Global Macro Investor CEO Raoul Pal has explained why he believes bitcoin is better than gold in every way. He proclaims that bitcoin is “the hardest form of money” and “the best reserve asset and best collateral asset ever seen.”
Macro strategist and former hedge fund manager Raoul Pal shared some analysis from his monthly global macro investment report early this week. The report is exclusively for Global Macro Investor clients. This month’s core focus is on bitcoin, particularly how the cryptocurrency compares to gold.
“I think its the world’s best trade and of which I’m irresponsibly long,” Pal wrote about bitcoin. He then proceeded to outline Bitcoin’s key features, such as its fixed supply and how its transactions are immutable, distributed, and decentralized, “making it incredibly secure,” the former hedge fund manager detailed, asserting: The honest truth is that it beats gold on every single measure except it just doesn’t have 10,000 years of history.
“My guess is that bitcoin will trade at rates higher than bonds, not because of credit risk or inflation — bitcoin suffers from neither — but because the value of that collateral is worth more due to its ‘pristineness,’” Pal opined. “Bitcoin is pristine collateral. The greatest form of collateral. Its blockchain ownership structure reduces the huge black swan risk of who owns what. It is all recorded and more importantly, provable.”
The strategist also explained that gold was used as collateral but its role has diminished as central banks choose bonds over it. “Gold also is not easy to use because it has to sit in vaults and its ownership needs to be proven and transferable and in the world of re-hypothecation, even central banks have re-lent the gold out so no one knows the owner, unless you own it and store it yourself,” Pal detailed, affirming:
In my opinion, bitcoin is the best reserve asset and best collateral asset ever seen. It is the hardest asset ever produced, with an impossible-to-change formula for supply that gives it predictability like no other asset ever.