published a report pleading the case for a $500,000 Bitcoin value
  • Published under Winklevoss Capital, the report states that BTC is undervalued by a factor of 45x
  • Furthermore, the team at Winklevoss Capital believes that Bitcoin will cannibalize Gold and become the only long-term protection against inflation

The Co-Founder and CEO of the Gemini Exchange, Tyler Winklevoss, has published a report pleading the case for a $500,000 future value of Bitcoin (BTC).

Published under Winklevoss Capital, the report begins by explaining that Gold, Oil and the US Dollar have been reliable stores of value. However, times are changing and they are no longer as reliable as they used to be. Therefore, Bitcoin is ultimately the only long-term protection against inflation.

The report explains:

…we believe there are fundamental problems with gold, oil, and the U.S. dollar as stores of value going forward. Below, we will make the case that bitcoin is ultimately the only long-term protection against inflation.

Fundamental Flaws of Gold, Oil and the USD as Stores of Value

The report goes on to explain the individual flaws of gold, oil and the USD as stores of value.

With respect to Oil, it explains that the idea of scarcity no longer applies and that there is more oil underground than initially thought. Additionally, demand might be affected by renewable energy and measures to curb global warming.

Gold on the other hand has a fundamental flaw in that its total supply is unknown. While Gold remains scarce on Earth, the galaxy is filled with it. With commercial asteroid mining on the minds of determined individuals such as Elon Musk, the supply of gold will surely be affected once this feat is achieved.

In the case of the USD, the money printer continues to go Brrr and it will only lead to inflation.

Bitcoin is Undervalued by a Factor of 45x

In pleading the case for a $500,000 Bitcoin, the report explains that global inflation is on its way, and money stored in gold or Bitcoin will outrun the scourge.

Inflation is coming. Money stored in a bank will get run over. Money invested in assets like real estate or the stock market will keep pace. Money stored in gold or bitcoin will outrun the scourge.

And money stored in bitcoin will run the fastest, overtaking gold.

From the latter statement, and using Gold’s market cap of $9 Trillion as a way of valuing Bitcoin, the report concludes that BTC is undervalued by a factor of 45.

Today, 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.