Former Goldman Sachs Director Explains Why His Crypto Wallet Is 70% $ ETH, 5% $ BTC

[ad_1]

In a recent interview, former Goldman Sachs executive Raoul Pal spoke about the impending global economic downturn and what he is doing to prepare for it, including explaining the rationale for the interesting allocation strategy he used for her crypto wallet.

Prior to founding the macroeconomics and investment strategy research unit Global Macro Investor (GMI) in 2005, Palco managed the GLG Global Macro Fund in London for the global asset management firm GLG Partners (now called Man GLG). Prior to that, Pal worked at Goldman Sachs, where he co-managed the European equity and equity derivative hedge fund sales business. Currently, he is the CEO of corporate finance and video channel Real Vision, which he co-founded in 2014.

Pal made his comments during an interview with crypto influencer Anthony Pompliano (aka Pomp), who is the co-founder of investment firm Morgan Creek Digital Assets as well as the host of The Best Business Show; this episode aired live on YouTube on October 4.

As reported by The Daily Hodl, regarding the outlook for the global economy, Pal said:

The work I have done suggests that the economy, the global economy, is likely to slow down quite significantly next year. And again, we might also see more stimulus and more fiscal stimulus. So I see it very differently from what most people see, but on the horizon, because of the fiscal cliff, we have about 3.5% of GDP coming from the fiscal cliff. We have all the advanced expenses that everyone, including me, had their house built in the past year.

Pal also pointed to the rise in oil prices and the cost of daily living, reducing the affordability of goods. In addition, he mentioned that the price hike will lead to slower than expected economic growth, which will lead to more stimulus.

The CEO of Real Vision believes governments will respond to the downturn with an approach similar to the COVID-19 pandemic by printing more money, potentially pushing up the prices of assets like stocks and crypto.

He said:

Governments have now realized, and central banks, that they cannot let collateral collapse. The assets on the balance sheet are not allowed to go down because otherwise you get a big margin call on the economy. So it seems that debasing the currency to optically increase assets is the only answer they currently have.

Pal said there was no way to avoid governments having to generate growth in order to keep the economy afloat. He pointed to a myriad of potential confounders in the pursuit of economic growth, saying the chances of the economy continuing to rise are low.

As for his crypto wallet, Pal said:

My current allocation is probably 70% ETH [Ethereum], 5% Bitcoin, and then a line of others. So why this allowance? It’s nothing against Bitcoin, it’s not against anything else. It’s because I’m a financial markets guy and we use risk curves. So at certain points in the cycle, in the middle of a bull market, you want to take as much risk as possible. So you want to turn to the more speculative part of the market.

I isolated the fact that I thought Ethereum was going to see other flows, this is at the start of its adoption cycle and it would likely push prices up further than Bitcoin. And it seems to be playing out.

Disclaimer

The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing or trading crypto-assets carries a risk of financial loss.

Image credit

Image devjkombajn via Pixabay

[ad_2]