Bitcoin Will Rise to $1 Million in Next Five Years, Says Raoul Pal
Sounds similar to the iconic one-liner from Game of Thrones? Well, one can not deny that there are similarities. But, the imminent wave of bitcoin does not have stories of fear, suspicion, and doubt riding before it. On the contrary, it’s about hope and the burgeoning importance of cryptocurrency as a lucrative area of investment. Let’s dig deeper!
Macro-strategist and former hedge fund manager Raoul Pal believes that Bitcoin is going to hit $1 million in price within the next five years. Yes, you heard it right! Bitcoin is going to equal $1 million. But how? Pal, who once managed GLG Global Macro Fund in London and hedge fund sales in equity and derivatives in Europe for Goldman Sachs, has a well-thought-out argument to back his claim.
Empty Cashboxes and Proactive Central Banks
Bitcoin will grow not because its competitors will face a headwind. It will witness a surge because large chunks of investors will adopt Bitcoin resulting in a significant inflow of funds.
The obvious question that arises now is what makes investors so interested in bitcoin? According to Pal, who is also the founder of Global Macro Investor and Real Vision Group, the answer lies in the expected role of the Central Bank in tomorrow’s economy.
He believes economic recovery will take longer than expected. The problem of inadequate stimulus in the markets of the United States, Europe, and other parts of the world will suck the remaining cash out from the businesses. Insufficient cash will compel businesses to shut their operations.
The only thing that can save the global economy from this to happen is Central Banks across the world injecting more liquidity into the system. And, this is the step that would eventually help the price of the bitcoins to shoot up.
Enormous Wall of Money Coming Into Bitcoin – Price to Reach $1 Million in 5 Years Says, Raoul Pal
Earlier, Pal’s investments were equally allocated among currency, gold, stocks, and bitcoin. In his latest podcast with Daniela Cambone of Stansberry Research, Pal told that the share of bitcoin in his portfolio has gone up to 50% now. 50% investment in one asset class comes with a 50% exposure to risk. But, Pal is not daunted. According to him, the potential gain outweighs the risk.
With the cash holdings already gone into bitcoin, Pal is not much hopeful about the returns from the stocks either. Even, for gold, Pal is contemplating to sell them off and invest the funds to purchase more bitcoin. According to him, the return from gold will never outperform bitcoin.
For Pal, his entire strategy is not about reacting to the fears of hyperinflation or defaults. He, and people like him, are rather interested in exploring a different “monitoring unit for their savings and reserve assets.”
The Road to 1 Million Dollars
The road according to Pal is not a steep rise. It will rather be full of steps to gradually walk up. He expects family offices to slowly appear in the space. They will be followed by larger institutions. Eventually, some governments will also enter the scene through endowments, and pension plans.
Countries, like Nicaragua, that are suffering from currency devaluation will also adopt bitcoin soon. These movements will be of enormous impact. Even larger than Microstrategy investing it’s $425 million treasury reserve into bitcoin.
Pal knows that the large investors are still not in the pipeline. But, the scale of innovations going on in the bitcoin network will make it happen sooner than expected.