💰 The case for $500,000 bitcoin

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GM everyone. This is 2036, the crypto newsletter that pays you 💸

If you’ve ever watched The Social Network, you know who the Winklevoss twins are.

In real life, they actually look like this:

You might know them from Facebook. But they’re famous in crypto too - and for a good reason. Here’s why.

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In case you’re of the less cinematically inclined, Cameron and Tyler Winklevoss supposedly had the initial idea for Facebook.

They told Mark Zuckerberg about it during their time together at Harvard. Mark then allegedly stole their idea and built his now trillion-dollar empire.

After a lawsuit that turned into one of the greatest scenes in movie history, Zuck and the twins settled for $65 million.

In 2013, the fantastic duo announced they owned roughly $11 million worth of bitcoin.

Rumors circulate that they bought bitcoin for as little as $8 apiece.

I get it now - that's what your blazer looks like when your $10 million in bitcoin goes to $6 BILLION.

A few years ago, they wrote a blog post titled "The Case for $500K Bitcoin".

It’s a must-read for crypto enthusiasts. Here’s a quick run-down of what it says:

The world is drowning in debt.

Already before COVID, major Western governments, including the US, were spending money like drunken sailors, cutting taxes like Crazy Eddie, and printing money like banana republics.

But there are only 3 ways out of debt:

• default on the debt

• make more than you spend and repay the loan (by being more productive)

• inflate the debt away by printing money

A default of the debt by a major player like the US would be catastrophic and frankly - unlikely.

Increased incomes are driven by a) demographics i.e more births/immigration than deaths and b) productivity.

But most Western countries have too many old people. There are more adult diapers sold in Japan than there are baby diapers sold (link).

Productivity has been stagnant for over a decade. The US has run a surplus only 4 of the last 52 years.

That leaves us with option 3 - money printing and inflation.

During inflationary times, money (like dollars, euros, yen, etc.) loses purchasing power. Those with fixed incomes (like retirees) lose, and those with debt and assets win.

So we need to get out of cash and into assets. But there’s a problem:

• Oil is not a reliable store of wealth (there’s a lot more of it than we thought, demand for it is decreasing and storage is complicated)

• and neither is gold

Gold is hard to transport, store and divide.

And there’s a lot more gold than we know how to mine today. Not only in ocean floors, but in asteroids.

Even a half-assed effort by Elon Musk to mine Mars for metals will destroy the price of gold.

So that leaves us with another, newer, better choice - bitcoin.

It’s the only commodity in the world with a fixed supply (21 million). And in every way, bitcoin is better than gold.

When the twins wrote their article, the market cap of bitcoin was $200 billion, and gold was $9 trillion.

So if bitcoin were to overtake gold as a new, digital gold - with a similar market cap of $9 trillion - it would be worth over $500,000 per bitcoin.

Is this still realistic today?

It’s possible.

We’re in the middle of a central banking crisis, and the Fed has indicated it’s ready to print more money to save the banks.

Just today, they announced they’re looking into ways to ensure $18 trillion of deposits… that’s a lotta moolah.

That’s a huge shift from their position even just last month.

In one week, the Fed’s reversed half the tightening it did over the last year.

And when central bank balance sheets increase, risk assets like crypto tend to go up 📈 . This is easier to see visually:

You can already see it happening. Bitcoin’s reached a 9-month high of $28,000.

Does that mean bitcoin is going to $500,000 tomorrow?

We don’t know. But King Balaji, who we feature regularly here, is betting $2 million that bitcoin will reach $1 million within 90 days.

We’ll explain exactly why this week. So stay tuned.

💎 We wrote a report on the top buys, sells and holdings of crypto wallets worth between $1.5 and $32 million. Refer 1 friend using this link and we’ll send over the report.

🧠 Update

Upon popular demand, we’re trying something new this week. Instead of several smaller tasks, we’re going to have one task with a large payout.

So keep your eyes on your inbox this week! 👀

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🖼️ Crypto meme of the day

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Word goes around that you get a lot of work done listening to the soundtrack of 'The Social Network' in the background... here it is.