This Is Why Bitcoin Will Be $500k (With Tyler Winklevoss)

all right what's going on everyone casey adams here welcome back to the rise of the young podcast today we have tyler winklevoss on the show the co-founder of gemini thanks so much for coming on tyler hey thanks for having me casey so absolutely well i want to bring up first i know i've been seeing a lot recently how you and your brother have been saying bitcoin is on the trajectory and you've been making the claim of it going to 500 000 per coin um to take it back when did you first get involved with bitcoin so we were um we were on vacation in ibiza um we were at a day beach party uh a club called blue marlin um some guy came up to us he recognized us we had mutual friends in common in in new york he's like have you have you thought about bitcoin and we're like what's bitcoin and we had just been um we have been athletes since 15 to 30. so we had just retired um we had just opened up our family office from the bus capital just got a lease space in new york so we're going to do angel investing but we were on vacation in ibiza like there's not a lot of startup ideas that happened there but i guess that's how these things work you know it's sort of like you can't force finding love or finding your passion you just have to be aware anyway fans encounter on a beach in ibiza um we stayed in touch with this guy um we got in contact when we got back to new york he really wanted us to look at this investment called bit instant which helped people buy bitcoin but to understand whether this company is worth while investing we had to understand what the heck bitcoin was so that was in the summer of 2012 and bitcoin was in the high single digits so we started buying bitcoin we initially were like this is either a really big deal it's just total [ __ ] yeah um and then we came around to we started asking questions a lot of people don't do they just write bitcoin off so we started asking um bitcoiners um you know the hard questions and the answers were great um we always got good answers back so we we came from you know we came in the side of like this is this is a huge idea this is this is gold 2.0 um built for the internet so we started buying at about eight dollars of bitcoin so that was back in 2012 fast forward eight years now and bitcoin um is trading anywhere at like 18 000 a coin and i know it's just coming to that all-time high number and i wanted to ask you how is 2020 different than what bitcoin was in 2017 with it being you know crossing the all-time high mark yeah so it's it's very different um so much has happened in three years um gemini is an exchange custodian that we built we started we launched in 2015. it helps you buy store uh buy sell and store cryptos like bitcoin um just from that vantage point our company has grown so much we're almost 330 employees wow um but there's been so many efforts in the space but um this full run is being led very differently there are some really legendary investors for those of you who don't know google guys like paul tudor jones stan druck and miller these are hedge fund legends they're taking positions in bitcoin they're talking about it they're going on cnbc um we have publicly traded companies that are putting some of their treasury reserves their cash on their balance sheet into bitcoin because they're worried about the oncoming inflation for cash so public companies like microstrategy jack dorsey square um have taken huge positions of bitcoin so it's really being led quietly in a way by the most sophisticated investors in the room and really sophisticated publicly traded companies so it's not the fomo crowd it's not the retail crowd they're still there but the hype um uh the overhype of 2017 doesn't feel like it's there and what these people are are seeing in believing um and i've spoken to many of them is that bitcoin is gold 2.0 right and so it is your protection from inflation and inflation's happening uh much because of all the stimulus spending all the money printing that the us government other governments around the world have resorted to to help get economies out of the the locked the pandemic but really the lockdown and the economic demand shock that's happened so nobody's buying stuff nobody's spending you can't go to a restaurant so company uh so so governments are trying central banks are trying to pump money into the system to keep it afloat you know to plug this hole but what happens is that the dollars uh the dollar supply keeps increasing the euros the pounds whatever so your dollar used to be a certain percentage of all the dollars in circulation and now that percentage is a lot lower and so prices are going up that's the result of inflation when you print more money at a faster rate than the economy grows which means all of your dollars can purchase less so when you put your values in a dollar it is actually degrading over time it's sort of i i think i said this on another podcast bryce's podcast you know if you have 10 apples and there's 100 apples in total you've got 10 of the apple supply all of a sudden you double that to 200 apples you have you have 5 of the apples so it's just less rare and so the dollar is becoming i sort of joke but it's sort of turning into toilet paper yeah um you depreciate right um but so what people realize is to protect from that depreciation they put their value into hard money assets with much uh tighter money supplies like gold but gold is actually scarce the supply is unknown and people find ways to mine more um you know over time whereas bitcoin supply is fixed at 21 million and that is a really important characteristic because we know how the supply of bitcoins fixed there's no technological breakthrough that can increase that so when you buy a bitcoin and you can buy a hundred dollars of bitcoin you can buy any fraction it's always the same percentage of the entire pie and in the backdrop of the pandemic the lockdown the money printing um there's a term in economics called helicopter money everyone in the u.s got a 1200 check that just literally came into thin air um the way to and people are like scratching that like people are starting to get it you know like how is it happening it's actually like the fed the federal reserve make waves a magic wand and it happens and people are sort of saying that feels a little bit like not real because it's it's not and and i think that's why bitcoin it's been a catalyst driver for for bitcoin lately totally and when you say you know bitcoin is going to be worth 500 000. what do you think needs to happen to go from 20 000 to