Former macro hedge fund manager Raoul Pal, who believes that Bitcoin is “a priceless reserve and collateral asset”, said earlier this month that over 50% of his personal investment portfolio is dedicated to Bitcoin.

Prior to founding macro economic and investment strategy research service GMI in 2005, Pal co-managed the GLG Global Macro Fund in London for global asset management firm GLG Partners (which is now called “Man GLG”). Before that, Pal worked at Goldman Sachs, where he co-managed the European hedge fund sales business in Equities and Equity Derivatives.

Also, currently, Pal is the CEO of finance and business video channel Real Vision, which he co-founded in 2014.

In the April 2020 issue of the GMI newsletter, Pal explained why he believes that Bitcoin, which he calls “the future”, could have a $10 trillion valuation in the future.

In that issue, Pal said that the idea of a $10 trillion valuation for Bitcoin is not so crazy:

“After all, it isn’t just a currency or even a store of value. It is an entire trusted, verified, secure financial and accounting system of digital value that can never be created outside of the cryptographic algorithm…

“It is nothing short of the future of our entire medium of exchange system, and of money itself and the platform on which it operates.”

In the latest of the GMI newsletter, once again, Pal talked about Bitcoin.

First, he recommended three books that help one to get a better appreciation for Bitcoin: “The Bitcoin Standard“, “The Internet of Money“, and “The Internet of Money Volume Two: A Collection of Talks by Andreas M. Antonopoulos“.

Pal called Bitcoin “priceless” because “its core value is that it the hardest form of money ever invented.”

Something that has a finite fixed supply and is incredibly secure has true value. The fact that it is divisible, portable, transferable and exchangeable makes it potentially have more value than any other store of wealth, or any other form of money.

He says that although currently government bonds (especially U.S. Treasurys) are “the current collateral for the world”, all the quantitative easing (QE) being done by central banks has resulted in devaluation of collateral over time and “abnormally” low cost of collateral (which means a never-ending debt cycle).

Pal points out that Bitcoin is the “most desirable” form of collateral for two reasons:

  • Since central banks cannot create as much of it as they like (unlike fiat currency), its value goes up during “collateral shortages (recessions)”, which means that only the strongest creditors will have access to it, thereby allowing the business cycle to automatically eliminate the weakest creditors.
  • The same blockchain technology that enables Bitcoin to exist “reduces the huge black swan risk of who owns what.”

Pal also noted that for Bitcoin to become a collateral asset, it just needs a yield curve, and that it is only a mater of time before we will be able to “establish the time preference for Bitcoin over 30 years or more, just like bonds”.

Then, on September 8, Pal asked the following interesting hypothetical question:

A few minutes later, Pal tweeted that he is fighting the urge to sell some of his gold to buy more Bitcoin:

Pal then made the following interesting disclosure about his personal investment portfolio:

Also, Pal acknowledged that despite his great belief in Bitcoin as the ultimate store-of-value, he understands the downside risk of Bitcoin:

Featured Image by “SnapLaunch” via

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.