Bitcoin
Bitcoin
The bitcoin price has soared back to its all-time high of around $70,000 per bitcoin, recovering from a 2022 crash that Goldman Sachs’ crypto lead thinks could signal a bitcoin price “turning point.”
Now, after U.S. Treasury secretary Janet Yellen issued a serious warning over the swelling $34 trillion U.S. debt pile, former billionaire and All In podcast “bestie” Chamath Palihapitiya has predicted bitcoin could “completely replace gold” as countries adopt it–potentially pushing it’s market capitalization toward gold’s $15.7 trillion.
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Fears have emerged that U.S. dollar debasement could lead to the currency’s collapse as the world’s … [+]
“There’s an increasing body of countries that will become dual-currency,” Palihapitiya said on the podcast he hosts along with fellow investors David Friedburg, Jason Calacanis and David Sacks.
“They will look at their local currency and they will look at bitcoin. And they will say both of these two things are needed. The first for when they’re transacting on a daily basis for goods and services and the second when you need to buy a permanent asset that needs to have residual value, they’ll buy bitcoin.”
El Salvador made history when it adopted bitcoin as its official currency alongside the U.S. dollar in 2021 with mixed success, sparking debate whether other countries would follow suit though no major countries have yet.
However, Palihapitiya added he thinks that “there are a lot of countries that will never look at bitcoin credibly even if they support it,” with the U.S. perhaps “one of those.”
Palihapitiya pointed to the historical bitcoin price charts that show huge increases in the bitcoin price following so-called bitcoin halvings that reduce the supply of new bitcoin issued to miners that maintain the network. The latest bitcoin halving, its fourth which cut the daily supply of new bitcoin from around 900 to 450, happened in April.
“If you apply these averages, they’re by no means [bitcoin price] predictions, they’re just guesses, you start to see what could happen if you take the average of the last few cycles,” Palihapitiya said. “The average of cycle two and three is some really meaningful appreciation.”
Historical bitcoin price data shows that after previous bitcoin halvings, the bitcoin price peaked around 18 months after the supply cut.
“If this thing gets to these levels of appreciation, it’s going to completely replace gold and become something that has transactional utility for hard assets,” Palihapitiya said. “If you marry that with this fear that some folks have about dollar debasement, you start to see some interesting opportunities.”
Earlier this year, Bank of America analysts warned the U.S. debt load is about to ramp up to add $1 trillion every 100 days—fueling a bitcoin price surge.
“The U.S. national debt is rising by $1 trillion every 100 days,” Michael Hartnett, chief strategist of Bank of America, wrote in a note to clients seen by CNBC, adding it’s “little wonder ‘debt debasement’ trades closing in on all-time highs, i.e. gold [at] $2077/oz [and] bitcoin [at] $67,734.”
Hartnett predicted the newly created spot bitcoin ETFs that have taken Wall Street by storm over the last month are on course for a “blowout year,” in part because of the collapse of the U.S. dollar.
The latest halving came hot on the heels of the landmark approval by the U.S. Securities and Exchange Commission (SEC), led by chair Gary Gensler, of a fleet of spot bitcoin ETFs following a long legal campaign by crypto asset manager Grayscale.
“We’ve commercialized bitcoin,” Palihapitiya said. “My big prediction for 2024 is that these ETFs will allow bitcoin to cross the chasm and have its central, key moment.”
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The bitcoin price has surged over the last year, pushed higher by Wall Street’s arrival via the spot … [+]
Meanwhile, bitcoin and crypto companies have emerged as a powerful lobby group in this year’s U.S. election, spending huge amounts on pro-crypto candidates and winning around both former president Donald Trump, the Republican front runner, and president Joe Biden, whose reelection campaign has reportedly begun reaching out to crypto executives.
“I think it’s really interesting how the crypto community is getting organized into a lobby to advocate for its interests,” Palihapitiya’s cohost David Sacks said, adding Gensler and influential Democrat senator Elizabeth Warren have been on “a crusade” against crypto to “make it illegal or drive it offshore.”
“Crypto people have had a political awakening and realized they have to get involved in the political system as a matter of self defense,” Sacks said.
“The reason [young people] are attracted to crypto is that it isn’t controlled by the government,” added Calacanis, predicting crypto voters could move the needle on election night by up to five basis points.