Raoul Pal, a former head of equities and equities derivatives at Goldman Sachs UK office and the founder of Global Macro Investors and Real Vision Group, believes that Bitcoin (BTC) is worth betting on in the long term — even if it’s just a 1% chance. This and other insights Pal shared while speaking on the Stephen Livera podcast this week. Pal said:

“I know all these macro guys, they’re all in it. They get it. They get the optionality. They may be complete believers, part believers, partial believers. But even then, if it’s a 1% chance of being right and the upside is 100x from here, you’d do this all day.”

Potential rewards outweigh the risks

According to Pal, the potential reward of buying Bitcoin far outweighs all the accompanying risks. In his abstract approximation, $8 trillion is a possible figure the BTC market cap could hit in the future. He explained:

“So if it’s worth 80 trillion dollars, let’s say you have a 10% probability, that’s 8 trillion dollars. It’s currently worth 200 billion dollars. So even if there’s a 1% chance of it working […] what it’s telling you is that it’s ludicrously underpriced if any of these probabilities play out.”

He adds that these numbers are “crazy attractive” and “that’s why it’s sucking in so many of these macro guys, because they’re like, ‘Damn, nothing else has this payoff.’”

He also referenced crypto analyst PlanB’s tweets containing a couple of different stock to flow models based around the tapering off in supply due to scheduled halvings of BTC block reward.

Bitcoin is predicted to increase to $1 million in coming years

Notably, PlanB’s most recent chart suggests the Bitcoin price will increase to $100,000 after next year’s halving, and to an astonishing $1 million after 2024, which Pal says is not impossible.

“Yeah, it’s an option,” says Pal. “And, okay, it’s less of an option than it was when it was much cheaper, but if you look at PlanB’s stock flow model, stuff like that, you can see the comparative upside. And if you try and get your head around the digitization of everything, if you try and get your head around an alternative financial system, even if it has a low probability, right?”

Early $200 bet on Bitcoin turned out to be prophetic

The ex-Goldman Sachs exec also mentioned that he has a long history with Bitcoin and was “probably the first person to put together a valuation using the above-ground supply and below-ground supply of gold, and imputing that into Bitcoin, which was basically the Stock-Flow model at a very simplistic level.”

Pal says that he first found out about BTC when it was still at 17 cents. He said:

“I first discovered Bitcoin […] because some of my clients had begun to mine it when it was at 17 cents. They were running a hedge fund, and they happened to have electricity included in their office space, and somebody talked to them. They were very, very early adopters […] So, I wrote an article. I got long, around $200.”

On July 30, former Bitcoin bear Joe Kernen also predicted that BTC could hit $55,000 by May 2020, the date of next halving.

At press time, Bitcoin is trading at around $10,000 — up 2.12% on the day, according to Cointelegraph’s Bitcoin Price Index.