- 2 hours ago
Category
🎥
Short filmTranscript
00:00Why it ticked crypto is because the entire asset management world is underweight tech.
00:05And so they're chasing into year end and crypto being at the margin in liquidity gets whacked in the meantime.
00:14Everything Bitcoin and ETH, they've not gone to new highs this cycle yet.
00:19Feels like there's still a lot to go.
00:23All of the fast money guys, they will flip out for a 5% profit because it's like 60% return.
00:30They don't care.
00:31And then you've got to find all the buyers to actually replace it, the institutional capital, which we're just not seeing really yet, except in Bitcoin and ETH.
00:39The other feature that we've seen, and not surprisingly either because we see it every cycle, is OG selling.
00:45We've seen a bunch of people, 44 billion I think was the number I saw.
00:50You know, prices went up a lot, interest rates haven't come down much yet.
00:53And until the government reopens or the Fed get forced to, well, they're going to NQT, but then they need to increase their balance sheet and all of that.
01:00The dichotomy is they're not throwing money into crypto because they don't have any.
01:04Today we have Real Vision CEO Raoul Pal giving us his updated prediction for crypto, how the upcoming cycle will be different, and why the recent crash in crypto prices is a massive investment opportunity.
01:22With crypto and technology being the biggest investments this year, Raoul Pal says that he's remaining bullish on digital assets after significantly increasing his position size during the last bear market.
01:34The former Goldman Sachs executive gives a portfolio update on which crypto assets have the biggest upside in the coming months, and why this year, more than ever, we'll see massive capital pouring into the space.
01:46With major pension funds and institutional investors on board for the coming cycle, Raoul Pal predicts that crypto is on track to be a $10 trillion digital asset class.
01:55Paul says that this cycle will separate itself as devalued fiat currencies push more adoption into the crypto market and bring in more capital than we've ever seen before.
02:05Drop your comments down below and subscribe if you enjoy the content we do here.
02:09There's a bigger opportunity than people can see, because a lot of people have got their heads conflated with like it's the end of the cycle, it all failed, crypto is dead.
02:16And I'm like, no, I think the cycle has been extended for a bunch of reasons and liquidity is this reason.
02:21And once you see it through a liquidity lens, it completely explains what we've been talking about and then why there's all this discounted stuff.
02:28So therefore, once liquidity flows, you're going to see a re-rating of the space in a way that people don't even believe is possible again.
02:37And one of the things I've looked at is a lot of people complain that this year has not been like a, you know, the classical fourth year.
02:44Yeah.
02:44And we've seen it.
02:45We've had no alt season.
02:46And if you look back at stuff like everything ex-Bitcoin and ETH, they've not gone to new highs this cycle yet.
02:53It feels like there's still a lot to go.
02:55I did a lot of work on this and I found out that, you know, a lot of this four-year cycle is actually built on the debt cycle.
03:00And in 2021 and 22, when rates went to zero, they pushed out the maturity of debt by a year.
03:07So it's all to roll $10 trillion to roll this year in the next 12 months.
03:13So it feels like we had sort of an interim year.
03:16I still think we finish up strongly and I think it goes a lot longer than people expect.
03:21And the other issue is who the pipe holders are in the beginning.
03:26It's just jump trading and millennium and, you know, all of the fast money guys.
03:30And they will flip out for a 5% profit because on an annualized return, it's like 60% return.
03:37They don't care.
03:38And then you've got to find all the buyers to actually replace it, the institutional capital, which we're just not seeing really yet, except in Bitcoin and ETH.
03:46So, I mean, if you are one of these people who bought Bitcoin at $10, right, you're just like, well, I'll take some off at $100,000 because you're suddenly up $10 billion.
03:55It's like Novo did that unwind for Galaxy.
03:58That was $9 billion.
03:59It also, MicroStrategy also tells you the liquidity is because for a while he was able to just keep issuing stuff, issuing stuff.
04:07Now he can barely do anything.
04:09I just don't know how they've done it.
04:10But, you know, suddenly it's like la-la-land prices.
04:13I mean, who needs, they don't need Bitcoin to double again.
04:15If you're worth $10 billion, I mean, is the extra $10 billion if it doubles again worth your while?
04:21No.
04:22So they just kind of use maximum liquidity to just try and ease out.
04:25So the other feature of this market is, you alluded to earlier, we've had no real new liquidity in outside of the very top end.
04:32And that's a function of this has all been generally driven by retail.
04:37And retail in most places don't have any money because, you know, prices went up a lot.
04:43Interest rates haven't come down much yet.
