Chamath Palihapitiya, who first bought bitcoin years ago at an average price of about $100, still believes the cryptocurrency has much further to go despite the monster rally this year.

"I think this thing is a $100,000 a coin probably in the next three to four years. And I think it is in the next 20 years a million dollars a coin," he said in an interview Tuesday with CNBC's "Squawk Box."

The venture capitalist said he and two other friends in Silicon Valley at one point in 2013 owned 5 percent of the entire float of bitcoin. His initial dollar cost average for his investment in the digital currency was $100 a coin. He did sell some on the move higher.

Palihapitiya still thinks investors should put 1 percent of their net worth in the cryptocurrency.

"This is now a confidence game. There is no real utility in this. This is a fantastic fundamental hedge and store of value against autocratic regimes and banking infrastructure that we know is corrosive to how the world needs to work properly," Palihapitiya said. "You cannot have central banks infinitely printing currency."