Peter Thiel, the founder of Paypal, a venture capitalist and a godfather to some sorts for Facebook, in an interview with the CNBC has spoken about his views of the world’s largest cryptoasset Bitcoin. According to him, he is betting on Bitcoin because it is the biggest of them all. “I would be long bitcoin, and neutral to skeptical of just about everything else at this point with a few possible exceptions,” Thiel says.
However, he has scored a 50 to 80 percent chance that Bitcoin ends up being worthless. Also a 20 to 50 percent chance that it’s values goes even higher.
Thiel has backed the idea that bitcoin could become a long-term storage asset rather than being a go-to asset. He believes that it is the online equivalent to gold. He also revealed that he does not believe in an entirely new payments system as according to him, Bitcoin does not qualify for such use. But for him, it is a hedge of sorts that remains while the whole financial system around the world is falling apart.
Bitcoin has been working fine by dominating around 42 percent of the market capitalisation, followed by Ethereum with just 19 percent. On the notion of other cryptoassets beating Bitcoin in price, Thiel addressed the possibility of cryptos like Ethereum beating Bitcoin. “But, Bitcoin has a much greater appeal in its size. After all, gold continues to be gold as its the main asset class. Maybe it would be beaten by silver but it doesn’t look like happening.”
Founders fund which is run by Thiel, bought $15 million to $20 million of cryptoasset in Bitcoin, which led to Bitcoin rising 9 percent inside 24 hrs of the purchase, earlier this January. Nonetheless, he still doesn’t encourage people to run out right away and buy cryptoassets. Yet, his optimism is restricted only to Bitcoin, not to all crypto-assets.
In October 2016, at the Future Investment Initiative in Riyadh, Saudi Arabia, Thiel said he thinks people are underestimating the potential which Bitcoin holds in the financial market. He has been a long time supporter of Bitcoin, and believes in the speculation of Bitcoin become the digital-gold-safe haven.
With a monster investment and the optimism that Peter Thiel has shown in Bitcoin, it is clear that he is a big fan of the cryptoasset and does see the benefits of investment. He said that Bitcoin is based on the “security of math” which makes it very hard to hack. Hence, it becomes harder to mine than gold which somehow increases its constrained nature.
Although Bitcoin has faced criticism, statements from investors of the stature of Peter Thiel in favour of Bitcoin do represent the high gain opportunities around it. His statements of Bitcoin being the digital gold have surfaced the internet like a storm and inspired many investors to indulge themselves in the mainstream and liquidity of Bitcoin.