Billionaire Investor Peter Thiel Touts Bitcoin as Digital Gold
The billionaire venture capitalist is doubling down on BTC, likening the electronic coin to gold's online equal.
«I would be long bitcoin and impartial to skeptical of just about everything else at this stage with a couple of possible exceptions. There'll be one online equivalent to gold, and the one you'd bet on are the biggest,» said Thiel.
But with the exception of a few digital coins, Thiel remains neutral on the remainder of the cryptocurrency pack. He did not discount the possibility that bitcoin could be surpassed by Ethereum or other altcoins that prey on the major cryptocurrency's flaws, but bitcoin's strength is in its size.
Bitcoin controls more than 40% of cryptocurrency market cap compared to nearly one-fifth for Ethereum, as per Coin Market Cap data cited in CNBC.
Silver and Gold
The PayPal founder and Facebook's maiden major investor was clear that the direction he sees bitcoin headed in is as a store of value, not payments, the latter of which he characterized as a «awkward» application.
«I'm not talking about a new payments system. It's like bars of gold in a vault that never go, and it's a type of hedge of sorts against the entire world going falling apart.»
Very similar to the way Thiel believes in theory No. 2 Ethereum could overtake No. 1 bitcoin, it is unlikely to happen, just as silver hasn't managed to overtake leading asset class stone.
Meanwhile, the Thiel's bullish BTC prediction is not a slam dunk, with him placing the odds of bitcoin becoming worthless at between 50% and 80% compared to a 20% to 50% likelihood that the BTC price advances, falling short of providing any timeline for his theory.
«Probability weighted it is great, and also the question of how to time this I'm not going to try to do this precisely,» Thiel said.
But don't allow the percentages scare you, as Thiel's venture capital firm Founders Fund has been scooping up BTC for the past six decades. In actuality, his firm has amassed between USD 15 million and USD 20 million in bitcoin during that time," according to reports.
The timing of Thiel's prediction for bitcoin as a hedge for Armageddon was fortuitous after only a few days past the hatch on a cargo plane in Russia somehow opened and spilled three heaps of physical gold bars worth a reported USD 378 million onto a runway in Russia. Perhaps the world is trying to say something.