Another billionaire venture capitalist has praised the leading cryptocurrency bitcoin for its features that make it a hedge in a deflationary cycle. Chamath Palihapitiya has a history of investments in startups that Google and Microsoft acquired later. The Social Capital CEO, while talking on CNBC daily, criticized the US Federal Reserve for launching a stimulus package that assisted to inflate assets instead of helping taxpayers and consumers. The US central bank’s move neither solved income disparity nor unemployment, he added.
“We have completely divorced the economy from the stock and the bond markets,” Social Capital CEO Chamath Palihapitiya says. “The Fed has been the principal agent of that obfuscation.” https://t.co/5jHjdz1V1L pic.twitter.com/Mq9uztM0V1
— CNBC (@CNBC) May 12, 2020
Social Capital CEO recommends bitcoin.
When asked about where should investors put their capital as the economy shrinks popped, Palihapitiya recommended the leading cryptocurrency. H said that he still struggles to find anything that is as uncorrelated to anything and to everything else than bitcoin. The billionaire venture capitalist praised bitcoin for its lack of correlation with other traditional assets.
The CEO further suggested that the feature alone could help investors obtain insurance against a deflating economy, citing another billionaire venture capitalist Paul Tudor Jones, the founder & CEO of a $22 billion hedge fund, for taking a similar approach.
Palihapitiya warns of a bad deflationary supercycle.
While the Social Capita CEO praised the Federal Reserve’s efforts to protect the US economy amidst the ongoing coronavirus pandemic, he also warned that the central bank’s decision to purchase corporate debt ETFs and balloon its balance sheets further could quicken “a really bad deflationary supercycle.” Palihapitiya is not the only billionaire venture capitalists who has praised bitcoin in recent time. Earlier billionaire Tudor Jones revealed that he is holding about 1-2 percent of his net portfolio in the Bitcoin futures.
The billionaire investor, like Palihapitiya, praised the cryptocurrency for behaving as an insurance against the Fed’s massive money printing. The leading cryptocurrency witnessed third halvening event this week and is currently trading at just below $8,900.