eventually getting to 500 000 so i think it's just more time and education and more data points but how i get to 500 000 it's very simple math the market cap of of gold is 9 trillion so the the entire supply of gold is priced at 9 trillion if gold sorry if bitcoin is gold 2.0 and it disrupts uh gold then its market cap also has to be 9 trillion but today bitcoin's market cap is 330 billion so it's got to increase somewhere like 25 to 30 x from here so put on a 25 to 30 x multiple on the price of a bitcoin today which is let's say 18 000 20 000 um that easily gets you to 500 000 of bitcoin so if we're right that um bitcoin is better than gold and the way we get to that is we look at the characteristics of why people find gold valuable it's scarce it's portable it's divisible bitcoins uh better than scarce it's fixed you can send it like email you can divide a bitcoin into 100 million pieces so across the board all the reasons why humanity has found gold valuable for the last multi-millennia bitcoin beats it so it should be worth as much or more than gold and for that to happen a bitcoin has to be worth 500 000 uh dollars a bitcoin that's yeah i totally make sense when it does reach the point when it gets to 500 000 a coin like what does it look like from the consumer behavior are people spending it and how do you think it will be used when it gets to that point so that is a great question a lot of people wonder do you have to buy things spend bitcoin does it have to be used as a currency for it to get there my answer is no um nobody buys coffee or goes to mcdonald's and buys a big mac with gold gold or seat you know or value yeah it's a store of value you got it um but one day a long time ago before the invention of fiat currency uh gold was brought to the market and it was a commodity money but we recognize it's a better sort of value so if bitcoin just becomes a mature better store of value i think we see 500 000 a bitcoin if it's also used as a currency there's there's efforts like the lightning network and other sidechain projects if you can also use bitcoin as a currency the value actually goes up much higher if it can be both a sort of value and a way for a currency to work on the network there are other instances too where bitcoin itself the network could be like the substrate of other networks and just the security of it it would basically become like the digital global reserve currency of all crypto then it's even higher so when i say 500 000 of bitcoin that's actually the conservative case it could easily be a lot a couple times more or even or a magnitude more and by the time it gets there like you're never selling your bitcoin you if you need to like use fiat or you know i sort of say cash is trash you'll just be able to lo uh borrow and today you can borrow off your bitcoin get the cash spend it without selling the bitcoin so um i was listening to this podcast and they were joking about like this bitcoin meme of the matrix and like you know when when bitcoin gets to like a million like you won't have to sell it kind of thing morpheus and neo like music what happens when it gets to millions like you won't have to sell it um so anyway i think there's i think we've been hodler's that's the term for holding since um 2012. um and i was on cnbc squawk uh yesterday morning and um the the interviewer asked me see moody she's like what have you been doing to prepare like now that bitcoin is at 18 000 i was like i've just been huddling like it's just being patient um and i'm gonna huddle all the way to 500 000 and i'm gonna still huddle because if i need us dollar [ __ ] coin i can always find another way to find it but like uh bitcoin is a it's like a a multi-generational asset you know we are at the dawn of something as significant as the internet itself you the problem with the internet is that you couldn't buy a piece of it you could buy like a domain name you could sort of squat you could get like i don't know cool.com or podcast.com even though podcasts weren't a thing back then but if you knew that they were how do you say that i was literally looking up podcast.com yesterday and it was going for like a million dollars so funny you bring that up right but that's like owning a piece of the internet but it was kind of hard you had to invest on the the application layer the companies on top of it but wouldn't it have been nice to just buy a coin that represented the internet well fast forward to 2010 the invention of bitcoin you can literally buy a coin a bitcoin or a fraction of one that indexes or canvases the entire bitcoin ecosystem without having to pick what company's going to work whether it's going to be gemini or coinbase or you know it's it's sort of like owning a piece of the racetrack without having to uh bet on which horse is gonna win as long as the races are running um you you make some money and so ether is the same thing for indexing um a piece of the ethereum network which is a digital or decentralized global computer um a lot of people equate ether to digital oil so if you want to get into the crypto game my suggestion is own some bitcoin digital gold and own some ether digital oil and with those you have most your bases covered love that and with ether i know it's you know not as talked about in the media but when it comes to the predictions of where ether can go and how it's utilized and where it could be from a price perspective like what's your thoughts on that on where ether could go from a place of value so i um i think it's very high um in some ways it's it i haven't done like math on that lately so uh for disclosure and we've talked about this before that we are we have material stake in ether as well um like you you mentioned earlier the media loves bitcoin because it's easier for consumers or readers to understand that and they they harp on that and that makes sense but um what's less talked about and less known is that we are huge fans of ether or ethereans um if you will in in the slang so look i think um ether has tremendous capabilities because bitcoin's digital gold right it's sort of moving value from a to b and there doesn't seem to be a huge appetite in the community to to experiment or sort of screw it up right it's like we've got a good thing going let's not run too fast let's not um be too exotic whereas ethereum is like you're it's a decentralized operating system so the promise is that you can create these applications on top of it permissionless the same way you could build an application i don't know about anymore but back in the day you could build a company on top of