Venture capitalist Chamath Palihapitiya, a self-proclaimed “disciple” of billionaire Warren Buffett, says bitcoin is the best financial hedge against an uncertain world economy. And unlike his anti-crypto mentor Buffett, Palihapitiya thinks you should buy some bitcoin to protect yourself.
“It’s the single best hedge against the traditional financial infrastructure,” Palihapitiya told CNBC. “Whether you support the fiscal and monetary policy or not, it doesn’t matter. This is the schmuck insurance you have under your mattress.”
Palihapitiya first bought the original cryptocurrency several years ago when its price hovered at $100. In 2013, he and his Silicon Valley tech pals once owned 5% of the entire float of bitcoin.
Basically, Palihapitiya says you should invest in bitcoin in light of today’s uncertain economic outlook. Besides, he reasons, what have you got to lose by allocating a tiny portion of your investment portfolio into crypto?
Palihapitiya, a former senior executive at Facebook, is the founder and CEO of Social Capital, a private equity fund based in California.
Palihapitiya joins a growing chorus of crypto evangelists who say that despite bitcoin’s volatility, it’s not a bad idea to cover yourself by investing a little in it.
This is a similar argument to the one recently made by Arthur Hayes, the CEO of the Bitcoin Mercantile Exchange (BitMEX), the world’s largest bitcoin derivatives trading platform.
When asked why anyone should buy crypto, Hayes says it’s because it could be worth a lot of money in 10 years — or it could be worth zero. So Hayes concedes that investing in bitcoin is a gamble. But he says it could pay off handsomely, so why wouldn’t you invest in it?
Chamath Palihapitiya’s outlook on crypto differs sharply from his “mentor” Warren Buffett, who has derisively dismissed bitcoin as “rat poison squared.”
As CCN reported, Buffett has also repeatedly trashed all cryptocurrencies as worthless, speculative gambling. Moreover, he predicts that crypto will eventually come to a bad ending.