By Tobi Loba
Chamath Palihapitiya, the billionaire venture capitalist and chairman of spaceflight firm Virgin Galactic said he purchased 1 million BTC back in 2013, which was his first investment in Bitcoin.
He revealed this in a recent Unchained Podcast. He also warned that the continued success of Bitcoin (BTC) will spell global economic catastrophe, believing that Bitcoin remains the hedge during a financial crisis.
He said:
“I just think that if people have been hard-working, with their heads down, they should have an opportunity to make sure that they don’t get wiped out if the government itself just continues to make a string of bad decisions that then have rising consequences. And Bitcoin, to me, is the only thing that I’ve seen so far that is really fundamentally uncorrelated to that decision-making process and to that decision-making body. Because at the end of the day, any other asset class – equities, debt, real estate, commodities – they’re all tightly, tightly coupled to a legislative framework and an interconnectedness in the financial markets that brings together many of the governments that are sort of behaving this way.
And so it’s almost like a bet against the ruling class in some ways, and making sure that you have a small amount of insurance… Insurance is something that pays off 1,000 bucks to a buck. You want these massive, massive asymmetric payoffs because you want to be sure that a small amount of insurance can basically make you whole. And that’s why I think that you should just take 1% of your portfolio, put it in Bitcoin, never look at it… and hope that that 1% goes to zero.”
Palihapitiya also stated that the success of Bitcoin cannot rely on just the fact that it’s a good hedge against traditional assets, but the digital currency will ride on many bad decisions made by governments across the world.
“If your Bitcoin bet pays off, it will be cataclysmically destructive for the world. And that’ll have enormous consequences to many people we all know and care about who weren’t hedged in Bitcoin. And so you almost don’t want it to happen.”
Palihapitiya Speaks About 1 Million BTC He Bought In 2013
The billionaire venture capitalist believes the major path to the success of Bitcoin is the total financial failure globally, stating that there are other products in the industry that are more capable of virtual payments.
He further said that he bought 1 million BTC back in 2013 when the digital currency was trading at relatively $80.
“There’s a well-known person in the Bitcoin ecosystem. His name is Wences Casares. He was the one that introduced it to me in 2010, and we were actually going to Las Vegas for his 40th birthday. And that’s when he pitched me on it. And I remember landing three days later, and I called my family office and said, ‘Buy a million Bitcoin.’ That’s how I started. It was $80 or something at the time. And it just sounded kind of really interesting.
But then it took me a few years to really understand it. I didn’t totally understand all of the mechanics of it and, to be honest with you, I’ve forgotten most of the mechanics now. I studied it… I made an underwriting decision to buy and to never think about it again. And, by and large, I’ve never thought about it again.
I remember my family office flipped out when Bitcoin was $20,000 a coin, they were like, ‘Uhhh,’ and I was like ‘Guys, don’t tell me, I don’t wanna know. Just take it off the balance sheet, don’t ever look at it, keep it at the cost, and don’t get psychologically affected by this number.’”