SINGAPORE — Early cryptocurrency investors Tyler and Cameron Winklevoss say savvy investors have been part of bitcoin’s bull run this year, separating this rally from the previous boom and bust of bitcoin.
“The type of investors in this bull run are very different,” Tyler Winklevoss, who co-founded cryptocurrency exchange Gemini with his brother, told CNBC’s “Squawk Box Asia” during Singapore’s FinTech Festival. “They’re super sophisticated institutional investors like legendary Paul Tudor Jones, [Stanley] Druckenmiller.”
Billionaire hedge fund manager Jones previously said bitcoin is still in the “first inning” and has a long way to go.
Bitcoin hit a new high last week, topping its 2017 record. Prices crashed in 2018 after a massive rally the year before. Experts say that frenzy was driven by retail speculation.
That’s why a lot of people have had fled to bitcoin … because it’s unclear how the dollar gets off this track of debt and printing, and what it’s actually going to be worth in the future, if anything at all
Tyler Winklevoss said the rally isn’t retail driven this time. “This is the most sophisticated investors, the smartest people in the room, buying the bitcoin quietly,” he added. “It’s not a FOMO thing, so it’s very different than 2017. This cast of characters, these companies, these investors were not in bitcoin back then.”
He added that these buyers believe that bitcoin could dethrone gold as a store of value to hedge against inflation.
“Publicly traded companies like Square and MicroStrategy putting their treasury cash into bitcoin because they’re worried about the oncoming inflation and the scourge of inflation with all the money printing and the stimulus from the Covid pandemic lockdown,” said Tyler.
Still, other titans in finance are not convinced. Billionaire investor Ray Dalio told Yahoo Finance last month that bitcoin is “not an effective store hold of wealth” because it is too volatile.
JPMorgan Chase CEO Jamie Dimon said the bank believes in cryptocurrency that is “properly regulated and properly backed.”
“Bitcoin is kind of different and that’s not my cup of tea,” he told The New York Times.
Future of the U.S. dollar
Gemini’s Tyler said there’s an “existential question” for the U.S. dollar because the increased money supply and debt will eventually make it “implausible” for the government to pay its debt.
“That’s why a lot of people have fled to bitcoin … because it’s unclear how the dollar gets off this track of debt and printing, and what it’s actually going to be worth in the future, if anything at all,” he said.
The brothers also repeated their prediction that bitcoin will hit $500,000 in the next decade.
“It’s an emergent store of value and it’s better than gold,” said Cameron Winklevoss. “We think it could appreciate something like 25 to 40 times of today’s price.”
Tyler said $500,000 is a “really conservative” target. “That’s only if it’s a store of value and gold 2.0 and disrupts gold. If it also becomes a payments network, the sky’s the limit.”
Bitcoin was trading at $18,212.69 on Thursday afternoon in Asia, up 154.52% since the beginning of the year, according to CoinDesk.
— CNBC’s Yun Li and Ryan Browne contributed to this report.