Billionaire pleads for $ 1 million Bitcoin price

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CEO of Social Capital and former Facebook

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Chamath Palihapitiya, an executive, was one of the first Bitcoin investors. He bought much of the cryptocurrency in 2013 when the price of Bitcoin was around $ 80 a piece, and he claims that at one point he held about 5% of the Bitcoin monetary base.

In a recent discussion with Anthony Pompliano, digital partner at Morgan Creek, Palihapitiya shared her views on the current state of the world economy and the different options governments have to get things back on track. In addition, Palihapitiya explained how Bitcoin could handle the gain from the major economic crisis of the 2020s.

Although he thinks Bitcoin is still too volatile for mass adoption today, Palihapitiya believes that the chances of Bitcoin as a global reserve currency have increased in recent months.

Bitcoin volatility is still too high

When asked for the first time his thoughts on Bitcoin in the context of the current global economic crisis, Palihapitiya pointed out that Bitcoin is not ready for prime time as it exists today.

“It is still a speculative instrument, and it is too speculative for it to be reliable,” said Palihapitiya. “If you want to argue that it should replace fiat money, one thing you have to consider is the volatility of the US dollar. You cannot replace it with something that is nine more volatile sigma. It does not work. ”

Palihapitiya added that traditional fiat currencies are essential pillars of business today because of their relative stability. In his view, Bitcoin’s volatility is a crutch that prevents it from continuing its adoption.

” [Extreme volatility] grows [Bitcoin] in this ghetto of day traders and speculators, “said Palihapitiya. “And, right now, this is where we are. We are in this ghetto. ”

In For Palihapitiya, the day traders and speculators must be flushed out for Bitcoin to exit the volatile asset ghetto. In addition, the interest of long-term holders must be maintained and the potential for the implosion of traditional financial infrastructure must increasingly appear.

The advisability of the price of Bitcoin in the 2020s

The good news for Bitcoin holders is that, according to Palihapitiya, the existing financial system seems much weaker than a few months ago.

“We are driving slowly but we are driving towards a cliff,” said Palihapitiya. “And then, we will drive much, much faster on this cliff or on this hill. And at the end, there is a huge brick wall. “

According to Palihapitiya, the world will have to choose between inflation (and the elimination of economic inefficiencies) and debasement once the global economy collides with this brick wall.

“Path dependence for Bitcoin is if it looks like [debasement] is likely, it will really appear as a safety leak, “added Palihapitiya.

The former Facebook chief noted that this evolution to a brick wall will take ten years to take shape.

Like many others, Palihapitiya views Bitcoin as a binary investment, and in his view, these price fluctuations of several thousand dollars are unimportant in the grand scheme of things.

“It’s zero or it’s millions,” said Palihapitiya.

In the event that a single Bitcoin is worth $ 1 million or more, Palihapitiya views cryptocurrency as the basis of a near-gold standard where hard money is held by everyone rather than central banks. Palihapitiya believes that the likelihood of this scenario occurring in the real world has recently increased.

“If the probability were 1% that [Bitcoin] would be valuable, unfortunately, the probability is now probably around 5% or 10%, “said Palihapitiya. “And there’s a good chance that by 2030 we won’t find a way to inflate our outcome. The only way to break inflation is essentially to create a near-gold standard, but it will be almost impossible to do so between governments and central banks. They will never get along on an instrument and they will never get along on an exchange [rate]. But then, below, people could decide to do it [with Bitcoin]. ”

On the other hand, Tesla CEO Elon Musk recently shared his opinion that he did not think Bitcoin would become the main database for money. In addition, billionaire investor Ray Dalio agrees with the negative thesis regarding fiat currencies, but believes that gold will be a better option for those seeking refuge.

In terms of potential price movement in 2020, Bitpay’s Vinny Singh predicted that crypto assets would hit a new all-time high above $ 20,000 by the end of the year in January. A report from the same period indicated that more financial advisers were planning to add Bitcoin and other cryptographic assets to their clients’ portfolios this year.

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