facebook so companies like zynga which actually ipo'd and was worth i think at least a billion dollars was a company built on top of facebook so most companies today are built on top of a cloud computing service like amazon so you rent space from jeff bezos and amazon ethereum is a decentralized amazon where you can build your applications there and you run the computing power by owning ether instead of running your credit card through amazon cloud aws web services you just pay the network in ether uh it's it's not centralized it's not a company it's a centralized network and you can um you could you could run you could create decentralized twitter on it you could create decentralized facebook decentralize whatever no one can stop it no one really controls it it's owned by the users that's the beauty of a cryptocurrency is that the value accrues to the people who use a network not just um a few people in a company in silicon valley yeah um so you know ether's got to upgrade it's it's moving to e2 there's there's some scalable things that it's got to work through but like i'm an optimist and the smartest folks in the room are are working on it so if if ether is your global computer in the future what's that worth um it's got to be a ton and it's got to be worth um as much as digital gold i would think maybe more love that i know that um you tweeted earlier you said the trade of the century is still available the next few hedge funds who take 100 or greater in bitcoin will become the best investors of their generation what's your i would say thoughts on that on a deeper level when it comes to the type of hedge funds and why haven't they done that yet if it's something that could be so simple the way you make it sound but what is the drawback from these big hedge funds you think on putting a hundred million dollars into bitcoin at its current state i think there's no drawback i think the drawback is not doing it um why i think there is friction to do it is um crypto bitcoin it's newfangled it's exotic it's risky a lot of people write it off they don't um look closely enough at the legalities of it the fact that it's been legal since 2015 in the us is is is like an unknown fact so a lot of people sort of worry about it i think also like a lot hedge funds generally run out money from other people so they sort of need to get like some sign off maybe from their investors um and you can imagine that like people who are investing a fair amount of money in hedge funds might be older what i've noticed a lot in is that like there's definitely a generational divide between those people who get crypto immediately and don't i've never met a gen zire who's like a skeptic on crypto they're like i agree you guys grow up on the internet like you go to like raves and fortnite you hang out like in in the metaverse you have um xbox credits all this stuff like you're like cash why would ever want that it's like it's like a vinyl record to you or a cd like i grew up with cds and tapes and and you guys probably didn't even have that so you get it right but the boomers they grew up with gold they grew up before the internet and so they're just and i think what happens is you work your life you build a career you climb this mountain and then all of a sudden the world's like wait this mountain's not that relevant anymore it's over here and it's very difficult to give up this mountain walk down and then to go climb this other one especially when you're 50 sitting up 50 like 60 65 70 you're like wait but like yeah my whole life i'm invested here so you kind of fight against the change in the new and so when something like big like bitcoin comes out and is like threatening or crypto to disrupt like your relevancy your skills it's the innovator's dilemma it's like you develop this core competency but like why would you give up this franchise business and generally what happens is you sort of ride it out in this slow decline and hopefully you know you maybe die before it all goes away or but like it's very rare for people later on yeah to be so to disrupt themselves which is what you have to do as a person to keep growing and what you have to do as a company to keep growing and the companies who do this the best um are the ones that do the best so amazon they talk about being a day one company always they're always day one it's always the first day because day two is like the beginning of the end and and the companies who don't like they become um you know they just they they just don't don't make it they don't stay relevant and in tech and in money um the adoption life cycle curves are moving so fast that you're own your lunch will get eaten in like not that long of time like five or ten years and it's like you're done yeah 100 and i think you're you're so on point with that me being i'm 20 years old for reference and when i first heard about crypto in 2017 it was easy for me to adopt and say okay this makes sense because you know i've had the digital version of cash just on my phone right you go to your bank account you see it's digital and i never and so this day i don't carry cash so i think you're speaking right to my generation when it comes to the adoption similar to social media right it was easy for me to get on social media and to start using it when i was 13 14 but for my parents or grandparents it's foreign they don't get it they don't understand it there's you know they're on that other mountain right and i'd love to talk on that you know i i'm a huge um i guess you could say when the social network came out i was a big fan of the movie and i want to speak on the transition from being on top of these different mountains one of them being facebook in your perspective and now bitcoin early on just what what do you think makes you and your brother able to see these cutting edge technologies and bringing it all the way back to the early days of facebook how were you able to you know find yourself in those positions yeah i mean so i think um curiosity is super key um we we also have this value called beginner's mind one of our values that gemini's beginner's mind um just always staying a beginner you know because people who are experts they have assumptions they have experience which means they're sort of biased and they have judgments so when we were starting gemini i had three i met with a bunch of people in capital markets to understand exchanges and markets three self-made billionaires from uh from outside of crypto capital markets uh basically told us it wasn't that great of an idea and uh to their credit like since then they they've sort of