Gold or Bitcoin? Billionaire's Choice
Photo Credit: Twitter/vagnerresearch
Social Capital CEO Chamath Palihapitiya told CNBC's Delivering Alpha conference that gold has a strong rival, Bitcoin.
“I believe bitcoin has effectively replaced gold. And it will keep happening. And the market capitalization will grow,” he said optimistically.
Reporting from Yahoo Finance in Jakarta, Friday (1/10/21) although Palihapitiya did not set a target on the price of bitcoin, he had predicted in early 2021 that bitcoin could potentially reach USD 200,000 in about five to 10 years.
Nonetheless, Bitcoin is currently trading below $42,000 after hitting $50,000 in early September.
In the midst of this sata turmoil, Palihapitiya is worried about continued inflation. He looks for assets that are natural inflation hedges including hypergrowth, cash-generative and uncorrelated assets, his last resort being the camp where bitcoin falls.
Bitcoin briefly failed to perform as a hedge earlier this week when the Evergrande headlines surfaced. The Chinese property developer's debt woes sent stocks around the world reeling and lowered the price of bitcoin with them.
These investors fear because they are running away from stocks and cryptocurrencies. They prefer to switch to fixed income securities and gold.
Meanwhile, Palihapitiya is a fan of blockchain Solana, Ethereum's competitor, still believes in the power of crypto. Solana's profile is on the rise and its original coin is currently the seventh largest cryptocurrency by market cap.
While the price of bitcoin fell in September, it is still up and down. So far in 2021, the price of bitcoin has gone up 24% while the price of gold is down about 7% in the same period.
Palihapitiya may not be willing to suggest where the bitcoin price will go next, but he does see bitcoin being very big.
“We should all pay attention to it!” he said. These venture capitalists continue to be difficult for lawmakers to control.
“I think it's very difficult to kill [bitcoin]. It's completely headless. It is completely peer-to-peer. I thought it was scary and exhilarating,” Palihapitiya said.
Palihapitiya wasn't the only billionaire optimistic about bitcoin at the Delivering Alpha event. Orlando Bravo, co-founder of private equity firm Thoma Bravo, was also present saying the same thing.