Macro guru and crypto veteran Raoul Pal is pulling back the curtain on how he believes Bitcoin (BTC) and Ethereum (ETH) will stack up against other asset classes this year.
In a new tweetstorm, the former Goldman Sachs executive reiterates his theory that Bitcoin is a “super massive black hole,” which posits that the crypto markets will continue to suck capital out of every other major asset.
Pal compares Bitcoin and Ethereum’s performance to all other major tradable assets since the beginning of 2021, noting a giant asymmetric advantage in favor of the two largest crypto assets by market cap.
“SPX [S&P 500] +11.5%
NDX [NASDAQ] +7.84%
EEM [iShares Emerging Markets] +4.71%
TLT [iShares 20-year treasury bond] -11.28%
DXY [Us dollar index] +1.46%
EU ETS [EU emissions trading system]. +49.27% (pretty good)
Lumber +130% (World class)
Fed B/S +6%
Even when accounting for the amount of risk one has to take to invest in crypto, Pal says the digital asset space still outshines everything else.
“Also on a vol adjust, risk-adjusted returns basis, crypto wins.
Like it or not, this is the single most superior trade of the last 12 months and one of the great trades ever.
BTC is up +1,386% from the low in March 2020
ETH is up +2,985% from the low in March 2020.
Pal believes that Bitcoin and Ethereum will continue to be the superior bets throughout the year.
“My theory is that no investment will beat crypto this year and it will suck in more and more capital.”
The Real Vision Group co-founder’s tweets are consistent with his previous statements asserting that the crypto markets are starting to make all other investments look like time wasters.
“The point being is that it is outperforming every asset class on Earth. It’s not because I love it because it’s new and shiny, it’s because it makes everything else look pointless. I simply don’t care about value vs. growth. ‘Oh look there’s a 10% return that could’ve been had I timed that right.’ I can buy and hold Bitcoin and make 100% and it’s barely the middle of March. This is what I’ve been trying to pound the table about. At this phase in the crypto cycle, nothing else matters.”