Former hedge fund manager Raoul Pal shared his view on the economy, gold, and bitcoin last week in a podcast interview with Daniela Cambone of Stansberry Research. Pal previously co-managed the GLG Global Macro Fund in London after departing Goldman Sachs where he co-managed the hedge fund sales business in Equities and Equity Derivatives in Europe. He then founded Global Macro Investor and Real Vision Group.
“The economy is not going to recover for a lot longer than we expect,” he began. “There’s no stimulus around and we’ve got more problems to come in Europe, the U.S. and elsewhere. And businesses don’t have enough cash flow, they’re closing in droves and that’s what I called the insolvency phase.” The former hedge fund manager added, “The only answer is more from the central banks, so that’s why I started to buy more and more bitcoin.”
His portfolio used to be equally distributed between U.S. dollars, gold, equities, and bitcoin. However, he revealed during the podcast that his bitcoin allocation is “probably above 50% now.” While acknowledging that this BTC allocation exposes him to a 50% downside, he said it is ok for him because the upside is “so much bigger.”
Pal explained that he has reduced his cash holdings and put the funds into bitcoin. “My trading positions are relatively small because I don’t think there’s as much opportunity as the room is in bitcoin. So really, mainly a bit of cash, some gold, and bitcoin. And I’m also dabbling the idea of marketing my gold to purchase even more bitcoin,” the owner of Global Macro Investor shared, clarifying:
I don’t do not like gold yet when you reach the macro possibility … if bitcoin begins bursting out of these patterns that it’s been creating, it is going to massively outperform gold. I’m 100% certain of that so in which situation why would certainly I have the gold appropriation.
The previous Goldman Sachs supervisor made clear that he is “not afraid of anything, default or hyperinflation else,” adding that he wants people “embracing a various tracking device for their cost savings and get assets.”
Pal has a bullish forecast on the rate of bitcoin, forecasting that it will certainly be $1 million within 5 years. He described:
Because the globe is collapsing [it’s going to be not but] it’s due to the fact that there’s gonna be fostering by the actual large swimming pools of funding.
He sees bitcoin fostering occurring in waves, starting with retail and also moving into hedge funds. You can’t prime broke bitcoin properties however that’s coming. When that takes place, he says it will certainly be “another massive tale,” much like the story of Microstrategy relocating $425 million treasury get into bitcoin.
Emphasizing that “the pipelines aren’t there” to allow huge institutional financiers to buy bitcoin yet, he said, “however that’s coming … it’s on everybody’s radar display and there’s a lot of clever people working with it.” Pal additionally shared:
From what I recognize, from every one of the organizations, [as well as] every one of the people I talk to, there’s an enormous wall surface of cash entering this.
He sees bitcoin fostering occurring in waves, beginning with retail as well as moving right into hedge funds. You can not prime broke bitcoin properties but that’s coming. We’re starting to see family members’ workplaces in the space. When that occurs, he states it will be “one more huge tale,” much like the tale of Microstrategy moving $425 million treasury book into bitcoin.