CEO of Real Vision, Raoul Pal, believes that, like hedge funds in the past, cryptocurrency will bounce back from its notable failures.
The former Goldman Sachs executive believes institutions would invest in cryptocurrencies once digital assets are regulated, according to a recent interview with crypto analyst Scott Melker.
“We’re at the blow-up phase – the FTX scandal. Now, I’ve seen this – I’ve seen it with Mt. Gox, I’ve seen it with Bitfinex, I’ve seen it every single bloody cycle, and this time around it was like, ‘Oh my God, it’s the end of the world.’ Yeah, it’s every time the end of the world, and guess what? It’s not.
It’s never the end of the world. People say, ‘Well nobody’s ever going to come back into this market.’ Well, I’ve been around. I’ve been around the block a long time.
I’ve been 30 odd years in financial markets, and I’ve seen this with hedge funds. Long-Term Capital Management – the biggest blow-up of a hedge fund in history and the Fed had to bail out the whole system. What everybody shouted then – ‘They’re a Ponzi, they’re a scam, they’re overleveraged, hedge funds are un-investable.’ Net outcome? The net assets of hedge funds went up 5x over the next seven years. Why? Regulation.”
For both institutional and ordinary investors, crypto laws will provide a safer atmosphere, and this might lead to a capital infusion back into the markets, claims Pal.
“Regulation equals safety, equals green light, equals go. If that coincides with global liquidity, it creates fireworks.”
