One fund manager thinks Bitcoin could be worth $1,000,000 USD after some envelope-back analysis from “a while ago.” Former Global Macro Investor Group manager Raoul Pal has been predicting Bitcoin’s price based on a comparison with gold for over a year now.
Despite asserting that Bitcoin could be worth $100,000 or $1,000,000 each, Pal still only suggests that users follow the old adage: Only invest what you can afford to lose. Pal has been saying the same thing about Bitcoin since before its most recent price spike. Last year, Pal sent a newsletter to the Global Macro Investor Group with a simple trade recommendation: Buy Bitcoin.
If you stuck $5,000 into Bitcoins and each Bitcoin did go up to a gold equivalent of let’s say, only 100 ounces of gold (not the potential fair value of 700), then at current prices your Bitcoin stash would be worth $3.3m. Now that’s what I call a tail-risk option. It’s either worth zero or it’s worth a truly outstanding amount of money.
His Bitcoin price prediction comes from a broad guesstimation:
However, let’s use a broad guesstimate. One Bitcoin should theoretically be worth 700 ounces of gold or pretty close to $1,000,000, if we adjust existing supply of both to equal each other.
Raoul Pal On Bitcoin
There’s a finite amount that’s been mined. The rest is underground. We kind of know how long it’s going to take before all the gold is mined or before all the bitcoins. Put them in the same kind of equation we get a value of bitcoin and that value is a million dollars. Now, you’ll never hear an analyst say this—but I don’t mind this—I could be wrong by 90%, and it’s still worth $100,000.
What do you think about this Bitcoin price prediction? Comment below!
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