said oh we were wrong congratulations but the thing is they knew too much in a way so in equities exchanges there so like in equities when you buy a stock you have an e-trade account with a broker dealer that you place an order it goes to nasdaq which is the matching engine and then it's cleared by dtc and then it's custodied by state street in crypto all those four different businesses are vertically integrated into one so at gemini we you open an account you place an order it goes to our matching exchange we clear we settle we also custody so that whole loop in an equities market which is four different parts maybe even more is all all one part of gemini so we own the full stack they took their framework from equities and were like oh they heard the word exchange or platform or whatever and they're like oh well that's not that great um we didn't know what that was we're just like how do we how do we make it make it easy for people to buy sell and store cryptocurrency so i think beginner's mine's huge um another another way of saying that um is first principles you probably hear that a lot um if you hang out in silicon valley so coming out things from first principles um being being just open minded curious um in recognizing that the only thing that you can count on in this world is change um and how things cycle over um i think those are big things and sort of like being willing to ask the question like we actually were rowers in high school but there was no rowing team um we got excited or curious about rowing because our next door neighbor um was a championship rower but he went off to boarding school and i stayed local and there was no rowing team and we just asked like well we kind of curious people say we'll be good at this sport because we're sort of tall but we can't try it and there was plenty of water around and we're like well why can't we do this so we called up found a rowing club and we started the team at our high school and now rowing is a huge sport in in the town we grew up in greenwich connecticut every school including our high school our grade school has a team you look out in the water there's 28 boats every morning or every every afternoon when i was growing up zero there's like one guy who launched this single off of this club and literally that all changed because two you know myself and my brother were like crazy enough or you know whatever enough to just be like i want to try rowing and my mom got on the phone and called around marinas we found a rowing club got into harvard um and did well there and then made the olympics and people sort of saw our example and um you know now it's a huge sport so you know i interviewed richard branson a long time ago a couple years ago we did a little bit of a limited sort of what you're doing but we did it um serious for a couple episodes and it was interesting because i asked him about like how he started like playing you know the the plane company um like virgin um and and the record company and literally like and he started so many companies but every company he started like basically out of frustration is like i want to buy this magazine i'll read this type of magazine damn it like and no one's you know building this content so i'm going to do that i want to shop in a record i want to buy records in a store and he just he literally found the pain points in his life that made sense to him he solved his own local problem and then you know if it if if you're bringing value to yourself maybe you're bringing value to your friends and maybe they're friends and all of a sudden you know an acorn grows and or you know acorn grows into a to a huge tree and and that is really that's always been our story we wanted to try this sport of rowing and we went out and found a way to did it we didn't accept the fact that our school said well this is the menu of sports you have available and ron's not on it i'm sorry guys and we just said okay we're gonna conform and do that no you know f that like yeah we're gonna go out and we manufactured that sport that opportunity which led us to go to the olympics so like all of these amazing um things can happen if you just like realize i think steve jobs said this so well it's a really famous quote like the world that you inherit was built by people no smarter than you and you can change it you can shape it and and create the world you want and so few people have the confidence or the experience we're lucky because our dad's an entrepreneur so we kind of grew up in that household of someone going out and and you know taking taking the bull by the horns um and then with with facebook we wanted to connect with more kids you know more students um we were in you know boston at the time harvard's located in cambridge which is outside of boston it's sort of college central for for students um we were coming into halfway through our college careers everyone's so busy we just want to connect with people friendster was coming out and we developed um you know harvard connection which became connect you and then facebook um you know to to solve our own like what we wanted to see and um i guess with cryptocurrency it's like it was such an exciting idea because bitcoin is really like the the greatest so money is the greatest social network of all time but we bought a lot of early bitcoin on mount gox and for people who don't know that was one of the first biggest bitcoin exchanges but it was hacked it was super scary experience run in japan by two um two frenchmen in japan um and so we wanted to make that experience better better you know we had to jump through hoops of fire apostle documents wire money into japan it was really murphy and sketchy and we're like if bitcoin's gonna work if our investment's gonna pay off it cannot look like this it's gotta be as easy as like gmail or something that like my mom can use and so that birthed gemiini yeah i i love that so when you were buying bitcoin at seven dollars like there was no easy gemini platforms out there like you said it was sort of hard to buy bitcoin and you guys have solved that problem in such an effortless way yeah no that's exactly right i mean uh believe it or not there was like no app and and i'm maybe i'm dating myself because i know a lot of gen sears don't own a laptop don't even own a computer their computer is their phone which is great um but like yeah you go to this website super sketchy um gemini we saw that we have apps for both apple and android and there's other people out there doing it too um but that's really important to mainstreaming crypto to making it safe easy reliable