Raoul Pal, co-founder of Real Vision, stated that Bitcoin (BTC) is a more effective long-term hedge against currency devaluation than gold. In an interview on the Wolf Financial show in September, he shared his understanding of how devaluation regularly undermines savings and wages. Pal noted that devaluation is a primary reason for rising asset prices over time, linking it to liquidity cycles controlled by central banks and governments. According to his estimates, this process leads to a depreciation of fiat currencies by about 8% per year, while wages typically align with economic growth, which is around 3%. This disparity explains why it becomes increasingly difficult to acquire housing and other actively scarce assets. Currently, the price of Bitcoin is around $75,900, having decreased by 2% over the day.
Pal compared gold to a base currency that cannot increase in value beyond what the economy already reflects. He argues that Bitcoin, being "digital gold," has the same scarcity but is at an earlier stage of adoption. Pal emphasizes that the only asset classes that consistently outperform the level of devaluation are cryptocurrencies and tech stocks, such as Nasdaq, which has an average annual return of about 19% over the past 15 years. Cryptocurrencies, according to his estimates, have grown by 45-110% per year.
Pal notes that gold, real estate, and other traditional assets tend to track the level of devaluation but do not exceed it. His comments align with broader views among macro investors, who increasingly link Bitcoin's price movements to gold as devaluation ceases to be just a theory and becomes a real threat.
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