04:45The economy still, the actual economy, look at the ISM survey, still below 50, so it's not even expanding.
04:50And then you're like, well, obviously, they're not throwing money into crypto because they don't have any.
04:55The other feature of the market that has been really interesting is stablecoins.
05:00Obviously, after the Genius Act, that's been good.
05:04The US has figured this out.
05:05I mean, like Scott Besson's gone, oh, this is how we dollarize the world.
05:09And we can fund like $3 trillion of short-term notes via stablecoins.
05:13But this is one of the foundational principles of crypto, and people forgot it for a while because the governments weren't involved and because big banks weren't involved.
05:23It's like, it doesn't really matter.
05:25And now suddenly it's like, oh, OK, maybe it does.
05:27It's difficult in hedge fund land right now because there's a lot of value and not enough momentum.
05:33And we've gone through a horrific year of chop so far, really.
05:37Yeah, Bitcoin's managed to eke its way higher.
05:40ETH had its rally from its lows, and it's now kind of in line with where it should be.
05:44But it's tough, right?
05:45Because unless you're a trader, you can't make money.
05:49You can't sit on anything because there's not a lot of liquidity, so the alts market bleeds, even if it's cheap.
05:55But it's super attractive, some of this stuff.
05:58Yeah, and it's not like we haven't been here before.
06:00It's just been a very frustrating market, and we probably end up finishing much higher into year-end.
06:07And you've waited all year, and all the returns come in two months.
06:09I mean, we're kind of used to this kind of ridiculousness of this market.
06:12So it's kind of we had this in like 2018, 2019 before.
06:16And why it's hit crypto is because the entire asset management world is underweight tech.
06:21And so they're chasing into year-end because I think it was, I saw the stat yesterday, 80% of all funds have underperformed the market this year.
06:29So they're all chasing that, and crypto being at the margin in liquidity gets whacked in the meantime.
06:35In the end, the network is a utility.
06:39Although, because of token economics, you capture some of that.
06:41So, yes, I mean, the network value still goes up because you're building on a network and you create Metcalfe's lower value.
06:47But the applications layer is the thing that drives it.
06:49It feels that stablecoins is going to bring the new people on for DeFi in a scale that we're not really prepared for.
06:58Because, you know, if you have a stablecoin app that works really well, that can be built on like a network,
07:05and it can go to the end user in Thailand, and you build borrowing and lending on it.
07:11Okay, we're now bringing net new people, doing net new things on chain.
07:15And it's not us lot shuffling money around to try something out and make a few bucks, right?
07:20Raoul says it's the fastest pace of adoption of any investable asset in all of human history.
07:26By the end of 2025, there will be 1.1 billion active crypto wallets.
07:30The pace of growth is hard to comprehend, and it will be the fastest accumulation of wealth we have ever seen.
07:37This is the conclusion of a career's worth of research.
07:40And every single chart and piece of research leads to the same conclusion.
07:43Liquidity drives everything, and crypto will be the best performing asset of them all.
07:49Raoul has been stressing to investors for months that all the factors are beginning to align right now,
07:54a period characterized by parabolic moves upwards in crypto prices.
07:58The other thing that's interesting to me was the Circle IPO, right?
08:02Traded at a massive premium to revenues.
08:05And I've seen this before.
08:08It's either like a full-on retail frenzy speculation, which it wasn't,
08:13or the price is telling you something that is not priced off discounted cash flows,
08:18that they're pricing on Metcalfe's Law, that it's a network.
08:21And then you saw the announcement, I think it's called ARK, that they did.
08:25It's like this huge labyrinth of people involved, and they're like, there you go.
08:29They're actually building a money network from scratch with, you know, instant velocity.
08:35And the market is going to price this very valuably.
08:38There's also directly investable.
08:39So AI is growing faster.
08:41What can you do?
08:42You buy NVIDIA.
08:43I mean, if not, it's part of Google's balance sheet and part of Microsoft and part of Meta.
08:49You can't get pure exposure very easily.
08:51And what about the private stablecoins that have been launched?
08:55That was like, really, are we doing this all over again?
08:57This is like the 2017 thing where we're going to have these private networks.
09:01But that seems to what's happening.
09:02They're building their own Layer 1s, not even Layer 2s.
09:05The other one that's been a really interesting rise is prediction markets.
09:09And it just shows you how you can abstract away options, because a lot of these are option markets.
09:16You know, you can bet on where Bitcoin's going to be at the end of the year.
09:18Like, will Bitcoin break 150,000 by the end of the year?
09:21It's like a 13% chance, which is low.
09:23But that abstracts away an option down to the probabilities and make it ultra easy for people to point, click, shoot, done.
