Macro guru Raoul Pal believes the advent of central bank digital currencies (CBDCs) could adversely affect Bitcoin.
In a recent conversation with Scott Melker on The Wolf Of All Streets podcast, Raoul Pal says the threat that could derail Bitcoin is nuanced.
[adinserter block="1"]Pal imagines a scenario in which G20 nations develop a basket of currencies but enforce a ceiling on inflating the value of those currencies.
“It makes Bitcoin, at the margin, significantly less attractive. If they implemented that [policy] for ten or twenty years, it would make Bitcoin less needed. Can they do it? I have no idea. What probability would I give this? I’ve no idea.”
For now, Pal says the macro case for owning Bitcoin is as strong as ever.
“My conviction just keeps growing. It’s not really just a function of price. It’s a function of the amount of people that come into the space, the thoughts going on, the development going on, so yeah. I’m still both irresponsibly long financially, I’ve not sold a single thing, and I’m irresponsibly long in terms of commitment to where this is all going.
The ex-Goldman Sachs executive is also still interested Ethereum.
“Just because people got burned in 2017 doesn’t mean everything repeats.”
Ethereum survived and is now trading in the $2,000 range, with a market cap of almost $270 billion.
“It’s a risk curve, we’re just starting a whole space… A bond investor might start with corporate credit and go to junk bonds. An equity guy might go to blue chips, to tech stocks, to emerging markets. It’s normal. It’s risk-adjusted returns.
And when you go further out, in this case it’s the altcoin space, of course they’re riskier, so of course you take less risk.”
He says investors should always be prepared for losses.
“Because it’s risky. Risk is a real word, it’s not a one-way bet.”
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