WBD329 Audio Transcription
Bitcoin’s Path to $10 Trillion with Cameron & Tyler Winklevoss
Interview date: Tuesday 2nd April
Note: the following is a transcription of my interview with Cameron & Tyler Winklevoss. I have reviewed the transcription but if you find any mistakes, please feel free to email me. You can listen to the original recording here.
To welcome the show's newest sponsor, I talk with Cameron & Tyler Winklevoss, Gemini's co-founders. We discuss their case for $10 trillion bitcoin, sponsoring devs, proof of reserves and whether governments will ban bitcoin.
“We’re literally just getting started, we’re like 1/10th of the way to the $10 trillion market cap.”
— Cameron Winklevoss
Interview Transcription
Peter McCormack: Cameron, Tyler, how are you both doing?
Cameron Winklevoss: Good. Great to see you, Peter.
Tyler Winklevoss: Good, Peter.
Peter McCormack: Great to see you. So firstly, welcome, thank you; you are now sponsors of What Bitcoin Did, which is amazing. Thank you for doing that. How are you feeling about it?
Cameron Winklevoss: Very excited, pumped!
Tyler Winklevoss: Very excited to be supporting.
Peter McCormack: Right, so I'm going to give you a really hard year; I'm going to push you loads on Bitcoin stuff. But, you're doing loads anyway, which is really, really amazing and awesome. But, I want to use this sponsorship, not just because I want your money, but I actually want to help do some kind of bridge with bitcoiners and push some of your work; but you've been doing quite a bit anyway. Shall we go through some of that?
Cameron Winklevoss: Yeah, let's do that. I think the last time we spoke might have been three or four months ago and I think the parting questioning was around support for Bitcoin Core. Since then, we talked a little bit about that and our desire to do that, but we hadn't done a lot up to that point. You were actually kind enough to introduce us to a number of folks in the community, and I think we've made a lot of progress since then, starting with... so, we stood up the Gemini Opportunity Fund, with a sole purpose and goal of supporting Bitcoin Core development around privacy, security and scalability and to date, we have donated close to $500,000 and I'll just break that down really quickly.
We made a pledge for a $1 million gift to the Digital Currency Initiative at MIT, to be given over four years. We've obviously given the first piece of that, so that's $250,000 right there. And then we gave $50,000 to the Human Rights Foundation, HRF, to support Bitcoin Core developers to enhance privacy on the Bitcoin Network and really, if we view Bitcoin as a tool of financial freedom and a human right privacy around money, we think that's a great area to start giving back to. And then, another grant of $150,000 to John Newbery's Brink, based in London. That's a programme that sponsors and mentors amazing Core devs. Then, most recently, we announced today a support of $25,000 to mempool.space, which is an open-source blockchain explorer.
So, we've been pretty busy here and obviously, this is just the beginning. We're a few months into the Opportunity Fund, but we're really excited to kind of give back to key stakeholders in the space, because we really wouldn't be here having this conversation without Bitcoin. We owe so much to Bitcoin and to the Core and all of that, so if we don't get that right, if we don't protect that as an industry, as investors, as entrepreneurs, as founders of the above, we really have nothing. So, it's going to be a very important cause for us to be pushing and supporting going forward and I'll let Tyler add anything there in case I've missed it.
Tyler Winklevoss: No, I was just going to say, Peter, it's all your fault!
Peter McCormack: Well, listen, I tried to give you a nudge. People are saying you should nudge people to try and support devs, and I did it with Brian Armstrong, kind of trapped him in an interview; so, I thought I'd do it to you guys as well. I've given you a little nudge and it sounds like you've run off and done a lot more than even I expected, which is pretty cool. Have you learnt anything about going through that process; has anything stuck out to you?
Cameron Winklevoss: Well, I think it's like anything, it's like venture investing; you have to meet with lots of founders, understand your thesis, the particular area you want to support and how you want to support; and supporting, whether it's non-profit or venture investing, it's very similar. You meet the teams, you talk to the developers, you get a sense of their philosophy, the problems they want to tackle; and it's been interesting going through that process and trying to find really excellent teams that are doing this kind of work.
Tyler Winklevoss: Right, and I think the other thing is, because Bitcoin, the ethos is all about decentralisation, a lot of these projects and people working on it are decentralised, which can make it hard to know what's going on, so it does take a little work. You were huge; you helped with some introductions and we sort of took it from there and started networking in the cause and the different projects out there.
But hopefully, people can see the Opportunity Fund, look at what we're doing as a reference point of things that are going on in the community; and we've tried to blog about everything and talk about it on Twitter, so at least there's some sort of centring point about what an exchange like Gemini might be looking at, the different projects, and sort of elevate those up, because it can super get lost in the noise; especially when we're talking about non-profits and organisations like that versus the commercial startups, where people are trying to get rich by investing in them.
So, hopefully our efforts and Coinbase's efforts, and they've been public in blogging, are a bit of a resource of, how are two large exchange custodians in the US, that are regulated, thinking about this problem.
