Raoul Pal, former Goldman Sachs (NYSE:GS) executive, who first got into Bitcoin (CRYPTO: BTC) in 2013, on Wednesday shared his thoughts on why cryptocurrencies have become a vital part of the financial system.
What Happened: Pal’s journey into the world of Bitcoin began during the European Union banks and sovereign crisis, which showed him the limitations of traditional fiat money as a bearer asset.
This realization led him to believe that a new financial system was needed to fix the broken one that was "over-saturated with debt," and that’s where cryptocurrencies came in.
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Why It Matters: Now he thinks the U.S. may be on the precipice of a similar reckoning, with depositors being protected through mutualization of losses via debasement of the currency. "Bitcoin literally fixes this," he tweeted.
Although Pal admits to owning more Ethereum (CRYPTO: ETH) than Bitcoin, his comments apply to both. In his opinion, both cryptocurrencies are valuable in terms of "network effects" and "yield."
Price Action: At the time of writing, BTC was trading at $29,075 up 1.45% in the last 24 hours, according to Benzinga Pro.
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