Raoul Pal spoke about the importance of Bitcoin volatility
Former head of the hedge fund and CEO of the financial media platform Real Vision, Raoul Pal said that Bitcoin’s volatility is the main catalyst for the asset’s exponential price increases.
In a interview during the Reuters Global Markets Forum, Pal acknowledged that Bitcoin is a volatile asset, but asked investors to adapt to the nature of digital currency, as it can offer a risk-reward distortion.
However, Pal noted that regulatory uncertainty may hinder the current rise of Bitcoin. Countries like India have initiated measures to ban the BTC, with analysts saying that the movement can be monumental for the increase of assets in the traditional world.
Pal notes that it will be difficult to stop the cryptocurrency space, but the regulatory uncertainty surrounding Bitcoin will ultimately benefit the asset. He pointed out that one of the regulatory frameworks will be the government’s tax on crypto assets.
At the time of writing, Bitcoin was trading at $ 56,189 just a week after reaching a new higher price of almost $ 65,000 on April 14, 2021. The entry of potentially institutional investors like Tesla, PayPal and Visa inspired the record price.
More countries can launch CBDCs
In an optimistic outlook for the digital assets sector, Pal expects the European Central Bank and the U.S. Federal Reserve to launch their digital currencies in the next three to five years. China is leading the way in establishing a digital yuan, while other major jurisdictions are conducting feasibility studies for CBDCs.
Bitcoin bull Pal also shared the distribution of investments in cryptocurrencies, stating that he ventured into cryptocurrency exchanges, decentralized finance (DeFi) and community tokens.
“I’m probably 50% now in Bitcoin, 30% in Ethereum and 20% in alternative tokens … to try to maintain a balance across the space, because I really don’t know what will win in that space and what not,” said Pal.
He also commented on Dogecoin’s rise in recent days. Although Pal revealed that he invested in the meme-inspired asset, he is unsure about its long-term longevity. To date, Dogecoin was trading at $ 0.31, representing an increase of 6,495% in the year.