Peter McCormack: Okay, well it's brilliant. I'm glad you're doing it. I would want to prod you more, but to be honest, it sounds like you're flying on that. There are a few other things I want to talk to you about though, like potentials and ideas, and directly towards supporting Bitcoin. Firstly though, can you talk to me about your treasury management programme; and then I'm going to tell you about some things I'm interested in?
Cameron Winklevoss: So, I think you're referring to Gemini Fund Solutions, which is a full stack solution for fund managers and/or corporations that want to take a portion of their treasury that's sitting in dollars and put that towards Bitcoin; and we have been building this full stack solution. Of course, we're an exchange and a custodian, so we can help custody your Bitcoin; we can help execute your trades and work through the necessary workflows to get that done.
I should note that we are the custodian; we service the two Bitcoin North American ETFs that trade on the TSX and a number of other open-end and closed-end funds and so we're this, I guess, turnkey solution for people, corporations, managers and fund sponsors who want to set up Bitcoin vehicles and/or make a purchase into Bitcoin for their balance sheet.
Peter McCormack: Nice. Any update on the status of your ETF application?
Cameron Winklevoss: No comment, no! So, we currently don't have an S-1 under file, but we're continuing to look at the market place. Obviously, the chairperson of the SEC, there's a transition period going on right now and we're watching that. And I think ultimately, we've always felt that this is not an "if", it's really a "when" situation. We think there will be Bitcoin ETPs, Exchange Traded Products, in the US absolutely, likely within the next couple of years.
We already have them in Canada on the TSX. We say that, I don't know if you remember the Intel ads way back in the day, "Intel Inside"; all the PC manufacturers would sort of tout that? Well, we're sort of "Gemini Inside" these funds that are already trading publicly up in Canada and I think most people can access them through their brokerage account, even if you're in the US. The tickers, you can look them up and get access that way.
These funds have grown well north, hundreds of millions and some of them, I think, have a few billion at this point. So, I think Canada's a little further ahead, but it's just a matter of time before we see these in the US.
Peter McCormack: Okay. So, there are a few things I've got on my list; things that bitcoiners talk about. I don't know if they're on your mind, how much you guys have thought about. One thing that's come up a bunch of times, I think Nic Carter's pushed it quite a bit, is this idea of proof of reserves, that exchanges would provide a proof of reserves. Is this something Gemini's looked at doing?
Cameron Winklevoss: We definitely looked at it along the way at different points in time, especially around the auditability of custody and also, as we were looking through our ETF application over the years. Like, okay, what if we can do a proof of reserves to show that the Bitcoin are actually there; because, if you pay attention to the gold ETFs, like GLD, there's always this sort of rabbit hole of paranoia and people are like, "Is the gold actually there?" and then they put up a camera in the vault to show the gold, or you can go and do a vault tour to see if the gold is in the Federal Reserve in Manhattan. But, you can't touch the bars of gold, so are they actual bars of gold, or are they nicely painted gold-looking bars, and the weight and all that stuff? So, it's sort of this endless rabbit hole of paranoia.
Tyler Winklevoss: And, that was sort of the story the WallStreetBets' Silverstreets; this idea that there's a lot more paper out there floating and traded than there is actual silver. So, if everyone takes delivery of the silver, it's not solvent, right; it doesn't add up to the actual float there. So, definitely in the precious metals, this was definitely an argument I heard a lot about and discussed early on years ago. It doesn't seem to be something that we hear a lot about from the institutional clients, but maybe because they don't know it's possible; they're just not super aware of that.
But, I think what they are used to is relying on the fact that we're regulated, the fact that we have auditors, the fact that we're SOC 2 Type 2 and SOC 1 Type 2 compliant. Those examinations were performed by Deloitte and regulated by the New York Department of Financial Services. So, that's kind of what they're used to and we haven't really heard a lot of conversations around that, but it's super interesting and something we've considered.
Cameron Winklevoss: And to be clear also though, our custody product, you get a distinct address that is attached and yours and yours alone. It's not a commingled address, so you can always look at that address on the blockchain.
Peter McCormack: Right, that's fair, okay. A bigger thing that I will push you on that I am interested in, because I've signed up now; I am now a Gemini customer in that I've downloaded the app, I've had a play with it, I've played with it on the website. By the way, the app is amazing; so easy to use.
Cameron Winklevoss: Thank you.
Peter McCormack: I set up my regular buy, twice a month. I like the fact that you default it to twice a month, so I end up having a twice a month regular buy, which is pretty neat. So, Lightning support; where are you guys at in considering Lightning support, adding Lightning to the exchange?
Cameron Winklevoss: It's not currently -- we've been looking at Lightning, definitely evaluating it. I don't think it's currently on the immediate roadmap and we'll just keep seeing the level of adoption of that.
Peter McCormack: Okay, I'm going to push you a bit more on that. Is it just because you think Lightning's too early; is it too much work to get involved; because, it's one of those things. It's a bit like support devs; it might not have the economic return for you guys, but it does provide the support that perhaps Lightning itself needs?
