1 Top Cryptocurrency to Buy Before It Rises 1,600% According to Chamath Palihapitiya

Chamath Palihapitiya, the billionaire co-founder of venture capital firm Social Capital, thinks so Bitcoinhis (BTC 2.16%) the price will reach $500,000 by the end of 2025. That’s a high price target, but it’s not too surprising considering that Palihapitiya previously predicted that the price of Bitcoin could reach $1 million in the future.

Bitcoin is trading at about $58,000, so it would need to rise about 760% to reach $500,000 and more than 1,600% to reach $1 million. At $1 million, Bitcoin’s market cap would exceed $21 trillion, eclipsing physical gold’s current market cap of $17 trillion. It would also make Bitcoin more valuable than all of the Magnificent Seven companies combined.

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Does that optimistic prediction make any sense? Let’s review Palihapitiya’s thesis and the other catalysts to see if Bitcoin can become the world’s most valuable asset.

How much Bitcoin does Chamath Palihapitiya own?

In 2011, Palihapitiya said he had previously bought 100,000 Bitcoins at an average price of less than $100. In 2013, he said he still had $5 million in Bitcoin and would be willing to invest another $10 to $15 million in the cryptocurrency.

But in a 2021 interview, Palihapitiya said he spent 2,739 of those Bitcoins ($1.6 million at the time) on an empty lot near Lake Tahoe in 2014. It was a pretty bad deal because those coins would be worth $159. millions today.

In a 2020 conference call, Palihapitiya said Social Capital bought Bitcoin throughout 2013 while it was still trading between $13 and $1,200. However, he has never disclosed exactly how much Bitcoin he or his firm owns.

Palihapitiya’s Case for Bitcoin

Palihapitiya has remained bullish on Bitcoin in recent years. In early 2021, he said that its price will reach $200,000 in the next five to 10 years. Later that year, he claimed that Bitcoin had “effectively replaced gold”.

Earlier this year, Palihapitiya raised his short-term outlook to $500,000 by 2025 and reiterated his belief that it could eventually reach $1 million per coin. He believes two main catalysts will drive this growth: the Bitcoin halving in April, which cut mining rewards in half, and the increased adoption of Bitcoin as a backup asset.

Bitcoin halving happens every four years and has already happened four times. Palihapitiya points out that after each halving, the price of Bitcoin rises to new highs as its supply narrows and attracts more attention from institutional investors.

He says that if Bitcoin just replicates its gains after the third halving in 2020, it could reach $500,000 and $1 million. The approval of the first 11 exchange-traded funds (ETFs) with the spot price of Bitcoin in January could support this growth, making it even easier for retail and institutional investors to invest in Bitcoin. Meanwhile, the strength of the US dollar, devaluation of other currencies and rampant inflation could lead more countries to adopt Bitcoin as a reserve asset. This is how Bitcoin’s market cap could eventually match or surpass gold’s valuation.

Other catalysts on the horizon

Another major catalyst for Bitcoin and the broader cryptocurrency market would be lower interest rates. Higher rates have driven many investors away from cryptocurrency and other speculative investments over the past two years, but cutting interest rates would likely draw them back to blue chip cryptocurrencies like Bitcoin.

Bitcoin, which the Securities and Exchange Commission (SEC) now defines as a commodity, should also face fewer regulatory difficulties. Former President Donald Trump wants the US to create a “strategic Bitcoin stockpile” and become the “Bitcoin superpower of the world” if he wins the presidential election in November. Vice President Kamala Harris also recently hired three pro-crypto advisers to her campaign, suggesting a departure from President Biden’s rigid crypto policies.

Should you follow Chamath Palihapitiya’s example?

Chamath Palihapitiya’s outlook for Bitcoin is actually conservative compared to other bullish investors. Ark Invest’s Cathie Wood claims its price will reach $3.8 million by 2030, while MicroStrategyhis (MSTR 0.84%) Chief executive Michael Saylor expects the price of the cryptocurrency to grow to $13 million by 2045.

We should take Palihapitiya’s estimates with a grain of salt, as he would certainly benefit from a large rise in Bitcoin prices. That said, I personally believe that the price of Bitcoin will stabilize and gradually increase as the recent halving, spot price ETFs and expectations for lower rates limit its downside potential. I’m not sure if it will rise to $500,000 or $1 million, but I have some exposure to Bitcoin through ETFs and wouldn’t be too surprised if its price doubled or tripled in the near future .