The billionaire venture capitalist is doubling down on BTC, likening the digital coin to gold’s online equal.
Thiel touts the No. 1 cryptocurrency for its size and its ability to compete with gold as a safe haven, saying at the Economic Club of New York:
“I would be long bitcoin, and neutral to skeptical of just about everything else at this point with a few possible exceptions. There will be one online equivalent to gold, and the one you’d bet on would be the biggest,” said Thiel.
But with the exception of a few digital coins, Thiel remains neutral on the rest of the cryptocurrency pack. He didn’t dismiss the possibility that bitcoin could be surpassed by Ethereum or other altcoins that prey on the leading cryptocurrency’s weaknesses, but bitcoin’s strength is in its size.
Bitcoin controls more than 40% of cryptocurrency market cap compared to almost one-fifth for Ethereum, as per Coin Market Cap data cited in CNBC.
Silver and Gold
The PayPal founder and Facebook’s maiden major investor was clear that the direction he sees bitcoin headed in is as a store of value, not payments, the latter of which he characterized as a “cumbersome” application.
“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.”
Similar to how Thiel believes in theory No. 2 Ethereum could overtake No. 1 bitcoin, it’s not likely to happen, just as silver has not managed to overtake leading asset class gold.
Thiel’s BTC Buying Spree
Meanwhile, Thiel’s bullish BTC prediction isn’t a slam dunk, with him placing the odds of bitcoin becoming worthless at between 50% and 80% compared to a 20% to 50% likelihood that the BTC price advances, falling short of providing any timeline for his theory.
“Probability weighted it’s good, and the question of how to time this I’m not going to try to do that precisely,” Thiel said.
But don’t let the percentages scare you, as Thiel’s venture capital firm Founders Fund has been scooping up BTC for the past six years. In fact, his firm has amassed between USD 15 million and USD 20 million in bitcoin during that time,” according to reports.
The timing of Thiel’s prediction for bitcoin as a hedge for Armageddon was furtuitous after just a few days ago the hatch on a cargo plane in Russia somehow opened and spilled three tons of physical gold bars worth a reported USD 378 million onto a runway in Russia. Perhaps the universe is trying to say something.