Macro guru Raoul Pal picks ‘perfect setup’ for crypto markets, updates Ethereum, XRP and Solana Outlook
Real Vision CEO Raoul Pal believes investors should see crypto projects as digital nation-states rather than assets or technological advances.
The former Goldman Sachs boss says in a new blog post that cryptoecosystems are networks that produce internal and external value.
The Bitcoin (BTC) network, he claims, is based on the principle that BTC is an independent monetary system free from the corrupting influence of governments.
“It is fiercely protective of the integrity of the protocol (how society works) and as a result avoids innovation in the name of purity. Think of the Bitcoin economy as the Catholic Church in the Dark Ages or the gold bug society. There can only be one God or one asset. As far as the Bitcoin economy is concerned, the only asset that exists is Bitcoin. So if you want to allocate capital to this economy, your only choice is to HODL [hold on for dear life] Bitcoin.”
Pal says the Ethereum (ETH) network, on the other hand, shares several similarities with the complex US economy.
“In this system, you can start by buying ETH that has a deflationary supply, meaning that there will be less of it as time goes by. Because of this, its ‘central bank’ (the stake) follows responsible monetary policies designed to ensure that the value maintained and not degraded.”
Pal notes that staking ETH is like buying government bonds with the US government and decentralized finance (DeFi) is akin to the riskier banking sector. The Real Vision CEO predicts that the greater complexity of the Ethereum economy will make it bigger than the Bitcoin economy over time.
Pal also compares XRP and Ethereum competitor Solana (SOL) to their own respective national economies.
“For example, you can think of XRP as the United Kingdom: an old economy that, although important and well established, is not growing very quickly due to a lack of innovation.
Solana on the other hand could be South Korea just after the Asian crisis when the currency and stock market crashed. It was an unmatched opportunity that outperformed both the USD and the SPX for six years. However, it did not stand the test of time. It failed to continue its outperformance. Who knows how Solana will play out.”
He concludes by looking at the overall market cap of cryptoassets, which he says is currently flashing “a perfect setup” as it sits between two long-term support levels.
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