Chamath Palihapitiya, former Facebook executive and Chairman of Virgin Galactic, says that everyone should have 1% of their net worth invested in Bitcoin. He cited Bitcoin’s quality as a totally uncorrelated asset class, and the overuse of leverage in traditional finance as reasons to hedge with BTC.
Bitcoin is an asset class that stands alone
Chamath Palihapitiya has been saying since 2013, that he believes that every investor, institutional or retail should make space in their portfolio for the #1 cryptocurrency.
Everyone should have a 1% allocation of their assets in Bitcoin.
The seasoned VC investor pointed out that Bitcoin is a new kind of asset class that is uncorrelated from traditional commodities, stocks and other investment assets. He went on to say that investing in Bitcoin is valuable because it is uncorrelated to other asset classes. He did point out however, that with BTC’s volatility, using it as a safe haven could be disastrous.
…these are not event driven strategies, when you see a Coronavirus scare you should not be buying Bitcoin, that is an idiotic strategy.
Palihapitiya says that an allocation in Bitcoin should be seen as insurance for a rainy day, and hopefully you’ll never need to use it. You should invest 1% and never look at it again until you need it for a crisis.
Every investor, including retail investors should view an investment in Bitcoin as a sort of crisis insurance, which they keep under the mattress and hope they never need. But if you do, then it will protect you, because it will have a value of hundreds of thousands or millions of dollars per coin.
Palihapitiya also added that every other financial investment product is correlated to each other.