Billionaire Peter Thiel, a co-founder of PayPal and early investor in Facebook, says that Bitcoin has tremendous value as a store of wealth and not as a currency — but he is still banking on it in a big way.
“I would be long Bitcoin, and neutral to skeptical of just about everything else at this point with a few possible exceptions,” Thiel said at the Economic Club of New York.
“There will be one online equivalent to gold, and the one you’d bet on would be the biggest.”
Thiel downplayed the usefulness of crypto as a replacement for paper money, its supposed purpose.
“I’m not talking about a new payments system. It’s like bars of gold in a vault that never move, and it’s a sort of hedge of sorts against the whole world going falling apart,” he said.
Along with Bitcoin, Thiel has decent hopes for other cryptos as well.
There’s a chance other digital currencies such as Ethereum could beat Bitcoin, and that others down the road may have better features, according to Thiel.
At the moment, however, Bitcoin’s size puts it over the top, he says.
Right now, Bitcoin boasts 42% of the total market capitalization among cryptocurrencies. Ethereum has around 19%.
Similar to gold, Thiel argues that Bitcoin could be the same in that it’s the biggest player in its asset class.
“Gold continues to be gold because it’s the main asset class,” Thiel said. “Maybe it could be replaced by silver but it doesn’t seem to be happening.”
Thiel’s investment group bought nearly $20 million of Bitcoin in January. While at the moment that doesn’t seem like the greatest investment, they clearly are betting on the long term.
Thiel believes that the public still highly underestimates cryptocurrency, though he clearly expressed caution as well.
“I’m not exactly sure whether I would encourage people to run out right now and buy these cryptocurrencies,” Thiel said.
“But the technology that people like to talk about is the blockchain technology,” he said.
“I’m somewhat skeptical about how well that translates into good investments. But the one use case of cryptocurrency of a store of value may actually have quite a bit of a way to go.”
Thiel doesn’t like how some analysts are pushing Bitcoin as a quick buck.
“There are all these elements that remind me of ’99-2000 that make me nervous. It’s people playing fast and loose with ICO rules just like the IPOs of the dot-com bubble,” Thiel said.
“You have sort of the crazy promoter-type people, where the people who exaggerate beat the people with a normal plan and then they get beaten by the people who exaggerate a lot. So there are a lot of very crazy, unhealthy dynamics.
“At the same time, it still strikes me as deeply contrarian.”
Thiel talks about Bitcoin in an interview a month ago:
The news of Thiel’s remarks have sparked conversation in the online crypto community.
Peter Thiel had three takeaways speaking at Economic Club in NYC today:
1. Never bet against Elon Musk
2. Money is bubble that never pops
3. Long Bitcoin in a big way
— Pomp (@APompliano) March 15, 2018
Billionaire Investor Peter Thiel doubles down on BTC, considering the digital coin to be a gold’s online equal.
— Ubcoin (@ubcoin) March 19, 2018