Social Capital CEO and billionaire Chamath Palihapitiya has argued that bitcoin’s price may increase significantly over the next decade.
Palihapitiya, a former Facebook executive, began investing in bitcoin in 2013 when the price was $80 per coin and claims to have owned around 5% of the total supply at one point.
Speaking in a discussion with Morgan Creek Digital Partner Anthony Pompliano, the billionaire investor gave his opinion on the global state of the economy in light of the coronavirus outbreak. In particular, Palihapitiya argued that bitcoin could be in place for major gains from the economic fallout over the next decade.
Palihapitiya called bitcoin too volatile in its current state for mass adoption, but has potentitla to succeed as a reserve currency.
He said,
It’s still a speculative instrument, and it’s too speculative for it to be reliable.
He continued,
If you’re going to make the case that it should replace fiat currency, one thing you have to look at is the volatility of the U.S. dollar. You can’t replace it with something that’s nine sigma more volatile. It doesn’t work.
Palihapitiya said the volatility of bitcoin has created a “ghetto” of day traders and speculators limiting the currency from reaching mass-market appeal.
However, he argued the current economic client is pushing towards the debasement of fiat, which would have ramifications for bitcoin.
He said,
We are driving, slowly but we are driving, towards a cliff…The path dependence for Bitcoin is if it looks like [debasement] is likely, it will really emerge as a flight to safety.
Palihapitiya explained that bitcoin is a binary investment, saying “This is either zero or it’s millions.”
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