Bitcoin’s Blunder: Chamath Calls It a Reserve Asset Faux Pas!

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Markets

What ho, old sport! Here’s the lowdown:

  • Chamath Palihapitiya, the chap with a penchant for pontificating, declares bitcoin as lacking the je ne sais quoi-privacy and fungibility, mind you-required for central banks to consider it a reserve asset. Gold, he insists, is still the bee’s knees.
  • Meanwhile, on the podcast circuit, Erik Voorhees defends the old “pile ’em high with bitcoin” strategy, while Jason Calacanis raises an eyebrow at the financial acrobatics involved. “Community EBITDA,” indeed-sounds like something dreamed up over a spot of tea and a dodgy spreadsheet.

Now, gather round, for the tale of Chamath Palihapitiya, a fellow who’s made a packet as a venture capitalist and once toiled at Facebook (before it became Meta, or whatever they’re calling it these days). This chap has taken it upon himself to declare bitcoin’s “structural failing,” which, he claims, will prevent it from becoming the darling of governments and central banks. Bold words, what?

During a chinwag on the People by WTF podcast at the World Government Summit, Chamath opined that for a digital asset to be taken seriously by the chaps in charge, it must tick certain boxes-privacy and fungibility being the chief among them. Bitcoin, he says, is about as private as a glass house and as fungible as a snowflake in a blizzard.

Fungibility, you see, is the notion that one unit of an asset is as good as the next. With gold or cash, one nugget or note is indistinguishable from another. But bitcoin, ah, it’s all out in the open on the blockchain, where every transaction is etched in digital stone. This means some coins might carry the stigma of past misdeeds, making them less desirable than their untainted brethren. Not exactly the stuff of reserve asset dreams, eh?

Chamath reckons this traceability is bitcoin’s Achilles’ heel, rendering it less than ideal for central banks. So far, only the Czech National Bank has taken the plunge into bitcoin, which, let’s face it, isn’t exactly a stampede.

Gold, on the other hand, he says, is the cat’s whiskers when it comes to privacy and fungibility. Central banks are sticking with the shiny stuff, and who can blame them? Thus, Chamath doubts bitcoin will see another tenfold leap in value driven by central bank demand. Instead, he hints that some other crypto whizbang or smaller token might step up to the plate.

Mind you, Chamath isn’t entirely down in the mouth about digital finance. He’s quite the cheerleader for stablecoins, those clever little cryptocurrencies pegged to the likes of the US dollar or commodities. Gold-backed stablecoins, he suggests, could be the next big thing, smoothing out the wrinkles in payments and settlements.

Over on the This Week in Startups podcast, Jason Calacanis and Erik Voorhees had a bit of a to-and-fro about MicroStrategy (now Strategy, because rebranding is all the rage). Voorhees, a bitcoin stalwart and founder of ShapeShift, stood firm on the company’s bitcoin hoarding strategy, while Calacanis raised a quizzical eyebrow at the financial gymnastics involved. “Community EBITDA,” he scoffed, “sounds like something cooked up by a chap who’s spent too long in the accounts department.”

And let’s not forget hedge fund titan Ray Dalio, who recently quipped, “There is only one gold.” Quite the endorsement, what?

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2026-03-05 14:22