Macro investor Raoul Pal predicted on Monday a 60% probability that Bitcoin BTC/USD could reach $150,000, with a 20% chance this peak might be achieved more rapidly than anticipated and followed by a decline.
Pal also assigned a 20% possibility of Bitcoin experiencing a bubble cycle akin to the one between 2011-2013, potentially soaring to $250,000.
What Happened: Pal's analysis, in his conversation with entrepreneur Anthony Pompliano, comes in the wake of the Bitcoin ETF approval, which, contrary to expectations, saw a decrease in Bitcoin's price.
He attributed this to the market needing time to digest the new influx of capital, estimated at two to three billion dollars.
"The whole process of bringing people in, it's going to take a while longer. But it's there now," Pal explained, likening the ETF to a trade deal that facilitates easier capital flow into the crypto world.
Discussing the nature of capital entering through ETFs, Pal observed that while some view this as transient, likely to withdraw during market downturns, he believes a significant portion will be more stable.
"The biggest buyers of this stuff is actually the millennial cohort... They invest in that for one case every month. So that's sticky," he stated, suggesting a more enduring investment trend.
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Why It Matters: Pal also touched upon the evolving investor base in Bitcoin, noting the shift from hardcore believers to a more finance-oriented crowd. This change, he believes, could potentially moderate the extreme volatility historically associated with Bitcoin.
"I think as assets mature they become less volatile," he said, indicating a potential decrease in both upward and downward price swings.
The conversation also delved into the broader implications of Bitcoin's financialization, including introducing leveraged products and options on ETFs. Pal foresees this development as a double-edged sword, potentially dampening market volatility and attracting new investors.
Pal did not shy away from acknowledging the uncertainties and complexities of predicting Bitcoin's future. "Who the hell knows?" he candidly admitted, highlighting the inherent unpredictability of cryptocurrency markets.
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