Have you heard of the bitcoin billionaires?
There are a few of them out there, but the first ones were Cameron and Tyler Winklevoss. They are identical twins, Olympic athletes (on the U.S. rowing team at the 2008 games in Beijing), and graduates of both Harvard and Oxford.
While at Harvard, they had the idea for a social networking website to better connect students. About a year into the project, they needed a programmer to finish the job. One was recommended to them … a fellow Harvard student named Mark Zuckerberg.
They say he agreed to finish the programming. But a little over two months later, Zuckerberg launched his own website called … Facebook. Yes, the Facebook, which is now worth nearly $800 million.
The Winklevoss twins accused Zuckerberg of stealing their idea. They sued Facebook. And they gained widespread fame from a 2010 film about the story called The Social Network, which didn’t portray them in the most favorable light.
That’s quite a life, and they’re not even 40 yet.
But as big as the Facebook dispute was, they are cementing their legacy with bitcoins and cryptocurrencies. They know the industry as well as anyone, and their latest prediction will amaze you.
If they’re right, there is a ton of money to be made …
All of the lawsuits and countersuits surrounding Facebook were eventually settled for $65 million, including $45 million worth of Facebook (NASDAQ:FB) stock. With their newfound millions, boosted significantly by Facebook’s rising share prices, the twins tried their hand at venture capital investing in Silicon Valley, the center of technology innovation. They found themselves thwarted by industry insiders. If they were “enemies” of Mark Zuckerberg, other tech companies wanted no part of them.
Finding no deals, the brothers headed on a vacation to Ibiza, a Spanish island in the Mediterranean Sea known for its night life. While at a famous local disco called the Blue Marlin, they ran into a guy who pitched them on a new concept — cryptocurrencies.
David Azar, one of the original bitcoin bulls, smooth-talked himself into the twin’s circle and was convincing enough to pique their interest. The twins had their doubts at first, but they went all in after doing their research. (Let’s hear it for good, solid research.)
In 2012, they bought 120,000 bitcoins for an average price below $10 per coin. They were laughed at — ridiculed even. They had invested more than $1 million into a new digital currency known more for its use on the dark web … by people who wanted to stay underground.
Well, the Winklevoss boys got the last laugh … and then some. Their initial stake soared an eye-popping 200,790% when bitcoin reached its peak of $20,000 on December 17, 2017. With the price just under $10,500 today, the twins’ initial stake would still be worth over $1 billion.
They didn’t ride off into the sunset. They are still very much involved with bitcoin and cryptocurrencies, even starting their own exchange called Gemini for buying, selling, and storing bitcoin and altcoins (any crypto other than bitcoin).
And just last week, Tyler and Cameron Winklevoss made what they call “The case for $500K Bitcoin.”
I’ll do the math for you. That’s a 4,700% increase from today’s prices.
That’s higher than I’ve targeted, but it is definitely not out of the question. I have said many times before that I expect bitcoin to reach $100K in the coming years, which would still be a nearly 10X return from today’s prices.
That title reveals a big reason why I — and the Winklevoss twins — are so bullish on bitcoin and altcoins. As cryptocurrencies go more and more mainstream among consumers and investors, they are also increasingly sought after as a hedge against currency devaluation. And with governments around world the spending record amounts of money to support their economies in a time of pandemic, there is huge pressure on traditional currencies.
Cryptocurrencies are a terrific hedge because they cannot be manipulated by governments or anyone else. Many — like bitcoin — even have a fixed supply written into their software code. That makes them a great “store of value” holding.
I’ve said it before, and the Winklevoss twins also believe this. Cryptos are a better hedge than gold, which up until now has been … well … the gold standard.
Cryptos have the potential to be better because new supply coming onto the market even shrinks in some cases. Like on May 11, when bitcoin went through its third “halvening.” That’s when the reward for mining new coins is cut in half. The result is less supply coming onto the market at a time when demand is increasing. That’s a recipe for a “supply shock” that has historically sent prices into the stratosphere.
After the prior two halvenings, bitcoin and select altcoins surged triple digits in the 12-18 months that followed. In some situations, they climbed four and five digits!
Altcoins actually outperformed bitcoin. As much as I love bitcoin (I bought more this week on the pullback), they are the bigger opportunity. For example, after the first halvening, a lesser-known coin called Primecoin soared 3,708% from July to November 2013.
I’m with Tyler and Cameron Winklevoss. Big profits are ahead for bitcoin — and especially altcoins. It’s still early enough to get in on the massive gains ahead.
Getting in early is key to making life-changing changing profits. The good news is that it’s still early enough that massive gains remain ahead.
On the date of publication, Matthew McCall did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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