Cameron Winklevoss: Yeah, it's probably a bit of a chicken and egg thing in some ways, right? It requires the more people that support it and the more exchanges that start to offer it as a channel, the more interesting the opportunity. So maybe it's a matter of us talking to some other folks and seeing if we can all push towards potentially bringing it online. I think that's probably the real issue at play.
Tyler Winklevoss: Yeah, I like the way you sort of talk about it, like Core dev support, maybe the business case isn't quite there. But I think maybe that's a little bit more -- that's a version of our homework after this podcast!
Cameron Winklevoss: Yeah, next time we come on, we'll be talking about our implementation of Lightning Network. But, I should note though that we do offer a native SegWit support, Bech32 addresses, so customers can use the bc1 and I think we've had that live. I we were the first to do that; I think it's been live for about two years.
We also batch transactions, so we're doing a number of things to try and help reduce the on-chain footprint of the transactions and relieve some of the pressure from the transactions that we generate on the exchange. Obviously, that's something we can do and it's not really incumbent on other people to do; we can just put in SegWit and we already see that benefit, both for ourselves and our customers.
So, we've definitely been thinking about the scalability issues; but I think, to Tyler's point, maybe that's a little bit of homework for us.
Peter McCormack: All right. Well, if there's anyone you want to talk to on that, you let me know. I mean, you probably know everyone anyway, but Jack Mallers has got me excited with Lightning with everything he's doing. Have you looked at what he's doing with Strike?
Cameron Winklevoss: Not familiar with it.
Peter McCormack: Right, I'm going to ping you that afterwards. That's something I think you should have a look at; I think you'll like that. Last thing, there isn't a huge amount going on with this, but I do know some people have been looking at Liquid support; is that something you've looked at at all?
Cameron Winklevoss: We have looked at it and we are familiar with the technology. Again, I don't think that falls on our immediate roadmap, but we're definitely always looking at the sidechain L2 development and basically seeing how that evolves over time.
Peter McCormack: All right, cool. Well, listen, Lightning's the one I will push you on, so we will revisit that at some point. Okay, we're going to talk about the elephant in the room, because one of the things that always happens, when people find out that you're sponsoring, the hardcore bitcoiners are going to bring up the shitcoins, the altcoins. They're going to say, "Pete, you're working with a bunch of shitcoiners", etc.
Okay, so, let's just be clear. I won't; I'm only covering Bitcoin with you guys; you know that, right?
Cameron Winklevoss: Yeah. We know the ground rules.
Peter McCormack: I'm not promoting altcoins, right; they're the ground rules. But, I guess for me, a successful year would be, at the end of next year, Gemini announces that they're dropping all shitcoins and you're going to become a Bitcoin-only company; that would be a successful year for me. But you would see, trying to convince me that DeFi is something I should care about, would be successful, right?
Cameron Winklevoss: Yeah, we think that's the more likely, more productive path. Yeah, I mean we're pretty familiar with maximalists' arguments, the maxis. And look, as Bitcoin hodlers since 2012, you would think we'd be incredibly aligned with your world view that maybe Gemini should go all Bitcoin and yet, here we are trying to convince you about the merits of DeFi.
Look, I think Bitcoin has had an amazing decade so far, right? It's at a $1 trillion market cap and our view is that it's going to hit $10 trillion within the decade and overtake gold; and that's a remarkable thing. But, Bitcoin is sort of one piece of that larger financial picture, and we still have to address this centralised financial system, this legacy system. It's all trust-based, all permission-based; and to the extent that Bitcoin is not addressing those areas, DeFi is in many ways, so permissionless lending, trading, insurance, all this really cool stuff being built on smart contracts.
So, I would love to see a world where Bitcoin is dominant; it's the global reserve currency, not just of the internet, but of everything. I think that would be an amazing and quite frankly, very realistic outcome. But, I don't want to be stuck in a permissioned financial system at the end of that road. I want to be in permissionless, trustless financial services and DeFi is re-architecting those as we speak; incredibly exciting and quite frankly, complementary.
I mean, wrapped Bitcoin is a highly tradable asset in DeFi; and I know you might have an issue with the wrapped aspect, but I think that these things work in harmony, in concert. Bitcoin is the OG, it's why we're here; it taught us how to decentralise the world. But, the things that Bitcoin isn't eating or decentralising, let's see what other projects and experiments can do to some of those stacks that are totally centralised and see if they can take a bite out of it, if you will.
Maybe Bitcoin gets there and comes up behind and eats all of it, but I love the experimentation, I love the frontier. Let's make no mistake; Bitcoin's sort of locked down. It's very conservative, as it should be. There's a ton of value in there, right; we can't screw that up. But, I think there's a strong argument for other projects that are pushing the envelope with the same ethos and mission that we all believe in, in the decentralisation and how the revolution, this movement which Bitcoin started and is still pushing heavily, is going to be one of the greatest things to personal freedom and dignity as the printing press, the personal computer and some of these watershed developments in technology.
So, that's my pitch, Tyler; feel free to pump in there more.
Peter McCormack: Tyler's a maximalist! He was texting me earlier, "Don't listen to my fucking brother".
