Tyler and Cameron Winklevoss, better known as the Winklevoss twins, expect the market valuation of bitcoin to surpass trillions of dollars in the upcoming years.
Basis of the Prediction of the Winklevoss Twins
In an interview with CNBC, Cameron Winklevoss explained that the properties of bitcoin allow it to operate as a premier store of value that is in orders of magnitude better than gold in many aspects, including transportability, divisibility, and monetary supply.
“We’ve always felt that bitcoin, given its properties, is gold 2.0 — it disrupts gold. Gold is scarce, bitcoin is actually fixed. Bitcoin is way more portable and way more divisible,” said Winklevoss.
He added that if bitcoin can continue to disrupt the $6 trillion gold market in the long-term, it will be able to hit a trillion dollars in a relatively short period of time, given that the market valuation of bitcoin already remains close to $300 billion.
“Long term, directionally, it is a multi trillion-dollar asset — I don’t know how long it takes to get there,” emphasized Winklevoss.
Bitcoin is rapidly transforming the global finance industry as a decentralized store of value. If the bitcoin market is able to sustain its growth rate over the next few years, it will penetrate into the gold and offshore banking industries. The combined market cap of gold and offshore banking industry amount to nearly $40 trillion.
Winklevoss noted that other currencies and cryptocurrencies are not the competition of bitcoin. Rather, other safe haven assets and store of values such as gold are the real competition of the cryptocurrency. He explained:
“Bitcoin is not competing with those other currencies. It is competing with gold. Bitcoin is the oldest, it has the first mover advantage and there’s tremendous liquidity,”
$32 Trillion Stashed in Offshore Bank Accounts
A study conducted by Asset Protection Planners in April of 2015 estimated the amount of cash and assets stashed in offshore bank accounts at over $32 trillion.
At the time, tax lawyer and Liechtenstein wealth adviser Philip Marcovici, stated that the motive of both individual and institutional investors storing money in offshore banking accounts is not to avoid taxes, but to obtain privacy and financial confidentiality.
“For most people, it is not only the objective of not paying taxes. It’s the objective of obtaining the right to privacy and seeking financial confidentiality,” said Marcovici.
Structurally and conceptually, bitcoin is a significantly better system to store money for individuals and institutional investors than offshore bank accounts, primarily because governments can still crackdown on offshore bank accounts. In 2016, the US government fined Swiss banks $1.3 billion, involving more than 43,000 offshore bank accounts holding $48 billion.
As a decentralized and peer-to-peer store of value, governments cannot possibly crackdown on bitcoin holders and accounts. Hence, it provides investors with privacy and financial confidentiality, which offshore bank accounts were meant to provide.
If bitcoin can account for even 10 percent of the global offshore banking industry, bitcoin’s market cap can surpass $3.2 trillion. Based on the fixed supply of 21 million, a $3.2 trillion market cap values bitcoin at $152.380.