To Palihapitiya, schmucks are the Lehman Brothers, Bear Stearns, AIGs, London Whales and other scandal-ridden "masters" of the financial services universe that have -- since the near-meltdown of the global economy in 2008 -- had an almost alchemical ability to turn gold into dross.
Palihapitiya's embrace of a better alternative in his Bloomberg commentary "Why I Invested in Bitcoin" clearly echoes the frustrations of many Bitcoiners with the dysfunctions of today's financial system. It's hard not to become cynical when the HSBCs of the world openly welcome massive cash deposits from Mexican drug cartels for years ... and somehow manage to still stay in business.
Bitcoin, on the other hand, is a way to view financial transactions in a whole new light, Palihapitiya writes. He compares it to the "red pill" offered to the character Neo in the movie "The Matrix" ... a pill that basically makes the scales fall from your eyes about how things really work.
"I’ve told my friends that it is entirely rational to allocate one percent of your assets to Bitcoin -- as I have," Palihapitiya writes. "Call it schmuck insurance. As the 2008 crisis proved, schmucks can cause a world of damage."
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.