Tyler Winklevoss: Yeah, Cameron, what are you talking about?
Peter McCormack: Yeah, what are you talking about?
Cameron Winklevoss: He's like, we're going Bitcoin exchange.
Tyler Winklevoss: If Bitcoin's just Gold 2.0, we issued a thought piece this summer where, if it disrupts gold, it's going to have a $10 trillion market cap. So, there's about a 10X from here, and that would price each Bitcoin at $500,000. That's just if it's a better gold; decentralised gold built for the internet that works like email. If it happens to secure other crypto networks; if it happens to be able to do a lot more things, like re-architect the financial legacy infrastructure of finance, then $10 trillion's just the small bull case scenario.
But, to the extent that it doesn't want to do that, I think it's really valuable for other projects, whether it's Ethereum or whatnot, to try and tackle that problem; and I don't think it takes away from the Bitcoin story, especially if Bitcoin's not sort of vying for that. So, yeah, I don't think they're mutually exclusive. We consider ourselves bitcoiners. And frankly, look, if it starts getting built on Ethereum or whatever and comes back to Bitcoin, there are no other people in this world that would benefit economically more, or there are very few, right, than us; so, we'd be totally happy for that to happen.
But, to the extent that Bitcoin doesn't want to do that, we think it's very valuable to the entire ecosystem in terms of mainstream adoption, people coming in; we just think that's just super positive for everything.
Peter McCormack: Yeah. There was one person who said to me, I'm not going to say their name; it was a dev guy who was telling me that wrapped Bitcoin is something you have to consider because, whether you agree with it or not, you need to look into it and talk about it, because it's still a Bitcoin. I was like, "Okay, that's interesting, because I've heard other people say it's not a Bitcoin". Have you actually wrapped any of your own Bitcoin?
Cameron Winklevoss: No, we have not, no.
Peter McCormack: Okay. I'm going to try that. I can't believe I'm going to beat you.
Tyler Winklevoss: Here's another question and maybe this is a question for you? The financial system in the 1700s revolved around precious metals like gold, silver, right; but things were invented since that, like joint stock companies, stock exchanges, other financial assets. And to me, if there's a financial system -- our financial system today isn't just gold; so, if Bitcoin's going to be a better gold, how do you reconcile all these other services that you have come to use and know and need in your life?
If Bitcoin's not going to step up and do that, are you okay going to centralised finance for all of that? Do you think that's more preferable than, say, a platform like Ethereum, trying to fill in those gaps? Because, I don't think that you believe that the financial system should go back to the 17th century.
Cameron Winklevoss: Even if it's decentralised and online, right?
Tyler Winklevoss: Right.
Peter McCormack: They closed my accounts; did you see that? I don't know if you saw me ranting on Twitter, but my bank I've been with for 25 years --
Cameron Winklevoss: I see you ranting on Twitter all the time; I love it!
Peter McCormack: Well, yeah; "Fuck this, fuck that"! But no, my bank I'd been with for 25 years wrote to me with 65 days' notice and closed all my accounts, because I wouldn't tell them what I -- basically because I was sending money to exchanges and they asked me what it's for. I said it's none of your fucking business, so they closed my accounts.
So, I'm using neobanks at the moment, which are fine. I kind of always wanted some kind of decentralised account, because I need pounds, dollars and Bitcoin; I need the three. Whilst I'm not a fan of Ethereum, I wouldn't be opposed to using a stablecoin, but I don't know; it makes me nervous.
Cameron Winklevoss: You could park your cash in Gemini and just use the Gemini dollar whenever you needed to go out into the world, whether it's to pay for goods using Gemini Pay, or in Ethereum and lending, trading, all that stuff. We're not certainly going to be worried if your money's going to other exchanges, right? We're in crypto; we understand that. But clearly, the legacy --
Peter McCormack: Well, the bridge is when you can do direct debits; that's the breaking point at the moment. I need a bank -- you can get debit cards and credit cards and such, and you guys have got your card, right, but you need the direct debits.
Cameron Winklevoss: Yeah, it's actually a good segue, in the sense that one of our products, our newest product we're about to launch, is a rewards credit card. So, you can earn up to 3% of a crypto, in this case Bitcoin; forget I said that, just Bitcoin.
Peter McCormack: Yeah, just Bitcoin.
Cameron Winklevoss: But, we offer really of your choosing when you're doing your normal payment behaviour and swiping your card, whether it's buying a new router at Best Buy or whatever. Instead of earning flimsy airline miles, which you can't use anyway with the pandemic; you can actually save in crypto. So, we're trying to create ways where people can really live on Bitcoin, buy, sell, store; the first three money verbs and the fourth being, earn yield and earn rewards on your credit card.
Peter McCormack: So, you've essentially done the full Bitcoin stack, in some ways?
Cameron Winklevoss: We're trying. We're trying to make it easy for you to basically earn and/or use Bitcoin every step of the way. And, one of the things with being a long-time hodler, right, is there were sort of many years where you're just sitting on Bitcoin. With Gemini Earn, you can actually earn a yield as you hodl, so you just add further, further stacking sats, as you hodl. So, we're just trying to create as many avenues and ways for folks to do that.
