The CEO of Social Capital and Virgin Galactic Chamath Palihapitiya, in a recent interview with Unchained called Bitcoin “jewelry insurance” and added that investors who add the crypto-asset to their portfolio as uncorrelated hedge do this to protect their wealth.
That way, if the government takes action that is generally labeled a bad idea by the public (but driven by short-term policy stimulus) that has an impact on the financial economy, investors could fall back on it.
“One thing I’ve seen in every product is that you need real simplicity. And because of that, I want to encourage people to really embrace the simplicity of Bitcoin – it’s basically jewelry insurance in case those in charge really screw it up, ”he said.
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The 43-year-old billionaire believes that lawmakers have a tendency to find what he calls a “short-term window dressing solution” that would have long-term economic effects, as in the case of the current US situation. Economy. The government controls more than 50% of the country’s GDP due to the rise in deficit and debt.
Palihapitiya commented on why he thinks Bitcoin would be in the best position to serve as a hedge in place of another asset: “Bitcoin to me is the only thing I’ve seen so far that is really fundamentally uncorrelated with this decision. Decision-making process and to this decision-making body. “
He continues: “Ultimately, all other asset classes – stocks, debt, real estate, commodities – are closely tied to a legal framework and interconnectedness in the financial market that brings many governments together – that is how it is. “
When asked how he got into the Bitcoin community, Chamath Palihapitiya stated that his decision to join the Bitcoin world was inspired by a well-known person in the crypto room – Wences Casares, CEO of Xapo Bitcoin Wallet. On the way to Las Vegas for the 40th birthday of Casares, the Xapo boss Palihapitiya accused the digital currency. After the pitch, the billionaire bought $ 1 million in BTC for the first time.
See also: American investor Jim Rogers says Bitcoin will go down and eventually go to zero
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