• Tyler and Cameron Winklevoss have recognized the potential of Bitcoin as an alternative in the event of a potential collapse of Gold and the US-Dollar.
• The Winklevoss brothers predict a collapse of the gold price due to space mining and thus a 45-fold increase in the price of Bitcoin.

An article published under the title “The Case for $500K Bitcoin” predicts the rise of Bitcoin as the ultimate store of value. Written by the founders of the crypto exchange Gemini, Tyler and Cameron Winklevoss, the article also predicts the decline of the dollar as an international reserve currency and of gold as a scarce asset.

The Winklevoss brothers acknowledge that gold has historically served as a reliable store of value because of the shortage of its supply. This is why it has been able to receive “premium prices” that exceeded the consumer demand. Furthermore, according to the Winklevoss twins, the strength of the world economy has given gold the status of a global accounting unit and reserve. This is changing.

Space gold mining will boost Bitcoin’s price

The Winklevoss first establish the fundamental problems with the dollar. According to the article, the U.S. Federal Reserve has deflected from its purpose as protector of the value of the USD since the credit crisis in 2008. At that time, a series of measures were necessary, such as the injection of stimulus and the increase in debt. The Winklevoss brothers argue that the government never stopped implementing these measures that were originally intended to mitigate the crisis:

And so what started as an acute prescription, has morphed into chronic dependence and denial (aka addiction). The resulting maladaptive behavior is, not surprisingly, very difficult to correct.

Congressional Budget Office of the U.S., according to the article, project a deficit of $3.7 trillion this year, after the most recent measures to combat Covid-19. For 2021, the institution projects a deficit of $2.1 trillion by September, bringing the grand total to $29 trillion by September 2021:

They also demonstrate just how far the Fed wandered outside of its traditional mandate of promoting maximum employment and stable prices. While a central bank is expected to buy and sell short-term debt (Treasury bills or T-bills in the U.S.) in order to manage short-term interest rates, when it extends its open market activities to long-term Treasurys and other assets, it is operating firmly in the unconventional land of quantitative easing.

As shown in the graph below, the U.S. Federal Reserve has printed two-thirds as much money in the last 6 months as it did over the prior 11 years. In that sense, the Gemini founders claim that the dollar has entered a spectrum of unchecked inflation.

Following this argument, the founders of the Gemini believe that investors will not be able to take refuge in gold to protect themselves against inflation. Gold will lose its value, they say, because of the “Space Gold Rush”. Initiated by Elon Musk and other private interests, the Winklevoss’ believe that the gold market could be negatively affected once the necessary technology is developed to extract the mineral from near earth asteroids.

The United States government has already implemented the necessary legislation to provide incentives to companies and stakeholders. Therefore, Bitcoin will remain the only viable option. In addition, the Winklevoss brothers cite all the benefits Bitcoin has over gold and claim that the cryptocurrency is “better gold than gold”:

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.

In conclusion, the founders of Gemini predict that Bitcoin will experience an increase of 45 times of its current value. Accordingly, they expect the price of Bitcoin to reach $500,000 in the long run.

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