because people read these headlines and they get totally spooked you know it's like oh it's for drug people and illicit and you can get hacked and lose your bitcoin but gemini's never had an incident we've never lost anybody's bitcoin and there's other exchanges out there too that have been incident free so but that wasn't the state we got there and whenever you're satisfied you're frustrated with something and you're passionate about it you can really bring those things together to build the change you want um and i think there's another saying i'll leave sort of um kind of close the topic on on this is sort of like when hard work meets opportunity um you don't know when opportunities are gonna come around the corner i know a lot of olympians that actually didn't make the olympic team they were alternates they're the spares and if everything goes well they never take a stroke in the olympics um they get to be called olympic athletes but they're not they're not racing yeah but what happens and this is how the world works right is sometimes someone gets injured they get sick and those alternates have to be called in to race in the boat and there are situations there are many examples um of those boats actually winning medals even gold medals so imagine you work all your life years to make the olympic team how disappointing it is to fall quite short and go but not be an athlete because an opportunity is serendipitous and that's the world is capricious race day comes you get tapped called in and you leave an olympic gold medalist so you never know when it's going to happen it can be on a beach in ibiza just beware work hard do your work and um you know be open to the whisper of the opportunity because um it rarely it rarely is like so obvious you gotta create the space and really tune yourself to the world around you and you'll keep fine then you'll start finding that and um you know i think there's there's people who really perfect that and it's not a coincidence that they keep doing this just like guys like elon musk um it's not luck it cannot be luck there are some people who get lucky you know but not him totally last thing before we wrap up tyler i know that um i read somewhere when the book bitcoin billionaires came out i believe bitcoin was three thousand dollars a coin back then and now like you said there are there's opportunity where if someone's listening to this in 2020 bitcoin's right around 18 20 000 and then when someone listens to this in the year 2030 they'll look back and have that sense of regret right but if you were to give just one last piece of information about what you're excited about going into 2021 in this new decade what would that be what would that be and what would you want to leave somebody with um i think uh this decade will be the decade of crypto um i think bitcoin and ether are two of the most exciting ones um there's this movement called decentralized finance that's happening on ethereum um there's other projects i would say if you're if you're a gen zer especially like understand crypto it is here to say it's going to re-architect the internet financial services money um it's super exciting i think the more you understand it the more you understand how to do things like code and interact with machines uh the more opportunity you're gonna have in your career uh down the road so i think it's really easy to get distracted but like even a small little investment really um focuses you to learn about these things so that's what i'm putting dedicating all of my time in my life to for at least the next decade is is just crypto and helping build that future so um i would sort of leave also with like the ultimate skill like yes it's great to learn about bitcoin and ether and stuff but even going a level up i would say the ultimate skill the meta skill is reading um you know apparently i read this blog recently that 30 minutes of reading a day even if you're a slow reader if you do that every day you will read 50 books a year which is a lot and most people make the mistake of like oh i need all this time and i got to be on vacation and on a beach before i start reading and then all of a sudden your boss calls and you know and they don't chunk things enough you know they're like i need hours or two hours or whatever but you 10 minutes a couple times a day 30 minutes a day you'll read 50 books a year in 10 years it's 500 books you could be one of the most well-read people on the earth you will learn so much whether it's crypto entrepreneurship about life and that's the ultimate meta skill if you can get into reading and learning and diving deep you will see the world um like like the people you really aspire to you'll know as much as i do you'll see as much as i see and and and then you go going back to like elon musk then all of a sudden your success is just not luck you know you you make it you control it you put in the work and and and it's it's really comforting to know that that like it's it's sort of in your hands but but time is the only thing we have if i say i have bitcoin it means i have time because when we're all dead we have nothing right so your time is your precious most precious asset we're all investors we don't know some of us don't but how we invest and use our time is our precious asset determines what comes out the other side um so those are my parting words of wisdom love that and before we wrap up where is the best place for people to stay in touch with you and learn more about gemiini and also i have to say now do you have an all-time favorite book that you'd want to recommend someone before we end this podcast so uh twitter is great uh my dms are open um i'm at tyler2ler on twitter if you want to follow gemini it's at gemini g-e-m-i-n-i um favorites are so hard um this is it's like the easy question but also the hardest because i just want to crack my head i'm like wait wait wait um but um what i'll say is this um for for intros to uh entrepreneurship zero to one by peter thiel is a great book it's very approachable it's not that long um if you understand the art form of entrepreneurship and startups that's a great one that's definitely one of my favorites uh digital gold by nathaniel popper is a great primer on cryptocurrency and bitcoin and then i have to shamelessly plug bitcoin billionaires by ben mesrick which portrays my story and cameron's story and our journey in bitcoin i love it well tyler with that being said i just want to say thank you so much for coming on the show today man it really means a lot yeah thanks casey excited to be here hopefully we do it again

