Bitcoin Eyes $9K as Billionaire VC Sees Dollar ‘Deflationary Spiral’

Bitcoin (BTC) was fighting for $9,000 support on May 12 as more public praise surfaced amid continued dismal conditions for the world economy.

Cryptocurrency market daily overview. Source: Coin360

BTC price unmoved by halving

Data from Cointelegraph Markets and CoinMarketCap showed BTC/USD closing in on the $9,000 mark on Tuesday, having briefly clipped it the day before.

Bitcoin 1-day chart. Source: CoinMarketCap

After its third block subsidy halving completed, excitement has grown over the next price move for Bitcoin, which lost $1,200 in the run-up to the event at the weekend.

Palihapitiya warns on “massive deflationary spiral”

Earlier on Tuesday, the chairman of Virgin Galactic called Bitcoin the most “uncorrelated” asset to fiat markets as the U.S. dollar faces a “massive deflationary spiral.”

Speaking to CNBC’s Squawk Box, Chamath Palihapitiya did not mince his words when it came to the biggest cryptocurrency’s superiority.

“When we started to believe in the long-term value of Bitcoin, it was as a store of value and it was that schmuck insurance that you kept under the mattress,” he told the network.

CNBC referenced Monday’s interview with investment giant Paul Tudor Jones, who revealed on air that he now kept between 1% and 2% of his total assets in BTC.

“The reason is because now we are in this massive deflationary spiral, and you have to figure out how you’re going to protect yourself,” Palihapitiya continued. 

And so however you think about it — from classic economic theory or the schmuck insurance or you’re somewhat skeptical of the established government masses — it is important that we have a hedge, a non-correlated hedge. And I still struggle to find anything that is as uncorrelated to anything else and to everything else than Bitcoin.