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Virgin Galactic Chairman: Bitcoin Can Help Evade Financial Crisis

Bitcoin keeps getting more endorsements almost on a daily basis. Chamath Palihapitiya, the chairman of spaceflight company Virgin Galactic, recently suggested that every investor should put 1% of their net worth in Bitcoin. The investment could act as a form of crisis insurance if other investments fail.

Palihapitiya was speaking on CNBC’s Squawk Box where he said Bitcoin makes a ‘fantastic hedge.’ It is perfect since all other financial instruments are correlated while the cryptocurrency is wholly uncorrelated. He commented:

“When you see the amount of leverage the financial industry is running, and you think about all these dislocations and all these exogenous things that are happening that you can’t predict, there’s a lot of risk to the downside, and it will be great that an average individual citizen, of any country in the world, has an uncorrelated hedge.”

But, the billionaire rejects the notion that economic woes arising from the coronavirus outbreak will result into a major bull trend for the crypto markets. In that context he stated:

“I don’t think when […] you wake up and see a coronavirus scare and the Dow down 2,000; you should not be going in and buying Bitcoin – that is an idiotic strategy.”

He believes that it is important to have an investment strategy to succeed while investing in the crypto and money markets.

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This week, the ‘Bitcoin is a safe haven’ narrative has taken a thorough beating with BTC losing almost 13% in the past 48 hours. It appears like Bitcoin is following the trend set by the stock markets due to fears over the effect of the coronavirus.

On the other hand, gold is doing well taking up its traditional role as a financial haven. It has gained significantly in recent weeks currently trading for $1,648.82 per ounce.

Amidst all the market turmoil and economic inconsistency, Palihapitiya suggests that investors should place some amount of their money into Bitcoin as ‘insurance’. He commented:

“I think a reasonable strategy is to say 1% of my net worth should be in something completely uncorrelated to the world and how the world works. You quietly over some period of time accumulate a position and then never look at it again and hope that that insurance under the mattress never has to come due. But, if it does, it will protect you.”

Palihapitiya has been a Bitcoin proponent for many years with Virgin Atlantic becoming one of the major brands to accept Bitcoin in 2013.

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