PayPal co-founder Peter Thiel is betting on cryptocurrency bitcoin; will become the ‘online equivalent to gold’

PayPal co-founder, Peter Thiel, is once again betting on bitcoin because he believes the cryptocurrency will one day become “the biggest” of the cryptocurrencies. Speaking at the recent event hosted by the Economic Club of New York last Thursday, Thiel said, “I would bet on bitcoin as the online equivalent of gold.” Back in early January, Wall Street Journal reported that Founders Fund, a company run by Thiel, bought about $15 million to $20 million of dollars in bitcoin, citing sources familiar with the matter. The report of Peter Thiel’s bet on Bitcoin sends the price of the cryptocurrency higher on Monday. Bitcoin rose 9 percent in the 24 hours after the report.

“Probability weighted it’s good, and the question of how to time this I’m not going to try to do that precisely,” Thiel said. “I would be long bitcoin, and neutral to skeptical of just about everything else at this point with a few possible exceptions.”  On a more cautionary note,  the Paypal co-founder scored a 50 to 80 percent chance that bitcoin ends up being worthless, and gave a 20 to 50 percent chance that it ends up moving higher.

“I’m not exactly sure whether I would encourage people to run out right now and buy these cryptocurrencies,” Thiel said at a recent event hosted by the Economic Club of New York. “But, the technology that people like to talk about is the blockchain technology. I’m somewhat skeptical about how well that translates into good investments. But the one use case of cryptocurrency of a store of value may actually have quite a bit of a way to go.”

Bitcoin, like gold, can be used as a hedge to the “whole world falling apart,” he said. “The question about something like bitcoin is whether it can become a new store of value. And, I think the thing it would replace is something like gold,” Thiel said. “We’re not talking about a new payments system. It’s too cumbersome to use for payments for day-to-day transactions, but the analogy is it’s like bars of gold in a vault that never moves.”

He added that bitcoin is “bubble-like,” but that doesn’t rebut the use case of bitcoin as a store of value.

“There are all these elements that remind me of 99/2000 that make me nervous. It’s people playing fast and loose with ICO rules just like the IPOs of the dot-com bubble. You have sort of the crazy promoter-type people, where the people who exaggerate beat the people with a normal plan and then they get beaten by the people who exaggerate a lot. So there are a lot of very crazy, unhealthy dynamics,” Thiel said. “At the same time, it still strikes me as deeply contrarian.”

You can watch the entire video below.