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SPAC king Palihapitiya exits Tesla, bullish on Solana, says Bitcoin has replaced gold

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SPAC king Palihapitiya exits Tesla, bullish on Solana, says Bitcoin has replaced gold

Famous venture capitalist Chamath Palihapitiya shared his latest views on the investment market in an interview. Formerly bullish on Tesla, he has since liquidated his position. Regarding the cryptocurrency space, he believes that Bitcoin has effectively replaced gold, and its market value will continue to catch up. He also outlined his three strategies for dealing with inflation.

Liquidating Tesla Holdings

Social Capital CEO Chamath Palihapitiya revealed in an interview with CNBC that he has been gradually liquidating his Tesla holdings over the past year. While he remains optimistic about Tesla, he needed to free up funds for other investments:

I don't have unlimited funds, and I won't be raising more. When I have new ideas or targets, I need to free up funds from elsewhere. Although there are other ways to multiply funds, taking on that level of risk makes me uncomfortable.

Three Hedge Assets

Palihapitiya presented three ways to hedge against inflation:

  • Investing in high-growth companies
  • Companies that generate cash flow: mining stocks
  • Low-correlation assets: Bitcoin, Solana

He expressed significant concerns about mid-term inflation and in his view, the returns from investing in high-growth companies that grow by 50% annually will always outpace inflation. As for low-correlation assets, Bitcoin, Solana, DeSo, and many DeFi protocols are considered good hedging targets.

DeSo is a social blockchain project launched by BitClout founder Nader Al-Naji, named The Decentralized Social Blockchain. Social Capital, under Palihapitiya, is one of the $200 million investors in this project.

Bitcoin Has Surpassed Gold

Having previously stated to CNBC that Bitcoin will reach $200,000 or higher, the host asked for his opinion again, to which he responded more conservatively:

It's hard to give a price prediction, but I can confidently say that Bitcoin has actually replaced gold. It will continue in this direction, so its market value will keep growing. Since the emergence of Bitcoin, we have also seen a plethora of applications in the so-called DeFi space built on blockchains like Ethereum, Solana, and others.

Earlier this year, it was reported that Palihapitiya heavily invested in NFTs, but he told the host that he prefers not to discuss his crypto investment portfolio beyond Bitcoin.

The current market value of gold is close to $11 trillion, while Bitcoin is around $811.1 billion, accounting for only 7.3% of the gold market value. Hedge fund manager Paul Jones had a similar perspective last June, believing that Bitcoin's market value was only 1/60th of gold's, suggesting that the price seemed undervalued by the market. Since then, Bitcoin has more than quadrupled in value, but there is still a significant gap compared to the market value of gold.