Bitcoin is the “schmuck insurance” against traditional financial system, claims Social Capital CEO

  • 10 July 2019, Wednesday, 06:30

What do you have under your mattress? A stash of dollar bills stitched between the padding, or perhaps a bunch of gold bars (I doubt it), or maybe a hardware wallet with Bitcoins?

According to many, the last one seems unlikely. On the other hand, according to Chamath Palihapitiya, CEO of Social Capital, a well-known Silicon Valley VC and most importantly, early Bitcoin investors, the last option is the most likely.

In a recent interview with CNBC Squawk Box, the venture capitalist shared his opinion on Bitcoin, not as a revolutionary digital asset, one that is universal, ubiquitous and authority free, or as a method of payment which can one day be used in every little shop, but rather as a “hedge” against the larger traditional market.

Bitcoin and its proponents have been forthright in their relentless opposition to government-backed currency, weaponized by their unchecked fiscal and monetary policy. This very sentiment was highlighted by Palihapitiya in his reply to CNBC’s Joe Kernen, who was privy to the conversation around Bitcoin six years ago, but paid no attention.

Palihapitiya reiterated his statement,

“It is the single best hedge against the traditional financial infrastructure. Whether you support the fiscal and monetary policy or not, it doesn’t matter. This is the schmuck insurance you have under your mattress.”

Kernen however, veered away from the topic of Bitcoin and emphasized on blockchain technology, citing its benefits and adding that the current use of the top cryptocurrency is “by default.”

The Social Capital CEO, who in 2013 owned 13 percent of the entire supply of Bitcoin with a few friends, has always been a supporter of the cryptocurrency and even predicted a $1 million BTC price valuation in the next 20 years. Hence, his praise of Bitcoin and marketing of the same seems about right.

Palihapitiya concluded by inviting the CNBC panel, which included Sir Richard Branson, to take the plunge into decentralized currency. He stated,

“Just buy the coins. It’s a fantastic instrument, just in case. Just in case, all these geniuses may not turn out to be geniuses.”

Branson added that Bitcoin can be used to purchase a ticket on Virgin Galactic, a space-tourism company which is going public following a merger deal between the duo.