Bitcoin

This billionaire bought 1 million bitcoins in 2013 – Why he never doubted his crazy wager

He’s not afraid of anything

– Chamath Palihapitiya, CEO of the Social Capital investment fund, is known in the cryptosphere to be very optimistic and bull on bitcoin (a bit too much maybe?). This enthusiasm is akin to absolute faith in the king of cryptos, since he claims to have HODL without fear since 2013.
The man who counts bitcoins to fall asleep

Background: Chamath Palihapitiya recently said that owning Bitcoin helps him sleep well at night.

In an interview on the Unchained Podcast, the CEO went even further in his fervor for Satoshi Nakamoto’s invention:

„(…) Bitcoin is like a bet against the ruling class in a way, to make sure that you have a small amount as insurance (…). An insurance that can bring in $1,000 for one dollar [invested]. You want these massive asymmetrical gains, because you want to make sure that this small amount of insurance can in theory put you back on your feet. And that’s why I think you should devote just 1% of your investment portfolio to Bitcoin…. »

However, keeping Bitcoins for many years is not easy, so much the volatility of prices plays with the emotion of HODLers.
1 million BTC bought 80 dollars each … no resale

Speaking of HODLer, Chamath Palihapitiya is a kind of „extremist“, so much his devotion is palpable. Thus, in 2013, after Wences Casares, the CEO of Xapo, introduced him to Bitcoin, he explains :

„(…) I called my family office to say: ‚Buy a million Bitcoin‘. That’s how I started. The BTC was $80 or something like that at the time. And it sounded very interesting to me. (…) I made the decision to buy and never think about it again. And overall, I never thought about it again (…). I remember my family office went into crisis when Bitcoin was trading at $20,000 [in December 2017] (…). I said, ‚Guys, don’t tell me! I don’t want to know anything. Take them off the balance sheet! Never look at them! Keep them and don’t be psychologically affected by this figure! »

Thus, even at the peak of the bubble of the previous bitcoin bull market, Chamath Palihapitiya did not sell anything. One can understand the stress of his family office managers when the $80 million invested in 2013 turned into $20 billion in 2017. Enough to have a little drop of sweat on your forehead!

But whether yesterday or today – with a current value of 11.5 billion dollars for his loot – Chamath Palihapitiya does not wish to resell. Indeed, he prefers to keep his Bitcoins as insurance. Just in case the economic system, which is in a bad way, would end up collapsing completely.

Obviously, this strategy of „HODLer of extremes“ is not very recommendable, not even with a good heart. But Chamath Palihapitiya’s strategy has the merit of being consistent with his vision on Bitcoin: a perfect refuge value in the event of a major global economic crisis.