Peter Thiel – co-founder of PayPal and Palantir Technologies – believes that the high price of bitcoin indicates that inflation has started to rock the financial network. He opined that investors should not rush to buy BTC when the USD value for a single token is more than $60,000.
The Fed is in a state of “epistemic closure”
The coronavirus pandemic and the catastrophic economic problems it has brought with it have become a reason for many governments to initiate controversial financial policies aimed at reducing adverse impacts. In the USA – the most powerful economy – the Federal Reserve started printing vast amounts of dollars. A move, highly criticized by many experts, including the tech billionaire Peter Thiel.
According to him, the Fed is in a state of “epistemic closure”. Or said in other words, the central bank is close-minded and does not realize its guilt for triggering rising inflation with its actions.
While talking about rising inflation, Thiel also touched on bitcoin. He opined that its current price of over $60,000 per coin is a clear signal that the economy faces enhanced inflation. However, investors should not “aggressively” buy the asset at these levels:
“You know, $60,000 Bitcoin, I’m not sure that one should aggressively buy. But what that tells us is that we are in a time of crisis.”
Last month, when bitcoin reached an ATH, the billionaire shared a relatively similar stance on the matter. Thiel said he wouldn’t be surprised if the main cryptocurrency continues its rally in the future. Nonetheless, the event revealed that central banks are not functioning well:
“Will it go up? May be. But that surely tells us that we are at a time of complete bankruptcy for central banks. “
The annual inflation rate in the United States for the last 12 months is 5.4%, which is a significantly higher number than the 1.4% and 2.3%, respectively, in 2019 and 2020.
Bitcoin versus. Inflation
Although he warned individuals that the current price of bitcoin is a barrier for them to invest, the primary digital asset is actually seen by many as an alternative to gold in terms of a store of value.
A keen proponent of that idea is Paul Tudor Jones III. In fact, the billionaire hedge fund manager has placed bitcoin as the best version of the precious metal, which is why he has allocated up to 5% of his portfolio to cryptocurrency.
“I do think we’re moving into an increasingly digitized world. Clearly, there’s a place for crypto, and clearly, it’s winning the race against gold at the moment, right?”
Barry Sternlicht is another defender of this concept. Not long ago, the 60-year-old billionaire described BTC as a financial tool that can help against the mass printing of fiat currencies. As such, he has personally invested in it.
