Former Facebook Exec Makes Case For $1 Million Bitcoin Price

Former Facebook Exec Makes Case For $1 Million Bitcoin Price

Crypto news Lifestyle Technology
April 16, 2020 by Super System
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bitcoin business news

Can Bitcoin Really Become The New Global Reserve Currency?

Bitcoin Price

Ever wonder how some of the early purchasers of Bitcoin are faring these days? Here is an example. The CEO of Social Capital and former Facebook exec Chamath Palihapitiya was one of such investors, buying up a chunk of Bitcoins when their price was just $80 per coin. At this point, he figures he owns 5% of the Bitcoin monetary base.

In a recent conversation with Morgan Creek Digital Partner Anthony Pompliano, Palihapitiya expressed his take on the current state of the economy and how to get things back on track. He also explained that while he believes that Bitcoin is too volatile to be adopted on a massive scale, it could stand to gain becoming a global reserve currency during the major economic crisis of the 2020s. 

Volatility Is Still Too High

Palihapitiya doesn’t believe that as things stand Bitcoin is ready for the “big time” in the context of the current economic turmoil. He notes that cryptocurrency is still a speculative instrument that is too much so to be reliable. In order for Bitcoin to replace fiat currency, it has to be as or less volatile, whereas currently, Bitcoin is much too volatile, so it doesn’t work as a replacement. 

In fact, Palihapitiya believes that it is that volatility that is preventing Bitcoin from being adopted in the economy more deeply. Fiat currencies, after all, are pillars of modern business primarily because they are relatively stable. In order for Bitcoin to rise, not only do speculators and day traders need to be flushed out, but the cryptocurrency must maintain long-term holders, and the potential for the current financial infrastructure must be on the brink of an implosion.

Bitcoin’s Opportunities In The 2020s

Beneficially for Bitcoin, the current economic system looks weaker than it did even just as far as a few months ago. Palihapitiya believes that we are slowly driving to the precipice of an economic cliff, and we will soon be falling fast off of it with a brick wall waiting for us at the end. 

When it comes to that, the world will need to choose between embracing inflation (and removing economic inefficiencies) or debasement of the global economy. If debasement looks likely, Bitcoin will begin to really thrive. However, this move towards the brick wall will take about a decade to manifest. 

He also doesn’t believe that the wild price swings of Bitcoins matter in the grand scheme of things. “It’s either zero or million,” he says. When a Bitcoin is worth $1 million dollars, Palihapitiya believes that it will adopt a quasi-gold standard, where the hard cash will be in possession of people rather than banks. And the probability of this scenario has recently increased. If before this probability was 1%, he says, it is now closer to 5% to 10% likely. 

A decade from now, in 2030, we may not find a way to inflate ourselves out of this economic calamity. The only way to escape rampant inflation is by creating some new type of gold-standard, but doing so between global governments and central banks will be just short of impossible to accomplish. These entities will never agree on one thing, but then the people will do so with Bitcoin. 

A Word From Some Others

On the flipside of this argument, Elon Musk, the CEO of Tesla, recently said that he does not believe that Bitcoin will become the primary database for money. Billionaire investor Ray Dalio agrees with this view as well, thinking gold will be a better option for those searching for a financial safe haven.

In January 2020 Bitpay’s Vinny Singh predicted that crypto assets will reach an all-time high by going over $20,000 by the end of 2020. Around the same time, there was a report that indicated that financial advisers, in growing numbers, were planning on adding Bitcoin to their portfolios, as well as other crypto-assets. 

 

 


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