Bitcoin and the crypto market in general is ticking up at the time of writing, and billionaire venture capitalist Chamath Palihapitiya believes it’s set to continue.
The Sri Lankan-born Canadian and American VC, also known as the “SPAC King” for his series of special purpose acquisition companies, was speaking this week on the All-In Podcast in which he regularly appears with a handful of fellow moneybags investors and mates.
Palihapitiya’s main thesis is that the markets (stocks and crypto) have factored in most of the negative macro and geopolitical news that’s been sending things lower lately. And that includes much of what might be considered worst-case scenarios to come from the conflict in Ukraine. That said, Russian deployment of a chemical or nuclear attack would be a “fly in the ointment”.
“I think that we’re in the midst of what I would call a melt-up,” said the billionaire investor. “So probably in the next month, month and a half, there really isn’t much ‘bad news’ that hasn’t been priced in.
“The thing I’ve learned over the past few years is that markets don’t actually care what the news is. They can process good news and bad news equally well. What they despise is the uncertainty of what the news could be.”
Palihapitiya pointed to two “huge buckets of uncertainty” easing in the past week or so. And those centre around positivity for an end to the Ukraine conflict if peace plan talks can continue, and the US Federal Reserve offering a clearer forecast for the coming two years with regards to its inflation-combatting interest-rate hikes.
Do the ‘exact opposite’ of retail
And the billionaire also said there are clear signs that retail investors did most of their capitulating and selling off at the start of March:
“Retail is not a very good signal of anything. In fact, if you actually look at retail flows, typically you will make money by doing the exact opposite of what retail does…
“Every single day since the beginning of this year, retail was a net buyer,” Palihapitiya continued. “In all of those days, the market got punched in the face. Finally, at the beginning of March, retail capitulated. And I posted that same day and I said, ‘Guys, this is the moment to buy.’”