Raoul Pal Invested In XRP As The SEC Lawsuit Creates A Huge Risk/Reward
Raoul Pal, the CEO of Real Vision and ex-Goldman Sachs exec explains why he is holding XRP, and how he views the risk/reward ratio for the digital asset.
In a recent interview with Thinking Crypto, Pal said that he took a position in XRP about a year ago, and says that one of the key drivers was the U.S. Securities and Exchange Commission’s (SEC) lawsuit against the payments company, as it makes the risk/reward ratio very lucrative.
“I bought it for the reason that A) It does have use cases and it is being used, and B) The court case is a phenomenal risk/reward.
It got heavily discounted in the price, and then I looked at it and thought, ‘Well, what’s it going to do? Fall 100% from here to zero? But if it gets solved, it’s 10x.’ And I’m like, ‘Well that’s a no-brainer.’ Why would you not take a 10-1 risk/reward that has a catalyst around it?”
Pal says his XRP bet hinges entirely on the court case:
“It’s all about this court case, right?
Because the price can’t go anywhere – it got delisted from everywhere. It can’t go anywhere until it’s resolved, because the richest, most powerful country on Earth is not allowed easily to invest in it.”
Brad Garlinghouse, the CEO of Ripple, is hopeful that the legal battle would be resolved next year, but as of now, it seems to carry on.
At the time of writing, XRP is trading at $0.85 with 5% upside on the daily chart.
SEC vs. Ripple
The SEC vs. Ripple lawsuit kicked off last December. SEC accuses Ripple for selling XRP as an unregistered security during its launch. The regulator alleges that XRP remains a security to this day, to which Ripple asked the SEC clarification that if XRP is a security, wouldn’t ETH (and many others by the same classification) also be one. SEC has not provided further clarity on the matter.
