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• The price of bitcoin could hit $1 million in five years, up from about $11,000 now, thanks to an "enormous wall of money," a former Goldman Sachs hedge-fund chief said in a recent interview.
• Raoul Pal, who has allocated more than 50% of his capital to bitcoin, said a wave of institutional funds would adopt the digital currency as they realize the economy will take a long time to recover from the COVID-19 pandemic.
• "It's an enormous wall of money — just the pipes aren't there to allow people to do it yet, and that's coming," he said. "But it's on everybody's radar screen, and there's a lot of smart people working on it."
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Raoul Pal, the former Goldman Sachs hedge-fund manager who founded Real Vision, said the price of bitcoin could hit $1 million in five years.

In an interview with Stansberry Research on October 7, he pinned such a price increase to a wave of institutional funds pouring "an enormous wall of money" into the asset.

Bitcoin's price has exploded about 40% year-to-date and was worth $11,387 on Thursday. It is also the largest digital currency by market capitalization, at about $200 billion, according to data published by Statista.

"Just from what I know from all of the institutions, all of the people I speak to, there is an enormous wall of money coming into this," he told the host Daniela Cambone. "It's an enormous wall of money — just the pipes aren't there to allow people to do it yet, and that's coming. But it's on everybody's radar screen, and there's a lot of smart people working on it."

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Pal, the cofounder and CEO of Global Macro Investor, said the global economy was moving from the "hope phase" to the "insolvency phase" as investors realize that a recovery from the COVID-19 pandemic will take much longer than anticipated.

"The economy's not going to recover for a lot longer than we expect," he said. "There's no stimulus around, and we've got more problems to come in Europe, the US, and elsewhere. And businesses don't have enough cash flow. They're closing in droves. And that's what I called the insolvency phase."

He added that "the only answer is more from the central banks, so that's why I started to buy more and more bitcoin."

At one point Pal's portfolio was equally distributed among dollars, gold, equities, and bitcoin, Cambone said. But during the interview Pal said that the percentage of bitcoin he held was "probably above 50% now."

He acknowledged that such an allocation exposed him to a significant downside but said he accepted that, as "the upside's so much bigger."

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"My trading positions are relatively small, because I don't think there's as much opportunity as there is in bitcoin. So really, mainly, a bit of cash, some gold, and bitcoin," he said. "And I'm even toying with the idea of selling my gold to buy bitcoin, more bitcoin."

Tyler Winklevoss, the Gemini crypto exchange cofounder and CEO, has also said that bitcoin could also be propelled by the Federal Reserve's global quantitative-easing program.

"The Fed continues to set the stage for Bitcoin's next bull run," he said in a July 22 tweet.

Winklevoss added in August that the US dollar was no longer a "reliable store of value" and that there was no better time to buy bitcoin.