“The fabric of society is frayed,” said the former Facebook exec.
Bitcoin’s (BTC) price has risen dramatically over the past days and weeks, recently wheeling past $40,000. An asset largely untied to governmental authority, Bitcoin is a hedge against global uncertainty, according to venture capitalist and billionaire Chamath Palihapitiya.
Citing a possible five or 10-year time horizon, Palihapitiya said he thinks Bitcoin will likely reach $200,000 at some point. “The reason is because, everytime you see all of this stuff happening, it just reminds you that wow our leaders are not as trustworthy and reliable as they used to be,” he told CNBC in an interview on Thursday. He added:
“So just in case, we really do need to have some kind of, you know, insurance we can keep under our pillow that gives us some access to an uncorrelated hedge.”
Since the pandemic gripped the world in 2020, governments around the world have taken various measures to combat its economic impact. The United States in particular has printed and spent massive sums of dollars.
Borderless and run by the people, Bitcoin allows holders to control their funds by themselves — no centralized authority required. Additionally, in October 2020, Fidelity released a report showing Bitcoin’s lack of price correlation to other markets, such as gold and stocks.
“It’s going to eventually transition to something much more important, but for right now, you’re just getting all these data points that prove this thing,” Palihapitiya said of Bitcoin, adding:
“The fabric of society is frayed, and until we figure out how to make it better, it’s time to just have a little schmuck insurance on the side, and everybody’s running in. It’s just an incredible thing. I could never have imagined it.”
Crypto has seen a noteworthy amount of adoption since the beginning of 2020, including large players gaining interest in BTC. Some influential financial figures, however, such as Shark Tank’s Kevin O’Leary, still remain skeptical on Bitcoin, citing regulation as a potential issue.
The U.S. Commodity Futures Trading Commission has previously classified Bitcoin as a commodity, although recent action shows increased regulatory overwatch on the crypto space, partly evident in a government proposal limiting self-custody digital asset wallets.