- Ex-Goldman hedge fund exec Raoul Pal laid out his macro bet on crypto in a recent podcast interview.
- He predicts bitcoin will land between $250k and $400k while ether will surpass $20k by March 2022.
- The RealVision CEO shares the makeup of his portfolio, which has gone 100% crypto since last year.
Many people talk a good game about being bullish on cryptocurrencies without positioning their portfolios accordingly, but RealVision founder and CEO Raoul Pal has put his money where his mouth is.
Pal, who used to co-run hedge fund sales in equities and equity derivatives for Goldman Sachs in London, has become increasingly bullish on crypto over the past year. The 30-year global macro investor revealed on a Monday “Bankless” podcast episode that he has shifted his portfolio to 100% crypto since last November and exited his gold holdings, which made up 25% of his previous portfolio.
The remaining 75% of his portfolio, which was 80% to 85% in bitcoin and 15% in ether, has also changed dramatically, Pal told “Bankless” hosts Ryan Sean Adams and David Hoffman.
Today, his portfolio has evolved to comprise 55% ether, 25% bitcoin, and an equally weighted basket of tokens of decentralized finance protocols, layer-one blockchains, and interoperability solutions (blockchains that seek to bring interoperability or communicate with each other include Polkadot, Cosmos, and Chainlink, etc.) He has also allocated to “some specific bets in social tokens, metaverse, and other longer-term macro bets.”
Pal’s transition to holding more ether derives from his belief that ethereum is “the greatest trade” from a macro perspective. With the rise of DeFi and non-fungible tokens, ethereum is already being adopted at least twice as widely as bitcoin, far dwarfing the rest of the crypto space, he said. The recent London upgrade or EIP-1559, which reduces ether supply, combined with the explosion in ethereum 2.0 staking, further adds to the bullish setup for ether’s price.
“There’s tons that have gone into just holding, tons that are locked up in DeFi, tons that are locked up in NFTs, and you’re left with, as of today, 11% of the entire supply of ethereum available and it’s going down every day,” he said. “And the demand is going exponential. The only outcome is an exponential rise in price, there’s no other outcome.”
As for potential threats from ethereum competitors or “ETH killers” such as solana or polkadot, Pal thinks that the entire smart contract platform space is “going up 100x” over time and even if ethereum’s dominance fades, it will remain as the “lowest risk, highest quality trade.”
Ether to $20k, bitcoin to between $250k and $400k
In fact, Pal has mapped the chart of ether’s price trajectory over bitcoin’s 2017 chart, which indicates that ether would reach “north of $20,000” around the end of this year or March next year.
Similarly, he mapped out bitcoin’s price to its trajectory in 2013, analyzing that it would land “somewhere between $250,000 to $400,000, with an outside chance of $1 million if we get an extended cycle,” within the same timeframe.
“Don’t forget that they usually go up 5x to 10x in the last three months of the year, and we haven’t even got to the all-time high,” he said. “Let’s say bitcoin goes up 5x from the $60,000 high, that’s $350k, that’d be a very normal rally for year-end considering we’re about to have an ETF.”
Aside from the catalyst of a bitcoin ETF in the US, which Pal thinks is “probably coming in October or November,” he also foresees the central bank pivoting to more money printing. “They may not print more money this year, but they will start talking about it,” he said. “Those two things alone are enough to drive bitcoin to $350k, 5x from here.”
Social tokens are going to be ‘culturally enormous’
The latest bout of NFT mania during the summer has got the ethereum community to refer to ether as “culture money,” but Pal is more bullish on social tokens or community tokens.
Fans and supporters purchase these tokens, which are linked to a company, an organization, or even a person, for perks such as exclusive access, content, or merchandise.
For example, when soccer star Lionel Messi transferred to Paris St-Germain, he was given a “large amount” of PSG fan tokens as part of his salary package. These tokens not only allow holders to vote on decisions about the soccer club but also give them access to the soccer players and other types of rewards.
“I think the social tokens are going to be culturally enormous,” Pal said. “One of the great reward systems humans have is culture and we’ve never been able to profit from it. In fact, just the brands did themselves that sold into culture, but this way we get to participate in culture in a more meaningful way, I think it’s a revolution.”