Global Macro Investor CEO Raoul Pal is of the opinion that the upcoming Coinbase IPO would soak about $60 billion and result in a short-term topping of cryptocurrency prices, as institutional investors look to make use of the listing of the digital currency exchange to shore up their cryptocurrency portfolio.
In a series of tweets on Friday, the investment strategist opined that since it is difficult to buy cryptocurrencies, fund managers would find it easier to have cryptocurrency exposure by rather buying shares of Coinbase.
Its just a thought but…
Let’s say there is a $100bn of institutional money ready to come into BTC in the next 6 months and $XX bn retail.
Crypto is impossible to buy for some and hard(ish) for others.
— Raoul Pal (@RaoulGMI) January 7, 2021
This according to Pal makes more sense, as institutional and retail investors would not have to ‘fear, uncertainty and doubt (FUD)’ about creating new cryptocurrency accounts, or of possible hacks.
Liquidity concerns
Pal thinks that such a move by institutional investors could absorb as much as $60 billion worth of future investments away from Bitcoin, thus slowing institutional buying and may cause cryptocurrency markets to correct.
While the exact valuation and date of the planned Coinbase listing is yet to be known, there are other concerns that may result in cryptocurrency prices to fall in the meantime, including reduction of the quantitative easing measures taken up by nations in light of the Covid-19 pandemic waning.
But according to Hashed CEO Kim Seo-joon, even if the U.S. Fed stalls quantitative easing, the price of bitcoin will likely rise, as the blockchain ecosystem on which the cryptocurrencies are based will grow day by day and widen.
