The founder of PayPal Inc. believes that bitcoin could become less prominent in our daily investing and transacting. Peter Thiel, the billionaire entrepreneur and venture capitalist, expressed his belief that there is a 50% to 80% chance that bitcoin’s price will decline to a point at which the cryptocurrency, currently the largest in the world by market cap, will be effectively useless. The overseer of Founders Fund brought in up to $20 million of bitcoin to its portfolio back in January, prompting a 9% rise in the price of BTC within just a day of the purchase.
More Likely to Fail
Thiel believes that bitcoin is significantly more likely to fail than it is to continue to climb higher in price. Compared with a chance of up to 80% that the digital currency tanks in value, Thiel sees a 20% to 50% chance that the digital currency could go higher in price in the near future.
Although Thiel indicated his belief that it’s possible, if somewhat unlikely, that bitcoin will continue to climb in price, he’s betting against the leading digital currency. In fact, he said that he’s “not sure [he] would encourage people to run out right now and buy these cryptocurrencies” in a recent interview.
Other Cryptocurrencies Could Surpass
Though Thiel has long been an enthusiastic supporter of bitcoin, he nonetheless believes that it’s likely other digital currencies like ethereum will surpass bitcoin in value. If that does take place, Thiel believes that bitcoin could become a long-term store of value rather than a go-to asset for daily transactions. In this way, the billionaire sees bitcoin a bit like an online version of gold or another precious metal.
Recent statements represents a shift in Thiel’s earlier thinking. He previously stated that he “would be long bitcoin, and neutral to skeptical of just about everything else at this point with a few possible exceptions … there will be one online equivalent to gold, and the one you’d bet on would be the biggest.” For now, BTC remains the largest digital currency in the world, but it’s unclear whether this will remain the case going forward.