A Perfect Storm Has Brewed For Bitcoin
With the global economy in a roadblock, and governments doing their best to devalue their currencies, non-correlating assets are looking more attractive to the bigger, more professional investors.
Former Hedge fund manager, Raoul Pal claims a perfect storm has brewed for Bitcoin and he sees the leading cryptocurrency as ‘the best opportunity on earth’.
Bitcoin – A Perfect Storm
A perfect storm has been created, making Bitcoin the best opportunity on earth according to Real Vision CEO, Raoul Pal.
Speaking yesterday on the Stephan Livera podcast, the former Goldman Sachs hedge fund manager said macro and Bitcoin technical analysis was all coming together perfectly.
‘Bitcoin and the macro world were on two separate paths that were converging and they‘ve just met,’ said Pal, who likened it to a ‘perfect storm,’ which he believes makes Bitcoin ‘the most dominant trade in the world’.
‘A perfect storm where everyone is about to come into the space, and Bitcoin looks like on the chart pattern that it’s about to outperform everything. It’s broken enormous chart patterns in its own right, we’ve had the regulatory change to its advantage, the macro has turned completely to its advantage, and I don’t see many scenarios where Bitcoin doesn’t do extremely well.’
What’s Driving The Perfect Storm For Bitcoin?
Pal said the developments of the last few months were key drivers in his analysis. The Wall Street legend, who retired in his thirties said US banks being allowed to custody cryptocurrencies would introduce lots of primer brokers into the space.
Pal mentioned famed hedge fund manger, Paul Tudor Jones opening up about his Bitcoin position had also ‘made it easier’ for the prime brokers to make their decision, and once the likes of Fidelity roll out their custody solutions prime brokers and family offices will ‘start moving in on a bigger scale.’
And with the legacy institutions racing to build infrastructure, it’s just a matter of time before we see a Bitcoin ETF, said Pal, something the SEC has tried its best to dismiss.
But even the SEC seems to be coming around. Now with clearer regulations, and a shake up at the SEC, it’s inevitable that we will see a successful ETF proposal, and that could come soon.
With Bitcoin-phobe SEC chairman Jay Clayton set to move on to pastures new and rumours abound that Hester Pierce ‘Crypto Mom’ could be set to replace him as chair of the SEC, it all adds to the perfect storm for Bitcoin.
Pal said a Bitcoin ETF would be launched sometime soon, and when it does it will introduce the Registered Investor Market (RIA) into the space.
The RIA is a different market from prime brokers and will introduce potentially trillions into the Bitcoin space.
RIAs are considered to be acting in a fiduciary capacity, and so held to a higher standard of conduct than brokerages. This fiduciary standard mandates that an RIA must always unconditionally put the client’s best interests, something that can’t be said for brokers.
As products like Bitcoin ETFs are introduced and the Bitcoin market rises, interest from institutions and more retail will naturally grow and ironically drag more and more in.
The biggest institutions aren’t taking note of Bitcoin at the moment, because at $220 billion or so, its market cap isn’t taken seriously, but as that grows, bigger funds and institutions will enter the space.
We’re already seeing this with MicroStrategy and Tahninis Restaurants deciding to allocate some or all of its equity into buying Bitcoin. The floodgates are opening slowly, and we should expect to see more firms allocating funds to buy Bitcoin.
‘The chances of a really powerful move going up are extremely high.’
Bitcoin is quickly growing into a must have asset. Is it the best opportunity on earth? Raoul Pal believes so, and with his macro and insider knowledge, you’d be brave to bet against him.
The global mess, never-ending quantitative easing, the Bitcoin Halving, institutions racing to build Bitcoin infrastructure, US banks allowed to custody Bitcoin, the SEC opening up to the possibility of an ETF, public funds now being used to buy Bitcoin – it all sounds so obvious.
Bitcoin is in the middle of a storm. A storm it was designed to hedge against. Is it all becoming a perfect storm for Bitcoin? Only a foolish contrarian would rebut it.
