Virgin Galactic chairman and founder of investment company Social Capital, Chamath Palihapitiya, opposed Warren Buffett’s negative views on Bitcoin. Moreover, he noted that everyone should allocate a portion of their investment portfolio in the largest digital asset.
1% In Bitcoin
Palihapitiya, who is also an early investor in Facebook, recently appeared in CNBC’s Squawk Box. While speaking about the coronavirus’s effect on the traditional markets, he also mentioned Bitcoin’s involvement in the scene.
Palihapitiya believes that the largest cryptocurrency is entirely uncorrelated with any other financial asset. As such, people should invest some portion in it:
“Everybody should have 1% of their assets in Bitcoin, specifically. I think it’s just a fantastic hedge. It would be great that an average individual citizen of any country of the world has an uncorrelated hedge. Every financial instrument is correlated, unless Bitcoin.”
However, he thinks that buying large portions of BTC when the financial markets are plummeting is an “idiotic strategy.” Instead, people should do it gradually over time:
“You quietly over some period of time accumulate a position and then just never look at it again and hope that that insurance under the mattress never has to come due. But, if it does, it will protect you.”
When people look at Bitcoin as a hedge, they should examine the volumes instead of only focusing on the price, Palihapitiya added.
Back in 2017, he made a daring prediction, saying that Bitcoin will reach $1 million in the next 20 years.
Warren Buffett Is Wrong
Earlier this week, Cryptopotato reported Buffett’s newest bashing at the cryptocurrency space. The prominent U.S. investor said that all digital assets, including Bitcoin, have no value.
Palihapitiya, however, strongly disagreed with Buffett’s opinion on the matter. Social Capital’s founder noted that he had learned a lot from the Oracle of Omaha, but he is “completely wrong and outdated” on Bitcoin.
It’s also worth noting that Tim Draper, the famous American venture capital investor, also refuted Buffett’s claims recently. He said that Buffett has 50% of its holdings in banks and insurance companies, which “are not going to do well in this new decentralized economy.”
Featured image courtesy of CNBC