Channel: Casey Adams

Views: 253,532

Keywords: bitcoin, winklevoss twins, tyler winklevoss, btc, podcast, anthony pompliano, crypto, cryptocurrency, blockchain, finance, investing, fintech, tech, technology, investing news, financial news, btc price, bitcoin price, markets, bitcoin news, media, Casey Adams, Casey Adams Podcast, Casey Adams Tyler Winklevoss, tyler winklevoss interview, tyler winklevoss and cameron winklevoss, bitcoin 2021

Id: T7V6UiUtC0U

Length: 37min 44sec (2264 seconds)

Published: Tue Dec 08 2020

Reddit Comments

[u/fresheneesz]

7:45: bitcoin will replace gold, and if it does, it will be worth at least as much as gold is today. If that happens, it'll be worth $500k per coin. Since replacing gold is only one use case, the $500k price is an underestimate.

[u/bogleboogle]

Assuming that BTC will entirely replace gold in its function as a store of wealth is incredibly optimistic.

[u/korenonthecob]

By far the most informative and logical case for bitcoin on this entire subreddit and 0 comments. Shocker.

edit: the people just want memes

[u/ahmfaegovan]

That guys head a legit rectangle

[u/Modrew]

I appreciate that Tyler W cares about little youtuber

[u/Background_Extreme68]

Now that is worth watching.