Peter Thiel, the co-founder of PayPal and Palantir Technologies believes the high price of bitcoin indicates that inflation has started shaking the financial network. He opined that investors should not rush to buy BTC when the dollar 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 issues, which it brought, became a reason for many governments to initiate controversial financial policies aiming to reduce the harmful 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 the rising inflation, Thiel also touched upon 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” purchase the asset at these levels:
“You know, $60,000 Bitcoin, I’m not sure that one should aggressively buy. But surely what it is telling us is that we are having a crisis moment.”
Last month, when bitcoin reached an ATH, the billionaire shared a relatively similar stance on the matter. Thiel said he would not be surprised if the primary cryptocurrency continues its rally in the future. Nonetheless, the event revealed that central banks are not functioning well:
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 Vs. Inflation
Many traditional investors have also commented on the rising inflation rate in the US, while also voicing their concerns about the possibility of long-term hyperinflation.
But crypto enthusiasts don’t seem to care much about this topic as they see Bitcoin as a tool to hedge against inflation. Despite the volatility of the asset class, investors are still choosing other investment vehicles, not just retail investors, during this difficult time.
Despite warning individuals that bitcoin’s current price is an obstacle for them to invest in, the leading digital asset is seen by many as a hedge against inflation.
One key supporter of this is Jack Dorsey. With inflation happening already, Twitter founder and Bitcoin supporter Jack Dorsey believes inflation will continue to grow rapidly, leading to hyperinflation not only in the US but in other parts of the world as well.
The Square CEO shared his thoughts on the matter on Twitter, stating that hyperinflation is going to change everything.