Peter McCormack: These kinds of products, and one of my other sponsors, BlockFi, also your partners, we've got a mutual friend in Zac Prince; they get a lot of criticism from people saying, "Not your keys; not your Bitcoin". I think people have still got their Mt Gox PTSD. They're worried about how the rates are sustainable, bitconnect style, or will there be a hack. We're in a very different place from those days, right; you sleep at night okay with these products?
Cameron Winklevoss: Yeah, I mean not your server, not your emails, right. Most people don't want to spin up an email server. But, look, I think with the advent of hardware wallets like Ledger Nanos, it's never been easier or more user-friendly to self-custody Bitcoin. And so, look, if that's a concern, obviously don't lend out all of your Bitcoin; and if you're concerned about centralised exchanges, don't store all of it on the exchange. Keep a healthy amount on that hardware wallet. I think it's really a spectrum; that's what we're finding with folks. And it's really to each their own.
Tyler Winklevoss: And, if you don't like Gemini, you can take it off. Whereas, the products where your Bitcoin's actually jailed, like Robinhood; a lot of people tried to take their crypto. They realised they actually had to sell their Bitcoin, because they never really had it; they couldn't withdraw it from Robinhood to Gemini. They had to sell it into cash, taxable event, wire the cash out, wire that to Coinbase or Gemini, then rebuy Bitcoin.
That's not a good product, for obvious reasons, as I just stated. But, if you don't like Gemini or you start getting spooked about our security, or whatever, just withdraw to your hardware wallet. And so, like Cameron said, some people don't want to run their email servers, or all that stuff; the extreme sort of tinfoil hack crowd. A lot of people are okay using Gmail and trusting Google, or using AWS and trusting one company, Amazon, that has good track records of trust and privacy, security, reliability. And I think when there are offerings like Gemini and other centralised exchanges that are user-friendly, I think ultimately it brings just a lot more people into Bitcoin, which is great for everyone in Bitcoin; even if you don't believe quite in that.
So, I think that's sort of our thinking there, is that it is a spectrum; it's not one size fits all; people come from very different life experiences. We lived through the Mt Gox days; we were luckily unscathed. That informed to build Gemini; regulated in the US like other institutions. But, other people who grew up in Argentina or Zimbabwe, where currencies are completely debased and there's zero trust in any situation, they may be more hard-line about being completely bankless, not trusting anything; whether it's with their emails, their crypto and whatnot. So, we firmly believe the more options, the better; and Gemini's our option.
The trick here that a lot of people don't realise is, if you're helping to onboard people from centralised finance, you need to build a centralised bridge into this new world of crypto. There's no way to help people effectively get their money out of JP Morgan, Goldman Sachs, without this centralised funnel, like a Gemini, because you can't plug into those banks unless there's a centralised bridge that's licenced and regulated, like Gemini. So, that's the only mechanism we know to help people transfer their value out of this crappy centralised system into this new frontier of crypto and hopefully, with all the products we offer, they can stay there forever. And if they don't love Gemini for whatever reason, they can go away, go to some other place and be completely decentralised.
But, when we go back to when we started this in 2014, there was no other way to help institutions get into Bitcoin in a high volume, high throughput way, than building what we've built.
Peter McCormack: So, when you think about it, going back to 2014, I know you had high conviction, because you went out and bought a shit ton of Bitcoin; but at the same time, to see where we are now, 2021, Bitcoin at -- we've got the clock here. Where is it? Here. Have you guys got a BlockClock?
Cameron Winklevoss: No, we need to get one.
Peter McCormack: Right, I'll speak to NVK, I'll get you one today; I'll get you one.
Cameron Winklevoss: Awesome.
Peter McCormack: I'll get you two. So, we're at Bitcoin at just $59,081, you've built this huge company obviously. We have Tesla. I mean, since we last spoke, Tesla have now bought $1.5 billion of Bitcoin. How do you take it all in? I know you had the conviction, but are we ahead of where you thought we would be; are we on track?
Cameron Winklevoss: You know, it was 2012, and so we've been in it for almost going on a decade, and I guess it's like one of those things where in some way, we believed and this was our vision of the future. I think, in some ways, we're ahead of where we thought we'd be and in some ways, behind. I think we were thinking, in 2014, 2015 and 2016, there was a lot of chatter that Wall Street's coming into Bitcoin and it really did not happen. And it's totally fine, because it's been very much an individual revolution.
Bitcoin, at least in our view, is all about empowering the individual; that's really why we built Gemini, to get people into the Bitcoin world and this alternative system, that we believe creates greater choice, independence and opportunity. I think, once you don't have alternatives, or you're locked into a system or jailed into it, that's really not great for the individual and empowerment.
So, look, I think in some ways, it's amazing to see what's happened and it's at times, surreal. Sometimes you wake up and you're like, "Wow, this has actually happened in a big way". But, the other part of me says we're so early. I mean, I want to use a baseball metaphor, but I know I need to use like a cricket, like the first wicket, or whatever!
