Raoul Pal thinks Federal Reserve policies could lead Bitcoin to 100x gains.
On Thursday, Fed Chairman Jerome Powell said that the U.S. central bank would prioritize keeping unemployment low over reigning in inflation.
Pal, the former head of European hedge fund sales for Goldman Sachs, says that the shift in monetary policy is lending major upside to gold and, to an even greater degree, Bitcoin.
“Powell has shown that there is ZERO tolerance for deflation so they will do ANYTHING to stop it, and that is good for the two hardest assets – gold and Bitcoin. Powell WANTS inflation.
I don’t think he gets true demand push inflation, but he will get fiat devaluation, in conjunction with the other central banks all on the same mission. Overall, I think Bitcoin outperforms gold. Gold can go up 2x or 3x or even 5x while Bitcoin can go up 50x or even 100x.”
The top cryptocurrency is trading at $11,496 at time of writing, according to CoinMarketCap. A 50x gain would mean a value of $574,800, and a 100x gain would be $1,149,600.
In the short term, Pal says both gold and BTC could drop further, and he’s loading up on Bitcoin and Ethereum amid the market downturn.
“Gold has maybe 25% downside and Bitcoin 50%, so risk-adjusted BTC kills it. However, I own both but a LOT more BTC (and some ETH). Over time, all will rise again. I’m buying more BTC and ETH as the price falls and my gold is in a vault not to be touched.”
Meanwhile, Pal says Ethereum (ETH) offers a unique use case.
“[Ethereum is] not a reserve asset but a call option on a future platform for finance and trusted ownership via smart contracts.”