The founders of Winklevoss Capital and the Gemini bitcoin exchange, Tyler and Cameron Winklevoss, believe that the price of bitcoin can surpass the $500 mark. The magazine writes about it ForkLog.
They believe that bitcoin is superior to gold, oil and the US dollar as a means of preserving value and is the only long-term protection against inflation.
In a joint article, the entrepreneurs spoke in detail about how the Fed (Federal Reserve System) reacted to the economic crisis caused by the Covid-19 pandemic. They criticized quantitative easing (QE) and debt financing, and also predicted "Great Monetary Inflation" in the near future.
"Over the past six months, the Fed has printed two-thirds of the amount it printed in 11 years," they summarized.
A day before that, Fed Chairman Jerome Powell announced the central bank's readiness to increase inflation above the 2% target. He did not see any threat in this development of events. An alternative, according to him, would be a series of large-scale defaults, including sovereign defaults.
"The ratio of US public debt to GDP will grow more this year than in the entire previous decade," the Winklevoss noted.
The same trend is observed in other countries, Gemini founders added.
When it comes to paying off inflated debts, governments will have three options, they continued.
- Refusal to pay part of the debt (hard default);
- Belt-tightening policy;
- Rising inflation to reduce the value of the debt (soft default).
- According to them, Powell confirmed the course for the third option.
The brothers also remembered the disadvantages of gold: unknown supply (taking into account gold on asteroids), difficult portability and the possibility of confiscation. The US authorities, they noted, are already adopting the laws necessary for the extraction of fossils in space.
"If bitcoin follows the path of gold and/or partially replaces the fiat reserves of central banks, its price can soar to $500-600 thousand," Winklevoss said.
