Macroeconomics guru and Real Vision co-founder Raoul Pal predicts that the entire cryptocurrency ecosystem will be worth hundreds of trillions of dollars as Bitcoin sucks liquidity from other asset classes.
“This space will not be a $1.7 trillion ecosystem as it is today but a multi-hundred trillion dollar ecosystem eventually. You can embrace change or fight it, but you owe it to yourself to understand it as the pace of innovation is going exponential too.”
The former Goldman Sachs manager adds that many of today’s analysts and investors are missing the big picture as they look at Bitcoin through a conventional lens.
“I’m finding it fascinating to see traditional finance and business people first trying to get their heads around BTC, then other crypto protocols, then Defi and now NFTs. At every single stage in the rapidly evolving ecosystem, they have used mean-reversionist thinking as opposed to exponential network effects analysis and therefore everything looks like a bubble or a misallocation of capital.”
Pal highlights that while not all crypto projects will survive, those that do will innovate and initiate the rapid growth of the industry.
“As thousands of projects, all pushing boundaries, go through the same survive-or-die and then network effects, the entire ecosystem rises… As the internet of value and trust accelerates, it is going to destroy more large old business models than maybe the internet itself. I know this sounds grandiose and hyperbolic, but the TAM (total addressable market) of the transfer, storage, accretion of value is the largest and most valuable on earth.”
“Remember the Bitcoin Super Massive Black Hole? The idea was that BTC would massively outperform all other assets, sucking in liquidity as it goes. Well, how is it doing this year?
+75% versus the S&P 500, +86.5% versus the NDX (Nasdaq-100), +101% versus gold, +75.5% versus Emerging Market equities, +33% versus oil, +55% versus Copper, +103% versus bonds, +55% versus the G4 Central Bank Balance Sheet.”
The Real Vision executive is also keeping a close watch on gold as he says the precious metal is trading at a critical level.
“Gold – At the last chance saloon? Gold is now ignoring the dollar, rates and any other correlation and just falls every day. It is approaching monumental support… Gold has a high chance of reversing around here… but if it doesn’t, we might see a full wash out of speculative positions.”
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