In a recent interview, former Goldman Sachs executive Raoul Pal explained why he is “long” on XRP.
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.
In the April 2020 issue of the GMI newsletter, Pal explained why he believes that Bitcoin, which he called “the future”, could one day have a $10 trillion valuation. 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.“
As you may remember, on 22 December 2020, the SEC announced that it had “filed an action against Ripple Labs Inc. and two of its executives, who are also significant security holders, alleging that they raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.”
Anyway, on Friday (October 7), during an “Ask Me Anything” session streamed on the “Real Vision Finance” YouTube channel, according to a report by The Daily Hodl, Raoul had this to say about XRP:
“I’m long a bit. I think it’s like a special situation, and I think the court case gets resolved positively, and it goes up… It’s actually a very used protocol. By using Metcalfe’s Law, it’s pretty decent. The only thing – Americans can’t invest in it because it got taken off the exchanges...
“But generally speaking, it does what it’s supposed to be doing. It’s working as a payment transmission. I have no issue with it. There’s plenty of activity on-chain, and Metcalfe’s Law prices it appropriately to where it is.“
On September 21, Stuart Alderoty, who has been General Counsel at Ripplesince January 2019, commented on the ongoing lawsuit against Ripple. He made his comments while speaking to CoinDesk TV’s flagship show “First Mover”.
Aldertoy told CoinDesk TV:
“I do believe that this policy in the United States of regulation by enforcement is a failed policy, and it’s creating havoc in the marketplace, and that havoc it in the marketplace ultimately hurts the very retail consumer that the SEC purports to protect.
“I think what we’re seeing is power and politics elevated over sound policy, and that is not a good thing. To your question, ‘why ripple?’… That is a good question. I’m not sure I have a good answer to i, but what I will tell you is that the lawsuit was filed on December 22nd 2020 on the last day of the prior administration when Jay Clayton was the chair of the SEC. The day after the lawsuit was filed, Jay Clayton left office, and within two weeks of the lawsuit being filed, the entire senior leadership team that was I think involved in the decision to file the lawsuit left the SEC.
So why Ripple? I’m not really sure. I think we can all venture a bunch of different guesses. Maybe the SEC was tired of playing whack-a-mole with some smaller tokens, and they felt that if they could go after Ripple and indirectly attack the digital asset XRP, which Ripple relies on to facilitate its cross-border payments, maybe they thought that they can send a broader message to the entire market.
“But I think what they’ve learnt is that if you challenge a well-resourced company, that well-resourced company can put on a very robust defence and really expose the SEC that what they’re doing in this case is not applying the law. It’s not a faithful allegiance to the law. They’re seeking to remake the law, and they don’t have the power to remake the law. Only Congress can remake the law.“
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