Facebook board member and PayPal co-founder Peter Thiel recently spoke to the press about the cryptocurrency space. The billionaire revealed that he is betting on bitcoin because one cryptocurrency may one day become the “online equivalent of gold,” and bitcoin’s size puts it in the lead.
During the conversation at the Economic Club of New York, Thiel backed the idea of bitcoin becoming a store of value and not a go-to currency used to process daily transactions. To him, the cryptocurrency resembles “bars of gold in a vault that never moves.” This represents a “sort of hedge” against the whole world crumbling, and not a new payment system.
He theorized that there is a 50 to 80 percent chance that bitcoin will have no value, and a 20 to 50 percent chance it will move up higher. Taking this into account, he stated:
“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.”
The billionaire dismissed the idea of bitcoin being a bubble, stating that the objections most people have against bitcoin are the same most people would’ve had against gold. He added that “money is a bubble that never pops.”
Thiel didn’t try to time bitcoin’s future ups and downs. He did, however, note that there’s a chance other cryptocurrencies like ethereum end up beating it down the road. Others, with better features, could emerge, but bitcoin’s size is its current advantage.
At press time, bitcoin currently holds roughly 42.7 percent of the total market capitalization of cryptocurrencies, while Ethereum comes in second place with about 18 percent. Thiel said:
“Gold continues to be gold because it’s the main asset class. Maybe it could be replaced by silver but it doesn’t seem to be happening.”
Betting on bitcoin, not other cryptos
While Thiel is clearly bullish on bitcoin and, potentially, Ethereum, he noted that other cryptocurrencies might not be good investments. Per his words, he wouldn’t encourage people to venture into investing in most cryptos.
As covered by Core Media, Peter Thiel’s Founders Fund invested between $15 and $20 million in bitcoin back in January, which at the time helped the cryptocurrency’s price recover from a small dip.