Oct 26, 2022 - Economy & Business

Chamath Palihapitiya: "I massively benefited" from Fed policy

Chamath Palihapitiya, founder and chief executive officer of Social Capital.

Chamath Palihapitiya, founder and chief executive officer of Social Capital, on the floor of the NYSE. Photo: Michael Nagle/Bloomberg via Getty Images

Investors in risky asset classes "massively benefitted" from years of ultra-easy monetary policy, Chamath Palihapitiya, founder and CEO of Social Capital, said at the Axios BFD event Wednesday.

Why it matters: Chamath made his name as a boastful memelord, leading a crowd of retail-investor apes into SPACs and crypto. Now he's wearing a dark suit, talking about risk-adjusted returns and intellectual rigor, and remorsefully saying that he was blinded by zero interest rates.

  • Everything he did at the height of the boom, he now says, was just an "experiment" in terms of generating returns for his investors.

Context: With inflation perched near 40-year highs, the Federal Reserve is embarked on its most aggressive tightening campaign in decades -- reversing years of zero interest rates that fueled massive speculative bubbles, Palihapitiya acknowledged.

What they're saying: “There's a narrative fallacy in Silicon Valley. We have been telling this lie which is that this is an artisanal craft business. It's not true," the investor told Axios' Dan Primack.

  • "We've actually had a massive tailwind because we had a zero interest rate environment that allowed us to raise unbelievable amounts of money from investors who frankly had few other alternatives because interest rates were zero.”

--Axios' Felix Salmon contributed to this article.

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