Global Macro Investor: Even 1% Chance of 100x Upside Makes Bitcoin “Crazy Attractive” to “Macro Guys”
- Former Goldman Sachs executive Raoul Pal says Bitcoin at current value ‘ludicrously’ underpriced
- Macro guys find it “super interesting” and “they’re all in it”
Former Goldman Sachs executive Raoul Pal, the founder of Real Vision Group told Stephen Livera on his podcast this week that Bitcoin at its current price may be ‘ludicrously’ underpriced and has the potential to hit $8 trillion.
“If you try and get your head around the digitization of everything… around an alternative financial system.”
Explaining how Bitcoin can hit trillion-dollar market capitalization, he points to analyst PlanB’s stock to flow model that puts BTC value at $1 million and beyond in the future. Bitcoin derives this value from its scarcity just like gold and silver.
#bitcoin Stock-to-Flow model made with only 2009-2012 data (black):
– correctly predicted $200-800 price after 2012 halving
– predicted $6-10k price after 2016 halving
– predicts $100k after 2020 halving
– $1mln after 2024
Updating model with new data lowers the prediction a bit. pic.twitter.com/hzwEXUN7XJ
— PlanB (@100trillionUSD) May 7, 2019
“Even if it has a low probability. If you recreate a low probability of let’s say, what’s the global money supply and global debt? It’s something like $80 trillion. So if it’s worth $80 trillion dollars, let’s say you have a 10% probability. That’s $8 trillion. [Bitcoin] is currently worth $200 billion. So even if it has a 1% chance of working – that’s how probabilistic frameworks work.”
This is the reason Pal says Bitcoin is “ludicrously underpriced,” and that makes it
“crazy attractive..sucking in so many of these macro guys, because they’re like, ‘Damn, nothing else has this payoff’.”
Even as low as a 1 percent chance of bitcoin going 100x, that’s enough for the macro investors to put their skin in and finding it “super interesting.'”
“I know all these macro guys, they’re all in it. They get it. They get the optionality. They may be complete believers, part believers, partial believers. But even then, if it’s a 1% chance of being right and the upside is 100x from here, you’d do this all day.”
You can check out the full podcast here.