Peter McCormack: No, try me.
Cameron Winklevoss: Are we in the first wicket, or something?!
Peter McCormack: No, the first innings!
Cameron Winklevoss: The first innings. I mean, it's really amazing to see Tesla take a $1.5 billion position, but we also have to remind ourselves that this is an incredibly founder-driven, founder-led, mission-orientated company and there are still many, many companies on the S&P 500 that aren't there, that will be there tomorrow, or might not have a founder who is as direct and able to do something like that. So, there are a lot more dominos that will, and quite frankly need to fall in this regard. We're literally just getting started; we're one-tenth of the way to the $10 trillion market cap.
Peter McCormack: Who is your baseball team?
Cameron Winklevoss: I guess we kind of grew up with the Mets, the 1986, 1987 Mets. We were just old enough to understand that championship team and know a lot of those players. But, the Yankees, it's hard not to love. The Yankees are just absolute excellence and just a class act. So, yeah, it's really hard.
Peter McCormack: I went to my first baseball game a couple of years ago in LA. I went to a play-off game. Was it Yankees? Justin Turner hill walk-off home run and the players went wild; I loved it. It was eight innings of boredom and then just this crazy end, so I think I'm an LA fan. Do you two just support the same team on everything; have you got any rivalry anywhere?
Cameron Winklevoss: It's a good question.
Tyler Winklevoss: Nothing's coming to mind.
Cameron Winklevoss: Tyler, what do you think?
Tyler Winklevoss: Yeah, I think we're kind of aligned there. But, back to baseball, I think that's kind of the charm, right. A beautiful spring evening, you're watching a game, you can get up, grab a beer, grab a hot dog, come back and you're not in danger of missing everything, you know. So, I kind of like that slow pace. It's almost a picnic and it's kind of refreshing when we're always living on Twitter, plugging in on Slack, on email. I mean, the amount of information being thrown at all of us today that are connected on the internet is just incredible, so it's kind of nice to slow it down.
Peter McCormack: So, back to this path to $10 trillion. I like your thesis, I trust you; it's making me hodl. I think the point you're making with regards to Elon Musk being founder-led is probably very similar to what's happened with Square, being Jack Dorsey-led. But, do you think there's now an imperative for all, especially these S&P and tech companies, to be looking at Bitcoin? What's your experience on the inside; are there a lot more people looking at it that we may be aware of, but it takes them time to be set up?
I don't know what is involved from someone like Elon Musk thinking, "Okay, I am interested", to actually taking the next step. How do they even plan custody? It can't just be a case of Elon Musk saying, "Yeah, let's buy some Bitcoin", and three days later they're transferring $1.5 billion on exchange to spot buy?
Tyler Winklevoss: Well, I think that a lot of times it is, that founder-driven. He certainly has a lot of friends in tech who are in crypto, so I'm sure he's been looking at this space. Remember, he started back in PayPal, so he's been thinking about money in the internet for decades; longer than me. So, I think that's how it starts. But, he's such a bellwether, right, that if you are a CEO of another company, you have to be looking at that and asking yourself, "What do I know that he doesn't know where I'm not buying Bitcoin?"
Then, you look at what's happening to the dollar, the Fed, the debt burdens, the money spending, the money printing that's been happening before the pandemic, for the last decade; and then, what's been happening to get us through that. You see what's happening over here, you see Elon Musk doing this Jack Dorsey, making these moves over there; it starts to become completely irresponsible not to at least have a story. Maybe your positions were not ready, but you have to have thought about it, I think, if you have cash on your balance sheet, if you're a CEO.
I actually think that, I can't remember if it was last year or this year, but the corporate treasury putting Bitcoin on the balance sheet started. At some point, those dominoes will continue to fall and like Cameron said, Fortune 500 companies, all of them will have something. And then, at some point, a central bank will follow. Central banks, their muscle memory has been to stack gold.
Even when they say, "Everything's happening, everything's fine. This is normal, all this money printing; no big deal. Nothing to see here", don't listen to what they say; look at what they do. And they're balance sheets, they've been stacking gold. So, that behaviour doesn't indicate that everything's okay to me, because they're getting this hard money; and then they'll discover that the hardest money in the galaxy is Bitcoin.
So, at some point, there will be a central bank that starts putting Bitcoin on its balance sheet, and then it's just bananas, right. And when you think of how early we are in the corporate treasuries doing this and the fact that central banks will do this, because it's behaviour they do with gold; and if you do it with gold, you are going to do it. It's not an "if", it's a "when" with Bitcoin. And that's just the Bitcoin Gold 2.0 story. So, I see a path to $10 trillion very easily.
But as we know, Bitcoin's a lot more than just a metal: an open-source project gold, built for the internet; it can do so much more. So, we published that thought piece of, "The case for $500,000 Bitcoin", but it's conservative; it'll be a lot more.
Peter McCormack: Well, the article made the front page of the Daily Mail website; I'm not sure if you know that!
