Virgin Galactic Chairman Recommends Keeping 1% of Assets in Bitcoin

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by Teuta Franjkovic · 4 min read
Virgin Galactic Chairman Recommends Keeping 1% of Assets in Bitcoin
Photo: Wikimedia Commons

Fear, uncertainty, and doubt are causing the global community at large to panic over the potential implications of the coronavirus. The chairman of Virgin Galactic Chamath Palihapitiya believes that in the current situation it would be sensible to keep 1% of assets in Bitcoin.

We were already writing numerous times how Bitcoin (together with other cryptocurrencies) is a good asset to have when things are going rough. Nowadays, we are witnessing, not just geopolitical tensions between the Middle East and the United States but also the fast-spreading epidemic. Coronavirus is a word on everyone’s lips from the beginning of this year.

GDPs of states are in the danger to fall rapidly, earnings of big companies already had seen results of it in the last quarter and the question is – what can we do? Or to simplify – how Bitcoin could help?

The billionaire chairman of spaceflight company Virgin Galactic Holdings Inc (NYSE: SPCE) Chamath Palihapitiya recommends that everybody hold Bitcoin as a sort of crisis insurance.

Speaking on CNBC’s Squawk Box, Palihapitiya said he thinks that “everybody should probably have 1% of their assets in Bitcoin.”

Bitcoin Contains Fantastic Hedge

Palihapitiya said that Bitcoin contains a “fantastic hedge,” because, almost every other financial instrument is correlated. On the other hand, Bitcoin is “fundamentally uncorrelated.”

He further explains:

“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.”

Even though he agrees that all things can impact the overall economy, the former Facebook Inc (NASDAQ: FB) executive rejects the theory that where only fears from coronavirus will impact the Bitcoin boost.

He said:

“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.”

However, let’s just stop here a bit shall we? We agree that someone who was a traditional investor won’t buy Bitcoin even if the floor was lava. Still, we believe that investors who are in crypto from its beginning could consider stocking up its crypto stash – just in case. And, to be honest, we bet that those who bought Bitcoin and not, for example, villa in North of Italy – are now pretty much happier with their investment.

Using Bitcoin as Insurance

We already mentioned the phrase that ‘Bitcoin is a safe haven’. However, the same one may lead us to re-question it after this week BTC fell almost 13% in only 36 hours mirroring the stock markets due to fears of the coronavirus. On the other hand, gold has performed well in its traditional role as a safe haven, gaining 0.5% in recent days to trade for $1,648.82 per ounce. Yes, yes, we hear you, Peter Schiff.

Palihapitiya further advises that a better approach than trying to profit off short term market trends is for investors to put a small percentage of their net worth into Bitcoin as “insurance”.

He says:

“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 just 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.”

We’ll guess that’s not a bad strategy after all. Especially if your worth is similar to Palihapitiya’s. He is a longtime Bitcoin supporter. Virgin Galactic began accepting Bitcoin for its $250,000 spaceflights during November 2013. It then became one of the most high-profile companies to accept BTC at the time.

Bitcoin News, Business News, Cryptocurrency news, Investors News, News
Teuta Franjkovic
Author Teuta Franjkovic

Experienced creative professional focusing on financial and political analysis, editing daily newspapers and news sites, economical and political journalism, consulting, PR and Marketing. Teuta’s passion is to create new opportunities and bring people together.

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