The Chairman, Spaceflight company Virgin Galactic and founder of venture capital firm, Chamath Palihapitiya, opines that if the global economy sputters to a dead end, Bitcoin could one day be worth millions of dollars.
Speaking in an interview with Morgan Creek, Digital Co-founder Anthony Pompliano, former Facebook executive and current owner of the Golden State Warriors, observed that Bitcoin was way too erratic to serve as an alternative to fiat currency. He suggested that it was much more of a speculative tool than a reliable one especially as the dollar was already volatile.
“Right now, I think what you’re seeing is that it’s still a speculative instrument, and it’s too speculative for it to be reliable.
If you’re going to make the case that it should replace fiat currency, well one thing you have to look at is the volatility of the US dollar and you can’t replace it with something that’s nine sigma more volatile. It doesn’t work.”
However, Palihapitiya, had a different perspective and while referring to his initial purchase of the Bitcoin (BTC) in 2013 and how at one time he owned almost 5% of the active circulation, he opined that if the traditional economic infrastructure collapsed, Bitcoin could emerge the new gold.
He argued that it was a matter of two extreme ends. On one end, if the US dollar plummeted in value and the global economy followed the path of deterioration, BTC would solidify its new status. While on the other end, if that didn’t happen, BTC could go to zero.
He referred to Bitcoin as a binary investment and said that the current economic climate gave the leading cryptocurrency a 5% to 10% chance of reaching the million-dollar level.
“I’ve always thought of Bitcoin as a very binary investment. Whether it goes from $80 to $8,000 to $6,000 to $3,000 to $13,000 – it doesn’t matter. This is either $0 or it’s millions. Because what it will do is it will create a quasi-gold standard.
It’ll create an index, except instead of having to own gold, where gold is owned by central banks, it is an instrument that has value that is determined by and between its participants, and it’s owned by everybody…But now, if the probability was 1% that it would be valuable, unfortunately now the probability is probably like 5 or 10%.”
While speaking in an interview on CNBC’s Squawk Box, he was of the opinion that everyone should have a 1% allocation to Bitcoin. He however advised that it was ridiculous to believe BTC was a shield against major global setbacks like the recent COVID-19 pandemic.