Cameron Winklevoss: That's cool. And yeah, look, I think there are even some intermediate steps. There are pension funds and then there are sovereign wealth funds, which are sort of a proxy. The state would be like the LP of that, or the central bank. I'm sure they all have slightly different structures. But, there are some really innovative and brilliant sovereign wealth funds out there; Singapore Temasek and all that stuff. These guys and girls and all long tech; they understand that; they're out on the curve on the frontier, so it's just really a matter of time.
But, it's going to be one of those mad dashes, as Tyler mentioned. Every once in a while, I remind people on Twitter that there are only 21 million Bitcoin and there are 46 million millionaires on the planet right now. There's not a full Bitcoin to go around. You don't want to be the millionaire who's not in that 21 million bucket. Then you're no longer going to be a millionaire. It's like being at a party, the music stops, you've got to find that seat; and buying Bitcoin is like buying a pro rata seat on this network of money, this store of value network. And really, time is of the essence.
Tyler Winklevoss: Yeah. And one other thing, you're starting to see a lot of these big banks, like Goldman Sachs, JP Morgan get into Bitcoin; that's all driven by their customers. Their private wealth customers are seeing what's happening with the price of Bitcoin; they're like, "How do we get exposure?" They're like, "We don't know; we don't know how to do it".
Peter McCormack: Yeah. Well, all the announcements coming out are that these banks are allowing their wealthy clients to buy Bitcoin; that's the announcement.
Tyler Winklevoss: Well, they're freaking out because the wealthy clients are seeing the price of Bitcoin. It's the best performing asset of the last decade; it's going to be the best this decade; and they can't touch it. So, how are these private wealth managers doing their job if they literally can't get their clients Bitcoin? So, that's driving it; that's what drives all these banks. Ultimately, it's the business case and the demand from their customers.
So, as the price keeps going up, everybody's like, "What are we doing here? The risk is sitting on the sidelines. The risk is doing nothing". I think that's the ultimate -- people are like, "How do you get comfortable with holding Bitcoin?" Like, "How do you get comfortable NOT holding Bitcoin?" That's so much more risky. I would never take that bet over the last decade, or the next decade, or the one thereafter.
The way I think about it, the way you think about it, Peter, the way Cameron thinks about it, that's rapidly becoming the way everyone thinks about it. It's like, "Wait, I don't have chips on the table? That's kind of reckless and insane; I should fix that".
Peter McCormack: Well, I was just going to say, it's a bit like your friend, Jelly Hands, Mr Dave Portnoy, who sold all his Bitcoin after you recommended it to him and now he was saying yesterday --
Cameron Winklevoss: Paper hands!
Peter McCormack: I call him Jelly Hands! He's like, "What's my entry price; I'm waiting for another entry price" and it's like, "What, are you going to wait for it to go to $100,000 and drop down to $80,000? Are you buying this to hold for a few weeks and sell it, or are you buying this for a decade?"
Cameron Winklevoss: Well, yeah, I think DDTG, David Day Trader Global, likes to go in and out, right, but this is a patience play. You have to go long. We'll get him back in.
Peter McCormack: Yeah, we'll get him back in. Why do you still think Wall Street doesn't fully get this themselves? I was talking to Preston Pysh about this and it almost feels like the company treasury has leapfrogged Wall Street as the group of people in this bull run that has really been pushing the adoption of Bitcoin. What's happening with the Wall Street guys?
Cameron Winklevoss: So, it's an interesting question and I think it's no secret that the best trade over the past decade was really big tech; and it still is a great trade. But, tech used to be this sector allocation, "Hey, we're going to do a little tech here, we're going to do a little financial service industrials", etc; but really, you want it to be heavily concentrated in a few symbols.
But, it's sort of obvious and I think Peter Thiel described it as, "Too stupid to advise"! So, how do you earn your keep as an adviser if you're literally telling people, "Buy that company that makes that product that you literally spend ten hours a day on looking at; the black mirror; the iPhone"? That's some pretty straightforward "stupid" advice. And you're supposed to be the wizard who gives people this inside baseball or this complex strategy; but it's really simple.
Bitcoin's a simple, simple idea when you boil it down. It's go long, the future of store of value money, the future reserve currency. Yes, you're going to literally hodl it for years, don't look at it; and you're going to ask someone to collect a fee on that advice. It's kind of a hard sell. And so, I think a lot of the resistance sometimes is this baked-in belief of diversification in portfolio construction; and people making those straightforward, simple bets on the future sometimes become elusive in those environments.
So, I think that's part of it. And I think there may be a belief that a little bit of resistance in people who have been in capital markets for 20 years and they've climbed the mountain; they learned, became experts at what they do and then all of a sudden, there's this new thing over here; it requires you to walk down the mountain and learn again. And, stomaching that and becoming like a beginner, a total newb, where you can't just reach back on years of experience; it's very humbling.
I mean, I get humbled by Bitcoin on a daily basis. You have to be humble; be prepared to be humbled over and over again. Your patience will be tested and I think, for a lot of people, that's just not an attractive path.
