Way Too Much Money in Crypto To Stop It Now: Billionaire Investor Chamath Palihapitiya

Last updated: Mar 30, 2023
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Billionaire venture capitalist Chamath Palihapitiya believes the crypto space has reached the point of no return, and that a ban on the industry is virtually impossible.

In a recent discussion on the All-In Podcast, Palihapitiya says that with the sheer amount of capital already invested in the crypto ecosystem, governments won't have a chance at regulating the space out of existence. According to the Social Capital CEO, recent statements by regulators like SEC chair Gary Gensler about the US having no plans to ban crypto were likely made to save face.

"I think that you can't wipe $3 trillion of value out of the world. So it's here to stay, and it's too institutionalized so there's just way too many organized pools of capital that are now speculating inside of this entire ecosystem...

When you have people in high finance really invested in this thing, and $3 trillion in value that'll go to $6 trillion and then go to $10 trillion, this can't go away. That's why I think Powell and Gensler had to say some version of that on the record which is 'we're not going to ban this stuff' because they know it's not possible..."

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Earlier this month, Palihapitiya said he believed that Bitcoin had all but replaced the gold market as an inflation hedge. He also named Ethereum and Solana as cryptos that would rise to prominence on the back of many clear use cases.

“Bitcoin, I think, has effectively replaced gold, and it will continue to do so and so that market cap is just going to grow. Then for the first time, I think we’re seeing the initial versions of the solution that we thought Bitcoin was supposed to be. Smart contracts, better savings accounts, better insurance, better credit scoring, and that’s all happening through this DeFi (decentralized finance) stuff that’s being built on Ethereum and Solana.”

The former engineer said that in an inflationary environment – which he believes we are in – crypto acts as an ideal non-correlated asset to hold.

“I’m very concerned about medium-term inflation and so in an inflationary environment, in my very simplistic view of the world, I want to own three things: hypergrowth, because hypergrowth can always outrun inflation...Then I want to own cash-generative assets, a great example is like a mining stock... And then I want to own non-correlated assets. Bitcoin, Solana, DESO (Decentralized Social), a lot of the DeFi protocols because it’s a great counter-intuitive hedge against all of this stuff.”

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