Former Goldman Sachs Banker Identifies ‘Powerful’ Crypto Asset Sector That Investors Can’t Get Head Around

21.02.2023

190 1 minute read

Former Goldman Sachs executive Raoul Pal says one crypto asset sector is stumping market participants but has the potential to yield big gains in the future.

In a new video update, Pal tells his YouTube subscribers that he’s beginning to grasp the potential of non-fungible tokens (NFTs).

“NFTs are something that really have taken my attention in the last year as I’ve started to under understand the power of what they are and what they can do…

“With a blockchain, you can make it a one-of-one. It’s kind of like a limited edition print or a unique painting where you own it. Now yes, you can have the image of it. You can have the image of the Mona Lisa. You don’t own the Mona Lisa. In fact, the more people have the image of it, the more valuable the actual original is, which is something a lot of people don’t get their heads around.”

Pal says he has taken 10% of his Ethereum (ETH) holdings and placed them into some of the benchmark NFT projects. The Real Vision founder also notes that since NFTs are, for the most part, priced in ETH, they can behave as a secondary position in Ethereum.

“So I started allocating maybe 10% of my ETH or so into premium NFTs, some of those are community, some of those art projects, because I saw that stuff like punks when you look at the price of Crypto Punks and Bored Apes is they’ve remained incredibly stable in ETH terms. Yes, they had a blow-off top and they came back and they’ve traded about 65 ETH forever. And that’s interesting to me because they didn’t fall much further. They had a sharp spike in June in the big crypto collapse. But other than that, they’ve just rallied back and stayed at 65 ETH. So whatever ETH does, they’re just mirroring it.”

Pal predicts that in the future, NFTs may act like high-end property, outperforming Ethereum the same way pricey real estate outruns the economy in times of excess.

Okay, so I can take my ETH and put into a JPEG, an NFT. But why? Well, because much like high-end property, and think of a punk as a high-end property in London or New York or Hong Kong or wherever it is, when the economy starts booming and people have more money, they tend to buy expensive high-end property, and it tends to outperform the rest of the market. And I think the same thing will happen in ETH economy.

So as the ETH economy recovers, and it will do over time, and the ETH price goes up and economic activity and the Ethereum economy goes up, some of the excess returns… may get recycled into assets. And the ETH assets are things like Crypto Punks.”