Bitcoin (BTC) is undoubtedly the best performing asset… ever. MarketWatch reported earlier this year that if one strapping investor put $100 into BTC on July 16th, 2010, that sum would have swelled to over $7,000,000 by March 2019. This, for those wondering, is upwards of a 70,000% or 7,000,000% gain — something most investors can’t even comprehend (I can’t, that’s for sure).
Related Reading: On-Chain Metrics May Point to Underlying Bullishness for Bitcoin
While this might make you think that the cryptocurrency market has peaked — reached a point where it can’t appreciate anymore — a leading analyst says that Bitcoin’s rally is just getting started.
That’s crazy, you might think. But, there may be good reasoning for this.
Bitcoin Remains Undervalued
According to Raoul Pal, a former executive of Goldman Sachs’s European Hedge Fund sales business, Bitcoin is still “very cheap”.
In a very to-the-point tweet, Pal, who has been an advocate for the leading cryptocurrency for at least five years now, argued this point from a “longer-term time horizon” perspective.
This best performing asset in all recorded history.
And on a longer-term time horizon, its still very cheap, in my opinion.
— Raoul Pal (@RaoulGMI) September 22, 2019
Pal’s tweet comes despite critics saying that cryptocurrencies are fairly valued. For instance, Larry Summers, the former Vice President of Development Economics and Chief Economist of the World Bank, said that gold, at $7 trillion, is around 1% of global wealth. And, cryptocurrency, he added, is approximately 5% of that. These proportions, he claims, are “just about right”.
So, why is the institutional investor and macro analyst so bullish on Bitcoin?
Firstly, he believes that BTC could act as a hedge in a financial disaster. After laying out how harrowing the price charts of countless assets look, he said to his followers that purchasing bonds, dollars, diamonds, and, of course, Bitcoin may be a wise play. The idea here is that the aforementioned assets store their value, even across long periods of time and recessions.
Secondly, Pal remarked in a podcast with Bitcoin podcaster Stephan Livera that BTC is the only asset that makes sense for Millenials and younger demographics.
And lastly, he has asserted that a cryptocurrency-centric economy will only be a boon for Bitcoin. Pal explained that while he doesn’t believe Libra will be the cryptocurrency to become the world’s next reserve currency, something similar will take its place. The implementation of this system, he claims, will be “good for Bitcoin and gold”. In a sub-tweet, Pal further explained his thoughts, responding “exactly” to a comment claiming that a fiat digital asset will as an on-ramp for the cryptocurrency market.
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