In the year 2020, the world’s smartest investors are buying into Bitcoins amid an era of significant quantitative easing by global central banks.
Such macros taking shape in the ever-changing crypto market has led Gemini crypto exchange co-founders Tyler and Cameron Winklevoss to disclosing why investors are buying Bitcoin, amid recent price correction prevailing.
In an interview with CNBC, the highly revered twins spoke on the inclusion of Paul Tudor Jones, MicroStrategy, Guggenheim, and lately MassMutual as a strong indicator that the times are different.
Tyler Winklevoss said the rally isn’t retail-driven this time.
- “These are the most sophisticated investors, the smartest people in the room, buying the bitcoin quietly. It’s not a FOMO thing, so it’s very different than in 2017. This cast of characters, companies, and investors were not in bitcoin back then. 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.”
He also spoke on why the inflationary properties had led a mass exodus of investors from fiat currencies into the crypto market;
- “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.”
What this means
Bitcoin has a significant first-mover advantage, not only because it’s the first crypto as we know it, but because it was the first one with a gold-like store of value properties.
- As such, it enjoys tremendous network effects (not dissimilar to those experienced by social networks like Facebook and Twitter), due to its vibrant community of users, developers, miners, exchanges, custodians, etc.
- Nothing demonstrates this better than the fact that Bitcoin is an open-source project that can be copied or forked by anyone in the world at any moment. And yet despite being forked many times over the years, it remains the dominant crypto (store of value or otherwise) both in terms of market capitalization and liquidity. This race is Bitcoin’s to lose.
It is important to note that as global financial regulators begin to implement their regulatory framework, supporting cryptos like Bitcoin, it becomes a matter of months for global commercial banks and multinationals to increase their buying pressures on Bitcoin. The present price surely looks like a discount when considering those variables.