Raoul Pal, the chief executive officer of Real Vision, has recently shared the reason for holding Ripple’s digital token XRP and his opinion on the risk/reward ratio of the digital currency.
In an interview with Thinking Crypto, the former Goldman Sachs executive revealed that he bought a position in XRP about a year ago. He then pointed out that the primary reason for making the purchase was the lawsuit filed against Ripple by the United States Securities and Exchange Commission (SEC).
Raoul Pal noted:
“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 [up] 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?”
In late December 2020, U.S. SEC filed a lawsuit alleging Ripple for the unauthorized sales of XRP deemed as an unregistered security. The case, which has lasted for about a year, is expected to extend into 2022 before it’s brought to conclusion.
According to Raoul Pal, the hope for his position in the digital token XRP rests entirely on the outcome of the legal tussle between Ripple, the San-Francisco based payment firm, and the SEC:
“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.”
Meanwhile, Ripple CEO Brad Garlinghouse had, in a November interview with CNBC, showcased his optimism of seeing the end of the lawsuit in the coming year.