On Wednesday (February 26), venture capitalist Chamath Palihapitiya, who is the founder and CEO of investment firm Social Capital, as well as Chairman of spaceflight company Virgin Galactic, gave an interview during which he gave his latest thoughts on Bitcoin.
Palihapitiya's comments came during an interview on "Squawk Box", CNBC's pre-market morning news and talk program.
Toward the interview of the market, anchor Joe Kernen started asking Palihapitiya about crypto; more specifically, he wanted to know if crypto would ever become a means of payment.
"I would really like Bloomberg to take this article that I wrote for them in 2013 out of their paywall. Basically, you know, my view at the time, which I held since... is that everybody should probably have one percent of their assets in Bitcoin specifically.
"I still believe that today, and I think it is just a fantastic hedge.
"If you go back to the conversation this morning, when you see the amount of leverage the financial industry is running and you think about all these dislocations and all these exogenous things that are happening that you can't predict, there's a lot of risk to the downside, and it would be great that an average individual citizen of any country in the world has an uncorrelated hedge.
"And I've said this repeatedly at nauseum on the show: every financial instrument is correlated... except Bitcoin."
Kernen then reminded Palihapitiya that Warren Buffett had said earlier this week that Bitcoin has zero intrinsic value.
Palihapitiya responded by saying:
"I think he's an exceptional person. I've learned an enormous amount both from afar and the few interactions I've had with him. He is completely wrong and outdated on this."
Co-anchor Andrew Ross Sorkin then wanted to know why the price of Bitcoin had not gone up during the current COVID-19 crisis if Bitcoin is such a good hedge.
"I think that you have to look more at volumes. These are not necessarily event driven strategies...
"... when you wake up and you see a coronavirus scare and the Dow down 2,000, you should not be going in and buying Bitcoin -- that is an idiotic strategy.
"I think a reasonable strategy is to say one percent of my net worth should be in something that is completely uncorrelated to the world and how the world works.
"You quietly and over...time, accumulate a position, and then you just never look at it again, and hope that insurance under the mattress never has to come due, but if it does, it will protect you because then that thing will be hundreds of thousands or millions of dollars a coin."