Millennials should invest in bitcoin, billionaire investor says

Tim Draper believes cryptocurrency is the key to a successful retirement savings plan

Bitcoin is the place to invest your money if you're a millennial, billionaire investor Tim Draper told FOX Business on Wednesday.

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The largest cryptocurrency by market capitalization has a total value of $157.5 billion, according to CoinMarketCap.com.

Draper believes its the key for millennials who want to make sure they have enough money for retirement.

"You look at bitcoin and you say 'Hey, this is great because it's not my father's Oldsmobile,'" Draper told FOX Business' Liz Claman. "Our banking system is the Oldsmobile, is the old Oldsmobile."

Draper accused the banking system of putting millennials in hundreds of thousands of dollars of debt.

"Things aren't quite working for [millennials,]" Draper added on "The Claman Countdown." "With the current salaries, they can't quite pay it off. It's a really difficult time, and they've become renters rather than buyers because they have to."

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Because of that, Draper points to bitcoin as an option to invest in something "decentralized."

"Start building your empire in the new model that doesn't require that you have to pay 2.5 to 4 percent every time you swipe your credit card to some bank or another and doesn't require all the heavy, heavy regulations we have that are all tied to the dollar," Draper qualified. "I think if you really want it to work, I think you go bitcoin or crypto[currency]."

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Draper reminded millennials that what may have worked for "your father or your grandfather" will not work for them. He said putting money away, penny by penny, will not work.

"If you're a millennial, you've got the world out there in front of you," Draper said. "What's the future going to look like? It's not going to be tribal anymore. It's going to be global. It's not going to be tied to geographic borders. It's going to be open."

Still, despite Draper's enthusiasm, millennials and other potential buyers should note that bitcoin -- almost since its inception -- has been extremely volatile. The cryptocurrency has an average volatility reading of 63 percent for the past six months. In real numbers, just look at its performance in January, when the market re-opened for the new year on the 2nd, Bitcoin was at $6867.49 according to Coindesk. Just 16 days later it zoomed to $9,134.48. On Wednesday it dropped to $8,635.98. By comparison, one year ago the price sat at $3581.55.

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But Draper believes the easiest way to participate in the global economic system is to "be able to move freely and move capital and goods freely throughout the world."

Bitcoin is a digital currency that's not tied to any bank or government. Like cash, it lets users spend or receive money anonymously, or mostly so; like other online payment services, it also lets them do so over the internet. There are several other virtual currencies, but bitcoin is the most popular.

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Bitcoins are basically lines of computer code that are digitally signed each time they travel from one owner to the next. Transactions can be made anonymously, making the currency popular with libertarians, tech enthusiasts, speculators and criminals.

However, not everyone agrees with Draper's praises of cryptocurrency. In fact, Nouriel Roubini, the economist known as Dr. Doom who accurately predicted the 2008 financial crisis, told the Senate Banking Committee in late 2018 that cryptocurrency represented the "mother of all scams."

According to a report from Coincodex, the United States is among the top countries in terms of share of bitcoin users. The value of one bitcoin is currently hovering around $8,672.

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FOX Business' Jonathan Garber and Shawn Carter contributed to this report.