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Bitcoin is like a call option to the emergence of cryptocurrencies in the world, said Raoul Pal, CEO of Real Vision.
"I've never seen anything like what is going on right now. You have a limited supply asset that now is a globally recognized brand that everybody knows, but not everybody understands. What's happening now is institutions are coming into the space," Pal said.
Bitcoin has risen more than 150% year to date, having breached all-time highs in late November. Pal said that much more growth is expected now that an “enormous wall” of institutional money is flowing in.
“I use a number of measures. I use technical analysis, logarithmic charts, I use the stock-to-flow ratio…I use a whole number of different yardsticks, somebody sent me a report today that is written about Metcalfe's law and applying that, the adoption of bitcoin and putting it in price, they all basically come to the same thing,” he said. “They basically come to, we’re going to be somewhere between $500,000 and $1 million within 5 years, and we should be somewhere between $100,000 to $300,000 in the next 12 to 18 months.”
Bitcoin’s rise and fall comes in cycles. While 2017 exhibited mania levels, the surge to all-time highs this year does not share the same pattern, Pal noted.
“The world goes through these phases, and the more conservative people, the less risk takers, tend to be later to the party. So, I think the banks are late here, because they’re going to get disrupted somewhat,” he said, adding that for the first time, retail investors have had a chance to “front-run” institutions moving into the crypto space.
By David Lin
For Kitco News
