The exponential growth of Bitcoin may be caused by a global disaster
According to a well-known billionaire, all people should secure at least 1% of their money at BTC.
The billionaire’s opinion
A billionaire and CEO of Social Capital and Virgin Galactic Chamath Palihapitiya say that Bitcoin is not linked to traditional financial markets, which is one of the reasons why people should invest at least 1% of their total wealth in it.
In an interview for Unchained Podcast on June 23rd Palihapitiya said that hard-working people need assets like Bitcoin to insure their funds because the crypto is virtually uncorrelated to traditional markets, which can fall in value due to the bad behaviour of legislators.
Bitcoin is a safe haven
The CEO pointed out that for the price of Bitcoin to rise sharply, it would have to be very bad in the financial system, and such a catastrophe is not desirable because it will affect the finances of all people globally.
“If your investment in BTC pays off (several times the return on investment), it means that the world will be in a very disastrous financial situation and this will have huge consequences for many people we know and care about, who have not secured themselves into a leading crypto. That’s why you shouldn’t want Bitcoin to go up in a flash.”
What should we do?
According to Palihapitiya, people should make sure that if such a catastrophe happens, and Bitcoin goes to new heights rapidly, the money invested in the crypto will be able to secure them. The director of Social Capital and Virgin Galactic considers it a good example to put 1% of all money you have in your Bitcoin wallet.
After all, any other asset class such as stocks, debts, real estate or commodities are closely linked to the legal framework of the financial markets, and these are based on fiduciary money.
If the government decides to print $100 billion, or if it decides to impose legal restrictions on traditional asset classes, it is able to do so, but decentralised cryptos are beyond the direct control of the institution. Cryptos have no managers, so if a catastrophic crisis comes, Bitcoin will be the last resort.
A billionaire speculated that Bitcoin could reach the level of millions of dollars or more in the future, which is why he himself invested a considerable amount of money in leading crypto.
According to many analysts, it is not possible for BTC to reach as high a level as a million dollars, but Chamath emphasized during his speech that there would have to be hyperinflation for a cryptocurrency to reach such a level. After all, Bitcoin is not a predictable pattern of financial transactions, but rather a speculative bubble.