For a fleeting moment, Cameron and Tyler Winklevoss, whom Mark Zuckerberg once promise to “f–k . . . probably in the ear” over their claim that Facebook was, in fact, their brainchild, achieved their comeuppance. While Zuck’s company floundered, pinioned in the crosshairs of angry lawmakers and increasingly skeptical users, and quickly losing eyeballs, their early bitcoin investments catapulted them into the ranks of billionaires, landing them on Forbes latest iteration of its rich list: “The Richest People in Cryptocurrency,” published Tuesday.
But there’s just one problem with the list, and it’s directly tied to the problem inherent to the currencies themselves: the market is too volatile to be sustaining, and so are the fortunes of those who have profited from it. As soon as the list was published, major cryptocurrencies like bitcoin saw their values plummet, rendering it immediately out of date. As The New York Timesnoted, even though the magazine identified about 10 billionaires, many were no longer billionaires once the list went live:
At the top of the list is Chris Larsen, a founder of the Ripple virtual currency. Mr. Larsen was briefly estimated to be wealthier than Facebook’s Mark Zuckerberg last month when Ripple’s price peaked, taking his net wealth to nearly $60 billion.
Since then, the price of Ripple’s digital token, XRP, has fallen more than 80 percent. Forbes put Mr. Larsen’s wealth at around $8 billion, but the same holdings were worth less than $6 billion by Wednesday.
Unlike an ordinary list of billionaires whose fortunes are tied up in stocks, bitcoin billionaires (or millionaires, as it were) don’t have to disclose who they are, much less their holdings. While Forbes’s list is based on confirmed numbers and quantifiable data, it’s also necessarily based on guesswork, thanks to the secretive and often paranoid nature of its users. And as the cryptocurrency market becomes more complex, and more like existing financial markets, it is only becoming more volatile. As of Thursday, bitcoin’s price hovered just above $8,000, far below its December peak of $19,000.
Fortunately for the Winklevii twins, Larsen, and the rest of the members of Forbes’s cryptocurrency list, the erratic nature of the most popular virtual currencies probably means they’ll all regain billionaire status soon, if they haven’t already. Cameron Winklevoss is certainly looking on the bright side: “If you look at a $100 billion market cap today, now last week it might have been more like 200, so it’s actually a buying opportunity, we think that there’s a potential appreciation of 30 to 40 times,” he told CNBC on Wednesday. “A lot of people are starting to see that, they recognize the store of value properties. So we think regardless of the price moves in the last few weeks, it’s still a very underappreciated asset.”