Former Facebook executive Chamath Palihapitiya says that bitcoin is the only insurance policy available today against inflation and other economic strife.
Palihapitiya: We All Need Some Bitcoin
In a recent interview, Palihapitiya commented that while many bitcoin advocates are struggling to understand who is better for the economy in this coming election – either Trump or Biden – he says that neither candidate will do well for the U.S. dollar. In a classic prediction of gloom and doom, he stated that the U.S. dollar is going to fall even further, and that inflation will be on the rise.
He says that the only thing helping him to sleep at night is the fact that he’s got a bunch of bitcoin units socked away somewhere in case problems ever occur. He commented:
The reality is that [the Federal Reserve and the U.S. Treasury] have printed so much money that the likelihood is that we’re going to continue to see asset price inflation independent of who’s in the White House.
The statement is a clear stab at the coronavirus relief bill that was approved in late March. A bill that granted working people making under $75,000 roughly $1,200 each. Now, Congress has been chatting about a second stimulus bill that could give struggling Americans even more money to help them cope with the coronavirus pandemic, though few results have emerged from these talks.
But while this money is no doubt helpful for a short period, the fact is that the country is still being ravaged by heavy unemployment and damaged markets, something Palihapitiya believes isn’t going away any time soon. He says that bitcoin has become one of those assets – much like stocks or gold – that should be a requirement with everyone’s portfolio. He mentions:
I still think that what I talked about soft of eight or nine years ago still holds, which is a one percent hedge in our portfolios… The reality is [bitcoin’s] fundamentally not [correlated with stock markets] because it is underpinned by a set of believes that are completely orthogonal to the orthodox that runs the world today, and it is completely the inverse of how the financial infrastructure of the world operates.
Chaos Would Ensue
When it comes to investing in bitcoin, he believes buying and selling crypto for short-term profit is a big mistake that many of today’s investors are making. He commented that the idea was to purchase the asset and keep it hidden away somewhere in the hope that much like health insurance, the owner would never have to use it. He states:
Hope that you never need it because the amount of actual chaos that will drive bitcoin appreciation is not something we actually really want to see.
Palihapitiya was an early bitcoin investor, and first began purchasing the asset over seven years ago.