The global banking system has been in a state of crisis in recent weeks, causing many to question if there is a viable alternative to the current system. In a recent podcast, billionaire investor and early Bitcoin adopter Chamath Palihapitiya shared his thoughts on the matter.
Palihapitiya opined that the low number of Bitcoin users worldwide suggests that most people do not view the leading crypto as the ideal replacement for the banking system.
Billionaire Venture Capitalist Expresses Doubts About Bitcoin
Despite being an early Bitcoin adopter, Palihapitiya expressed his doubts about Bitcoin being a feasible substitute for the current financial system. The early Bitcoin investor noted that the number of users currently using BTC worldwide is relatively small compared to those using the traditional banking system.
Hence, he concludes that many people need to consider it a legitimate alternative. Palihapitiya said, suppose the number of non-zero Bitcoin wallet holders globally is 100 million (that’s being generous), but it is still only a tiny portion of the seven billion people on the planet.
Those who talk about many unbanked in the U.S. and the world are correct. However, Bitcoin promoters often exaggerate this number and the bank crisis to their benefit.”
Palihapitiya suggests that if Bitcoin was the best solution for reducing the U.S. dollar and banking system dominance, its price should have risen to a far greater degree than its current price since Silicon Valley Bank (SVB)’s collapse earlier this month.
It is worth noting that between March 10 (when SVB) and today, BTC’s price has risen from $19,662 to the current value of $27,044. The venture capitalist said, “why isn’t Bitcoin worth at least $35,000 by now? It is currently just above $28,000, which is not much of an increase.”
Then, he added that the likely reason is that most people investing in Bitcoin are not using it to hedge against their existing fiat currency holdings. Instead, they are taking advantage of retail investors and trading it like a stock.
He also said that despite the recent negative news surrounding the traditional financial system, the price of the leading digital asset had not risen astronomically. The billionaire investor opined that the reason is that the reason BTC’s price isn’t rising at a fast rate is that it is still not widely accessible, accepted, or used.
Nevertheless, Palihapitiya argued that the digital asset is still valuable as he was one of its proponents in 2011 and 2012. Despite Palihapitiya’s comments, he reiterates his belief that Bitcoin and other cryptocurrencies can co-exist with the traditional banking system.
But concluding that BTC is better is unrealistic. Despite being a volatile asset, some still view it as a better substitute for the global banking system.
The bank crisis in the U.S., and the subsequent surge in demand for digital banking services, have sparked a renewed interest in Bitcoin and other cryptocurrencies. However, it’s important to note that there is still a great deal of uncertainty surrounding the future of the leading cryptocurrency.
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