Peter Thiel, tech billionaire and tech billionaire, said bitcoin’s sky high price is a sign of a ‘crisis’ in the economy due to inflation. Inflation has risen to a 13 year high in the US.
According to Bloomberg, he stated that $60,000 worth of bitcoin was too much for him and that he wasn’t sure if he should buy aggressively. “But surely, it’s telling us that we’re in a crisis moment.”
Thiel stated that the US Federal Reserve believed it could launch massive stimulus without driving up inflation. However, it isn’t taking the issue seriously. Thiel said that he wishes he had purchased more bitcoin and added that he believes inflation is here to stay.
Bitcoin enthusiasts argue that it is “digital gold” – a rare asset that will retain its value even during high inflation.
Bitcoin reached a record high above $66,000 October due to investors’ concerns over sharp price increases across the globe.
The US consumer price index inflation hovered around 5.4% in September, a record high for the year. This was due to an economic rebound from coronavirus that pushed up food prices and energy prices.
JPMorgan stated that in late October, it appeared as though investors were buying into digital gold. The bank’s analysts stated in a note that they believe bitcoin is a better inflation hedge than gold.
Many institutional investors remain skeptical about the inflation hedge argument. They believe bitcoin’s volatility makes it too risky to be added to portfolios.
Bloomberg reported that Thiel stated that the Fed, which has said for years it expects price increases to fade, is being too close-minded about inflation, and failing to acknowledge the problem.
This billionaire was among the first to invest in Facebook, and is also a co-founder at PayPal and Palantir.
He supports cryptocurrencies and has supported companies such as Bitpanda, an European digital asset exchange.