Billionaire Peter Thiel, the co-founder of Paypal, believes that bitcoin is akin to gold. According to an interview Thiel did with CNBC, he compared bitcoin to gold bars placed inside a “vault that never move”. He described the popular virtual currency as: “It’s sort of hedge of sorts against the whole world falling apart.” Thiel sees bitcoin as a “store of value” more than a currency that can be used for day-to-day transactions, adding that its cumbersomeness makes it difficult to become a “new payments system”.
Thiel’s purchase early this year of approximately $15 million to $20 million worth of bitcoin via his venture capital firm Founders Fund is evidence of his support of the popular digital currency. He highlights bitcoin more than other cryptocurrencies and promotes it as the largest digital currency by market capitalization. He also sees bitcoin as being able to maintain its current leading position. Thiel declared, “There will be one online equivalent to gold, and the one you’d bet on would be the biggest.”
However, Thiel was similarly unsparing in his view of the future of bitcoin when he declared there is approximately 50 to 80 percent possibility that the cryptocurrency will become worthless. But he also declared that there is 20 to 50 percent chance that it will move higher. He is also open to the likelihood that ethereum could eventually replace bitcoin or that future virtual currencies would possess better features. Still, Thiel maintains his unwavering support of bitcoin when he declared that many people seem to be “underestimating” its potential. Continuing his comparison of it to gold, he likens the digital currency as currently irreplaceable the way gold is now. He explained, “Gold continues to be gold because it’s the main asset class..Maybe it could be replaced by silver but it doesn’t seem to be happening.”