Share this article
VC: Bitcoin is schmuck insurance
Chamath Palihapitiya, founder of The Social+Capital Partnership, and a former Facebook exec, sees Bitcoin as "schmuck insurance."
Updated Sep 10, 2021, 10:47 a.m. Published May 31, 2013, 5:40 a.m.
, founder of The Social+Capital Partnership, a co-owner of the Golden State Warriors NBA team and a former Facebook exec, sees Bitcoin as "schmuck insurance."
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
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.
Meanwhile, people who aren't financial masters of the universe don't enjoy such free passes. In fact, when the big money boys misbehave, it's the little guys who end up taking the brunt of the punishment (see Cyprus, Portugal, etc.)
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."
More For You
What to know:
- As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M.
- GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
- Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
More For You
Prediction Markets Are Quietly Turning Into a New Asset Class, Citizens Says
The bank said event markets are still tiny versus stocks but are rapidly expanding beyond sports into macro and policy risk.
What to know:
- Citizens said prediction markets are shifting asset class from niche to emerging.
- The bank argued that event contracts fix a key flaw in traditional finance by letting investors trade directly on inflation, elections, Fed moves and regulation.
- While regulation and liquidity are hurdles, prediction markets are likely to evolve from retail-heavy speculation into a mainstream hedging and information tool that could reach multitrillion-dollar annual scale, the report said.
Top Stories
