In a recent interview, former Goldman Sachs executive\u00a0Raoul Pal talked about his investments in the crypto space, and more specifically, he explained why he more bullish on Ethereum than Bitcoin and why he got into Dogecoin.<\/p>\n
Prior to founding macro economic and investment strategy research service\u00a0Global Macro Investor (GMI)\u00a0in 2005, Pal\u00a0co-managed the GLG Global Macro Fund in London for global asset management firm GLG Partners (which is now called \u201cMan GLG\u201d). 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\u00a0finance and business video channel\u00a0Real Vision, which he co-founded in 2014.<\/p>\n
On 30 November 2020, Pal\u00a0revealed\u00a0that he was about to sell his entire gold holdings and use the money to invest in Bitcoin and Ether.<\/p>\n
\u201cI have a sell order in tomorrow to sell all my gold and to scale in to buy BTC and ETH (80\/20). I dont own anything else (except some bond calls and some $\u2019s). 98% of my liquid net worth.<\/em>\u201c<\/p>\n Then, on Janaury 18, Pal provided this\u00a0update\u00a0on his crypto portfolio allocation:<\/p>\n \u201c#irresponsiblylong\u00a0BTC and ETH. My split is now 70\/30.<\/em>\u201c<\/p>\n On April 21, Pal explained why he has become much more bullish on Ethereum:<\/p>\n He then went on to say:<\/p>\n Pal\u2019s latest comments about Bitcoin and Ethereal were made during an episode of the \u201cUpOnly\u201d podcast that was released on YouTube on June 15.<\/p>\n He got really interested in Ethereum once he realised that those people who were saying that Melcalfe\u2019s Law only applies to Bitcoin were wrong:<\/p>\n \u201cSo I started then trying to understand more about Metcalfe\u2019s Law, how it affected the mobile phone industry, the internet, and then stuff like Amazon, Facebook, Google, and all of that. And so that was the huge breakthrough for me was figuring out all of this and that ETH was actually gaining faster adoption than Bitcoin.<\/em><\/p>\n \u201cAnd we know it by the number of developers working on it, the number of applications working on it, and the number of wallet addresses. The rate of increase is growing at about twice the speed of Bitcoin right now. So ETH\u2019s growing about a hundred percent a year and Bitcoin\u2019s growing about 50 percent a year. The entire digital asset space is growing about 113 percent a year, which is twice the speed that the internet get at. So, this is the fastest adoption of any technology in all recorded history, and ETH is the frontrunner right now. That doesn\u2019t mean it always will be, but right now it\u2019s clearly winning network effects and therefore I think the network is undervalued.<\/em>\u201c<\/p>\n Pal also said that after investing in Bitcoin and Ethereum, he decided to invest in some other cryptoassets:<\/p>\n \u201cI wanted to allocate money into a basket of other alts. I didn\u2019t know which ones. I knew ETH and Bitcoin I wanted. I have no idea which other project is going to get proper network effects. Everybody kind of screams about them all day on Twitter, but there\u2019s not many of them that have yet. Some of them are starting to. So I just said right, I\u2019m just gonna choose a kind of basket of 10. And I\u2019m gonna have a mix of protocols like Cardano, Polkadot for interoperability, I\u2019m gonna choose some DeFi stuff\u2026 I just watch it and they all went up 250% or something in a month and a half\u2026 and then I was now fully invested.<\/em><\/p>\n \u201cI had no cash left\u2026 so I thought \u2018OK, what do I want to do here?\u2019. So I added to my ETH because this is the biggest bag I wanted. Switched more Bitcoin into ETH, and then I thought okay, I want to get involved with some other stuff. I want to make some proper macro bets, and I will also want to enjoy some of the fun.<\/em> <\/p>\n \u201cSo, the two enjoying the fun that I want to learn from \u2014 I bought DOGE because I got I\u2019ve got a thesis on it, and the reason being is I don\u2019t think people understand that it has a higher probability of network effects than people imagine. Because you\u2019ve got so many retail investors in it, all you need to do is create applications for it, and you change the entire game. So it\u2019s one half the war. So I thought \u2018you know, that\u2019s interesting\u2019, and everyone tells me I shouldn\u2019t do it, so I\u2019m gonna do it\u2026 so that was my idea with that.<\/em>\u201c<\/p>\n Later in the interview, he talked more about Dogecoin:<\/p>\n \u201cSo it\u2019s become accessible. It\u2019s become a bit of a joke, and we know that actually drives adoption right now, and then Mark Cuban started adopting for Mavs merch and tickets, and I was like, \u2018OK, that\u2019s interesting\u2019 because you know Mark\u2019s a good guy and he gets this stuff, and then you know, Elon\u2019s all over this, and my guess is he\u2019s gonna try and capture that attention of all of these people that invested in this joke and turn it to something real. Then they feel part of it\u2026 whether it\u2019s useless streaming payments from Tesla cars or whatever. It doesn\u2019t really matter. The probability of a network of that size now being turned into an application is extremely high.<\/em>\u201c<\/p>\n https:\/\/youtube.com\/watch?v=UA-KZxHKVZA%3Ffeature%3Doembed<\/p>\n\n
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