In a recent interview, former Goldman Sachs executive Raoul Pal talked about his history of investing in crypto and more specifically explained why he has invested 55% of his money in Ethereum, which he calls “the biggest, clearest bet of all”.
Prior to founding macro economic and investment strategy research service Global Macro Investor (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. Currently, he is the CEO of finance and business video channel Real Vision, which he co-founded in 2014.
Pal is bearish on fiat currencies, especially the U.S. dollar, because he believes that they are continuously depreciating against assets such as real estate, stocks, and crypto. Although some believe that we are currently witnessing an “everything bubble” that is about to burst, Pal remains bullish on both stocks and crypto. Nevertheless, he says that he has invested 100% of his liquid net worth in crypto because he believes that this asset class offers the greatest upside potential.
And within the crypto space, although he initially was much more bullish on Bitcoin than Ethereum, around the end of the first quarter of this year he started to believe that Ethereum is “the better asset allocation for performance” for now and over the next one year at least.
As for his interview with Russo, here are a few highlights:
- Regarding Bitcoin, he “first started investing in it back in 2013.”
- By 2015, he “started realizing that everything in the world was going to get tokenized in the end, and that this was going to be a predominant business model.”
- Although he made “a lot of money” during Bitcoin’s 2017 bull ran, he got out too early.
- Around 2019, he started really focusing on crypto, expecting that a recession would come in 2020.
- After the COVID-19 pandemic hit, he started preparing himself for “the biggest monetary experiment in recorded history.”
- He started buying Bitcoin again around mid March 2020 when everyone was panicking and selling all risk-on assets, and he “really went very long” after the price of Bitcoin broke $10,000.
- Over the next few months, he invested nearly 100% of his liquid net worth in Bitcoin but by around October 2020, he started increasing his exposure to Ethereum because he understood that tat Ethereum “was actually going to massively outperform for a couple of years.”
- He also “added a basket of other tokens”, focusing on social tokens that use non-fungible tokens (NFTs) “outside of just artwork.”
- Currently (i.e. as of July 2021), his crypto portfolio is 55% in $ETH, 25% in $BTC, and 20% in other cryptoassets.
Back on April 21, Pal explained in more detail why he had become much more bullish on Ethereum than Bitcoin:
He then went on to say:
- “The ETH space is growing at 100% YoY (vs 50% YOY for BTC) and it is attracting a massive proportion of the developer talent and applications too.“
- “At this point in the risk cycle and with ETH 2.0 coming (cheaper fees and less supply), I’m struggling to not sell all my BTC to move my entire core position to ETH. To be clear – I’m a massive BTC bull, but I think ETH is the better asset allocation for performance right now.“
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.