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Raoul Pal, who recently invested 98% of his liquid net assets into Bitcoin and holds a small amount of Ethereum, is now learning all he can about the third-largest cryptocurrency.
“I’m warming to XRP, to be honest… I now have a basic understanding. I don’t own it.”
Pal’s public exploration of XRP triggered a wide range of responses on crypto Twitter. He says the naysayers are only making him more interested in forming his own opinions.
“If somebody tells me not to look at Ripple, I will go and look at Ripple because you will not tell me what to do. And I will find out myself what its flaws and what its potential benefits are and assess the probability myself. I may reach exactly the same conclusions as you. I may reach completely different conclusions.”
Pal says traders should make level-headed and independent judgment calls on investment opportunities and always analyze whether the market is undervaluing the potential of a given asset.
“I don’t own Ripple. I’m not getting into that fight. But let’s assume I think it has a 10% chance of becoming something much bigger, but the whole market is giving it half a percent chance. That misalignment in risk-reward is a huge opportunity. That’s what we do in financial markets. We have to remain open.
You can’t trade financial markets and go, ‘Well I’m only going to trade Apple and every other company is a fraud. They’re not as good because their phones aren’t as good.’ I mean, that’s ridiculous. What we look for is ok, where is the secular trend change, what’s the best vehicle to express that view and can I diversify that view, can I add juice to that view, can I create alpha around that view?”
Ultimately, Pal says macro traders often have a unique perspective on the markets and he urges crypto enthusiasts to keep an open mind as to what’s required to bring new money into the space.
“So that’s why I come at it, and I think all the macro guys… we just come at it differently. And I understand that some of the crypto community doesn’t like that because it kind of feels like we’re abusing the space, but much like I talked about with regulation, I get people upset when I say regulation is a good thing. But if you want to get rich, people are going to have to come into the space.”