In a recent interview with Casey Adams, Tyler Winklevoss (founder of Winklevoss Capital
Management and Gemini Trust Company) postulates that top tier digital assets Bitcoin and
Ethereum could be far more undervalued than any of us might have anticipated. Tyler is
somewhat of an authority on the subject, as in 2014 he and his brother Cameron founded
Gemini Trust Company, an intuitive and extremely profitable cryptocurrency exchange which
allow users to purchase, sell and store supported digital assets. Gemini has since been
expanded and now offers users robust capabilities ranging from cold storage options, block
trading, clearing solutions and more. During its more than five years of ongoing operation,
Gemini purports to have never been compromised or breached from a security standpoint,
which is impressive to say the least.

In relation to Bitcoin and during the interview, Tyler states that the current market cap of gold is
approximately $9 trillion. In order for Bitcoin to disrupt the gold industry, it too will have to
reach a $9 trillion market cap. Bitcoin’s market cap as of today sits at just over $500 billion.
Given the fact that Bitcoin has a significant number of characteristics in common with gold
(verifiable, fungible, portable, durable, divisible, SCARCE), this is not unrealistic. In order to
reach that $9 trillion market cap, Bitcoin’s market cap would need to increase in value by 18
times (based on the BTC market cap as of this writing). Or, from another angle: 18 x $27,000
(current price per BTC) = $486,000. In other words, just by touching the current market cap of
gold, the price per Bitcoin would hit almost $500,000. And this does not even take into account
the possibility of Bitcoin eating into gold’s market share or, the possibility that in addition to
being a gold disruptor, Bitcoin also becomes a currency disruptor. Given that only six months
ago, the price of Bitcoin was about one third of what it is today, and given the fact that a large
majority of the general public (both domestically and abroad) do not currently hold a position in
Bitcoin, fundamental research points to a future meteoric rise in the asset’s price and market
cap, that would theoretically be sustainable over the long term.

Ethereum (ETH) presents a bit of a different situation, and may require a slightly more complex
overview of potential future price targets. Winklevoss makes the comparison between
Ethereum and “digital oil”, and identifies the Ethereum network as a decentralized (no central
authority control) global computer and operating system. He goes a step further and states that
the Ethereum network is kind of like a “decentralized Amazon”. If the Ethereum network were
to be successful in positioning itself as an open-source base layer for other decentralized
applications and projects around the globe, the market cap and value of the asset tokens would
have to be enormous. How enormous? Winklevoss posits that Ethereum may, at some point,
be worth the same, if not more, than Bitcoin. If we apply the same formula we previously used
for Bitcoin, this would mean that Ethereum’s roughly $80 billion market cap would have to
increase approximately 112 times to reach that coveted $9 trillion gold market cap, which
would place each token at approximately $78,000.

Are these price targets realistic or, is this all just a pipe dream? Our research and analysis and
experience causes us to lean towards the former. We are seeing a global transition into all
things digital. It only makes sense that, sooner than later, this will also apply to our investment
spaces and almost every future business and business project. The characteristics that have
made gold so valuable and have ensured its continued usage as a form of money and a store of
value over thousands of years are also clearly present in Bitcoin; perhaps even more so. There
are only so many ways to own gold, regardless of the use case. Many investors own gold as a
hedge against overall market volatility and economic turmoil, as well as to offset currency
debasement and inflation. It seems to us that maintaining custody of, and having immediate
access to, one’s own gold store would be the most prudent and efficient route to go. This,
however, may not be possible for many investors and so, they opt to store their physical gold
investments elsewhere. This storage method hardly seems like it would work out well in the
event that fiat currency rapidly decreases in value and true civil unrest or nationwide turmoil
has set in. Bitcoin on the other hand can be safely, securely and completely stored by an
individual investor or in our case, by an investment vehicle, provided that the appropriate
resources, technical knowledge and secure protocol are deployed and consistently adhered to.
It is for these reasons that Cloud Fire Capital, with the assistance and oversight of Coletra
Technologies, maintains custody of all digital assets in its portfolio at all times. CFC utilizes a
proprietary cold storage method (storage of private keys on physical hardware devices not
directly connected to the internet) and ensures that an aggressive and proactive cyber security
posture is continuously demonstrated. This approach applies to ALL online/digital data and
information that we manage, as well as all assets and capital under our control.

We are entering 2021 witnessing the ongoing formation and stabilization of a new class of
assets, currencies and projects, and we will inevitably see their mainstream adoption over the
next 12-18 months. We’ve already seen it on a trial scale throughout the past 6 months, and
Bitcoin has almost tripled in price in that short period of time. Looking forward 18 or 24 or 36
months, it is likely that we will see more of the same. In the case of Bitcoin, the scarcity of this
asset is far too underrated for comfort. And we can expect additional corrections in price,
market cap and desirability as time goes on. In previous years, we have become accustomed to
these price corrections decreasing the value of Bitcoin. Moving forward, might we see Bitcoin’s
price correct in the complete opposite direction? It’s very possible.