Influential investor Raoul Pal says the best trade he’s ever found is bitcoin (BTC-USD), which he’s described as “a call option on the future” and “the world’s most pristine reserve asset.”
In a recent interview on Yahoo Finance, Pal said that the central banks move toward digital currencies is “literally the biggest story” in his career.
Investors like Pal don’t want to compete against central banks, but aim to create “a digital world,” Pal said, underscoring that despite big reservations, policymakers don’t appear to want to ban crypto completely.
“They understand the technology is out of the bottle. The genie is out of the bottle,” the investor said. “There’s nothing you can do about it. It’s not going away.”
Despite the cryptocurrency’s notorious head-spinning volatility and growing association with scams, Pal declared flatly that bitcoin and crypto “is here to stay.” Last week, PayPal (PYPL) launched its own service to buy, sell and hold digital currency.
Pal, a Goldman Sachs alum, previously co-managed GLG’s global macro fund, one of the world’s largest. Since retiring back in 2004, he now authors a research letter, The Global Macro Investor (GMI), which is read by some of the most influential hedge funds, asset managers, and sovereign wealth funds.
He’s also the founder of Real Vision Television, an online subscription media company specializing in long-form investor interviews where he recently shared a 35-minute video detailing his crypto thesis.
‘Suddenly its a real asset class’
Pal has stated repeatedly that bitcoin’s price could get to $1 million, becoming a $10 trillion asset class, and possibly surpassing the gold market. In the last year, bitcoin’s price has surged more than 47% to last trade near $13,801. Last month, the digital currency jumped more than 28%.
With a market cap of around $240 billion, bitcoin is approximately the size of a “large, mid-cap S&P [500 Index] stock,” Pal pointed out. As it moves to $500 billion or $1 trillion, “suddenly it’s a real asset class and sucks in more money.” One of the drivers will be the “wall of institutional money” coming.
“It becomes a Soros-style reflexive loop where we’ve got the macro story backing it up,” said Pal — referring to George Soros, the speculative investor once credited with “breaking” the Bank of England in a bet against the British pound.
“We’ve got the flow of funds backing it up, then we’ve got the move, which the central banks are driving. It’s literally the…