Real Vision CEO Raoul Pal has offered a new framework for understanding the crypto ecosystem, viewing it as a series of networks that produce intrinsic and extrinsic value.
Before founding the macroeconomic and investment strategy research service Global Macro Investor (GMI) in 2005, Pal co-managed the GLG Global Macro Fund in London for global asset management firm GLG Partners (which is now called “Man GLG”). Before that, Pal worked at Goldman Sachs, where he co-managed the European hedge fund sales business in Equities and Equity Derivatives. Currently, he is the CEO of the finance and business video channel Real Vision, which he co-founded in 2014.
According to Pal’s blog post, Bitcoin and Ethereum should be viewed as economies rather than just assets, each with its unique characteristics.
Pal compares the Bitcoin economy to the Catholic church or the gold bug community, fiercely protective of the integrity of its protocol and resistant to innovation.
On the other hand, the Ethereum economy is viewed as more similar to the US economy, with a central bank that adheres to a responsible monetary policy designed to ensure value is upheld. Pal also notes that ETH has a deflationary supply, making it an attractive option for investors seeking yield.
Beyond that, he argues that the Ethereum economy offers opportunities for capital gains through private sector lending, NFTs, and the emerging pseudo-equity layer of dApps, DAOs, social tokens, and Layer 2s.
While other protocols can be compared to emerging markets or smaller economy markets, Pal sees the Ethereum economy as the fastest-growing economy on earth, offering many amazing opportunities:
“It’s still early for the ETH economy, and that is why it offers so many amazing opportunities. This is the fastest growing economy on earth, and it comes with a sound central bank in a completely free market where capital is allocated and utilised rapidly (and destroyed rapidly too!). Unlike the Bitcoin economy, the Ethereum economy is broad and deep and is practically a mirror of traditional economies. With the added bonus that it’s been reinvented for the future.“
As for other major crypto projects, he said the following about XRP and Solana:
“For example, you could think of XRP as the UK: an old economy that, while important and well established, does not grow very fast because of a lack of innovation. Solana on the other hand might be South Korea just after the Asian crisis when its currency and equity market came crashing down. It was an unmatched opportunity that outperformed both the USD and SPX for six years. However, it did not stand the test of time. It failed to continue the outperformance. Who knows how Solana will play out.“
However, he emphasizes the importance of investing the necessary time to find the best opportunities and diversifying to avoid potential losses. Pal concludes that the crypto ecosystem presents a once-in-a-lifetime opportunity for those willing to put in the work to navigate and understand it.
According to a report by The Daily Hodl, last month, during an interview with Altcoin Daily, this is what Pal had to say about Ethereum:
“ETH is the money of the internet. And I don’t think it’s going to lose that. But, that doesn’t mean it’s the best performer. Because we’re going to push use cases elsewhere for innovation...
“We’ve got things like Sui coming. Aptos hasn’t been fully utilized yet. We need to see the network effects. Solana, I think they’re aiming for the broadest adoption by making it a consumer-friendly place, to onboard normies. That’s very powerful. If they get that right… and their work with people like Meta and stuff like that – Instagram – is very interesting. That’s super amazing... Polygon, amazing group, what are they doing? They’re onboarding a lot of people. They’ve got a lot of throughput, super interesting. .. Sui hasn’t even come on to the market yet, and that is faster, incredible team, stuff like that, so there’s a lot going on here. But ETH is the easiest way because it’s probably got the least risk.“
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