Chamath Palihapitiya, CEO of the venture capital company Social Capital, believes that bitcoin may well exceed $1 million, but it is unlikely to replace the us dollar.
According to Palihapitiya, due to their volatility, cryptocurrencies will not be able to replace Fiat money, at least in the near future. Because of price fluctuations, they can provide the same reliable guarantees as Fiat currencies, especially at the time of a coronavirus pandemic.
“If you are talking about cryptocurrencies replacing Fiat money, you just need to look at the volatility of the us dollar. You can’t replace the dollar with an asset that has an order of magnitude more volatility. It doesn’t work that way,” Palihapitiya said.
At the same time, he is sure that the rate of the first cryptocurrency will grow, especially against the background of the fact that the us Federal reserve plans to print $6 trillion. This makes more and more new investors look towards bitcoin and other cryptocurrencies, independent of the decisions of Central banks.
According to Palihapitiya, in the distant future, bitcoin may well become a global reserve currency, especially if Central banks continue to adhere to the same policy and will print money in any economic crisis.
Recall that in the middle of last year, Chamat Palihapitiya said that bitcoin is the best tool for hedging risks associated with the traditional financial system.