Peter McCormack: All right. Last thing I want to cover with you guys before I let you go is I want to cover the regulatory side again. So, I think it's always, for a lot of people, the biggest fear. The biggest fear is that the regulators are going to come in, they're going to ban this, or they're just going to make it so difficult to use. In my mind, I think we're past that; I think we have the regulatory moat.
I think there's so much money, especially in the US, there's so much money already in Bitcoin, so many investors in Bitcoin, that I think it's actually economically damaging to hold Bitcoin back in the US, which is why I think we have some good people certainly within government and people like Mayor Francis and Senator Lummis, who are pro-Bitcoin.
You guys have been very good at working closely with regulators rather than fighting them, just trying to build that relationship. Where do you think we are? Put people's minds at ease with regards to the regulators, because we did have Mnuchin try to sneak something in before he left office.
Tyler Winklevoss: Yeah, so I think, if we were back in 2013, this would be kind of an open question. There were some hearings and we really didn't know. I think that the US will never outlaw Bitcoin. There's too much precedent that's been set in the courts. The Coinflip order, which was a CFTC enforcement action, which was upheld in the courts, considered Bitcoin a commodity like gold. We're a New York Trust Company, regulated by the New York Department of Financial Services.
So much would have to be undone, and you're talking about companies that are provided careers, building the economy, some of them are going public, they're going to become drivers of the stock market. To unroll that back is so unlikely to me; of course, it's not 0%, but it might as well be. Remember, regulators are also the stakeholders. They don't want things happening bad to the companies. They're obviously for consumer protection, but it's important that they embrace this innovation and a lot of times they go back, they go back and forth between public service and private practice and a lot of them may own Bitcoin at this point and they're part of it; they believe in it.
Certainly, the DFS believes in the promise of cryptocurrency, Bitcoin and all this stuff. And every day that goes by, you're seeing that. You're also seeing people leave a lot of these private crypto companies, go into government. I think it's such a strong amount of people who believe in this in the US that I think it's next to 0% chance that that gets rolled back for whatever reason. So, I think the ship has sailed, the case is closed; it's not an open question in the US. I think the same for the UK and Europe. Singapore, we're in a licensing process with the MAS, their top regulator there; they're embracing it.
All of the jurisdictions that are free markets, open markets, and believe in capitalism believe in Bitcoin, believe in crypto and I think see it as an opportunity, more than anything, than a threat. And anyone who's done their homework realises that to stop Bitcoin, you have to snip the internet; you have to become North Korea. And then you lose everyone else, right? You lose the Facebooks, the fame companies that are the biggest drivers of the US economy. And also, a lot of these same companies drive other economies.
So, it's completely untenable to shut the internet down to try and kill Bitcoin. So, it's kind of one of those things where you're better off working with it. And then, a lot of these folks become employed by crypto companies; a lot of them own crypto and they get a taste of it and they see the promise, they see the opportunity. So, we have a lot of champions in government and more by the day, certainly more than we had many years ago. The places that have vibrant markets, that you actually want to do business, are all pro-Bitcoin; they all embrace it.
Bitcoin, in some ways, has made the right enemies, whether regimes, authoritarian regimes, or jurisdictions, but we were never counting on that to begin with. If you start a startup, do you really care if you can do business in North Korea or certain jurisdictions? So anyway, longwinded way of saying people should, in my opinion, rest easy at night with this idea that I don't think Bitcoin will ever be outlawed in the US, the UK, Europe and certain parts of Asia.
Cameron Winklevoss: Yeah. I think at this point, there's just so much financial inertia and incentive to become a Bitcoin capital of the world. The innovation, the job creation, the value creation; and it only takes a few jurisdictions to do that, and I don't think most places want to be left behind. Imagine if you just didn't adopt the automobile and you didn't build roadways for your citizens. Then, you would miss entire industries. At the end of the day, I don't think -- few people want to miss out on that; it's just too interesting and impactful.
So, I think there's great legal precedent in the US as is, as well as, I think, the UK, Europe and Singapore and parts of Asia. And then, there's just also tremendous incentive. Look at Singapore; it's become an FX capital of the world. It's grown from a fishing village into this incredibly prosperous, pristine country and they're going to become a crypto capital. The MAS is leading the way there with a thoughtful licensing regime, right? It's incredible what they've done and what they will do; and I think a lot of people want to emulate that. So, yeah, that's our view.
Peter McCormack: Awesome. All right, listen, I know you've got to get on, so we'll close out here. But firstly, thank you for sponsoring the show; looking forward to this big year ahead, maybe a couple of years, maybe four years; we will see how we get on. Hopefully the planes will be flying soon and either I'll be in New York or you'll be in London and we can have a proper catch-up. Anything I can do to help you plug into the bitcoiners and vice versa, I'm sure we're going to have a big year, guys.
Cameron Winklevoss: Thanks so much, Peter; you've always been a tremendous resource. It's fun talking with you and I look forward to grabbing a pint on one side of the pond!
Peter McCormack: All right, Tyler, Cameron, peace out, take care.
Tyler Winklevoss: Cheers.
Cameron Winklevoss: Thank you.
