Winklevoss Twins Make a Case for $500,000 per Bitcoin as Fed Sends Markets Higher & Dumps Dollar


Although there was nothing “historic” about the Federal Reserve Chairman Jerome Powell’s speech yesterday, as of yet, the much-hyped Jackson Hole speech failed to cool down the markets.

The stock market continued to roar higher, making new all-time highs. Every asset reacted to Fed’s announcement that it would allow inflation to run above its longstanding 2% target but only for the markets to retrace.

However, except for Nasdaq, both the S&P 500 and Dow Jones Industrial Average closed higher than the previous day.

The US yield curve also steepened sharply, promising improved interest margins for banks. This steepening also reflects investors’ disappointment over the lack of detail about the Fed’s bond-buying program.

“Be careful what you wish for,” said David Kelly, chief global market strategist of JPMorgan Asset Management. “There is a risk that overall inflation will overshoot [the central bank’s] target, and they won’t have the political will to pull in the reins before it becomes a problem.”

Maybe Next Time

Bitcoin and gold price charts meanwhile are identical.

The largest digital currency had declined to under $11,300 when Jackson Hole speech took it to over $11,600 only for bitcoin to crash harder to $11,150. Similarly, the precious metal spiked 2.3% but dropped almost 3.3%.

Today, both the assets have recovered with BTC trading near $11,500 and gold above $1,950.

When it comes to the US dollar, it managed to jump to 93.3 level but today made its way back to 92.2. Ever since the introduction of the Fed in 1913, the USD has lost over 90% of its purchasing power.

Analysts and economists were anticipating a groundbreaking campaign on inflation, but Powell delivered less than expected dovishness. According to analyst Mati Greenspan, maybe not this time, but “if the markets are demanding stronger action, the Fed will be there to serve it… perhaps next time.”

Making a case for $500,000 Bitcoin

Although not as much as expected, Fed’s speech was the symbol of central bank’s support to Wall Street, that it has been providing since the pandemic began.

However, “even before COVID-19, and despite the longest bull run in U.S. economic history, the government was spending money like a drunken sailor, cutting taxes like Crazy Eddie, and printing money like a banana republic,” wrote the Winklevoss twins in their latest blog where they make a case for $500,000 Bitcoin.

According to them, there are fundamental problems with gold, oil, and the U.S. dollar as stores of value going forward.

Meanwhile, with inflation coming, money stored in a bank will get run over, those invested in the stocks market will keep pace and money stored in gold and bitcoin will outrun where that in “bitcoin will run the fastest, overtaking gold,” which has a market cap of $9 trillion.

And if the digital currency continues on its path, going from whitepaper to over $200 billion in market cap in under a decade, 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.

Bitcoin (BTC) Live Price

1 BTC/USD =$32,687.3287 change ~ -0.47%

Coin Market Cap

$607.73 Billion

24 Hour Volume

$10.28 Billion

24 Hour VWAP

$32.25 K

24 Hour Change

$-154.76

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