09:30No onboarding with Robinhood and Coinbase or the interactive brokers.
09:35There's none of it in seconds.
09:37I'm fixated on as well is asset management.
09:40We can see the Apollos and Blackstowns and everybody.
09:42They want to tokenize their funds to try and sell them to investors, which these are illiquid assets with tokens.
09:51Retail don't want that rate of return.
09:54But what I see on the other side is the rise of these vaults where you can create baskets.
09:59You can do stuff instantaneously.
10:00And it becomes a much more efficient for individuals to create asset management firms.
10:06You know, think of how difficult it is to start a hedge fund, right?
10:08The amount of paperwork and cost to do it, when basically you can do it on chain four, zero cost in seconds.
10:14And people haven't.
10:16That's just early, but it's coming.
10:17Yeah, I mean, we've seen this bizarre reversal where crypto is kind of, you know, broadly seen as the kind of hype sector, right?
10:23Whereas I'd argue it's the reality sector now in terms of profitability and growth.
10:28And we've probably seen the reverse of what's kind of historically been the case of kind of overhyped, underdelivered.
10:33We were actually seeing most things that, you know, have built utility over the last five years, overdelivering and getting not rewarded at all.
10:40I think the cycle's, you know, a difficult one to sort of get your head around because the construct of the market's changed so much, right?
10:46So to me, a cycle is more robust if it's the same group of people trading the same kind of assets over the same kind of timeframes.
10:56But the makeup of ownership of crypto has dramatically changed over, you know, even the last two years, right?
11:02We've seen the influx or the liquidity sink of all the Bitcoin and Ethereum, and now Solana's starting to go into ETFs.
11:11So I think we have seen a transition of ownership of people that will look at the market in a different way.
11:16So personally, I would expect the cycle to break down and lose, I guess, what we've seen traditionally,
11:23where you've had a pretty similar group of people trading pretty similar assets with a pretty similar mindset.
11:29Market's probably telling us a different story, though.
11:31So, you know, whether we're right or wrong, let's see in six months.
11:35What I'd say is very undervalued, triple-digit tech growth space that's about to get regulatory clarity
11:41and all the sort of nice things that traditional money would like to see.
11:46But the flows have been terrible, right?
11:48You basically have had great flows at the top end of the town, Bitcoin into a lesser extent Ethereum,
11:53and it's kind of been a wasteland outside of that.
11:56Markets are pretty good at sniffing out kind of opportunities and marrying that up with liquidity.
12:00So I wasn't super surprised that the DATs sort of came along and married up what you could argue would be excess liquidity
12:06in pretty expensive equity markets with a dearth of liquidity in crypto markets.
12:13And we saw that sort of initial surge come around.
12:16I think there was always going to be some indigestion come out of that.
12:20And, you know, equity markets are good at finding opportunities.
12:22And when they find them, they're extremely good at pressing the advantage and pumping as much liquidity into them as quickly as they can.
12:28And, you know, DATs are a good example of that.
12:31I think as we look forward, where do we see the DAT market?
12:33We don't think it makes a bunch of sense to have 50 DATs owning the same asset.
12:37So we think there's going to be clear winners.
12:39And if you look at the Ethereum sort of stable of DATs, you can see BitMine is just pulling away from the rest now, right?
12:45With huge growth while the others kind of stagnate.
12:48Powell stresses this pattern is normal and necessary to flush out weak hands and reset leverage.
13:01He highlights Bitcoin's high correlation to global liquidity, which remains supportive, even during temporary liquidity air pockets.
13:07He believes the market is setting up for another strong leg higher.
13:12Similarly, Bitwise CIO Matt Haugen supports this view, pointing to a dip then rip pattern, where sharp pullbacks are typically followed by massive rallies, up to 190% gains historically.
13:25Both argue that patience, not panic, is key.
13:28The banana zone is alive, just misunderstood.
13:31As the momentum in the crypto market is building and institutions are positioning themselves, Raoul Powell says everything is about to change.
13:40He says the next phase of the crypto cycle is critical and he's stacking big bets in his portfolio right now.
13:47With the next bull market and with crypto and technology being the biggest investments this year, Raoul Powell says that he's remaining bullish on digital assets after significantly increasing his position size during the last bear market.
13:59The former Goldman Sachs executive gives a portfolio update on which crypto assets have the biggest upside in the coming months.
14:06He says we're about to see massive capital pouring into the crypto space.
14:10With major pension funds and institutional investors on board for the coming cycle, Raoul Powell predicts that crypto is on track to be a $10 trillion digital asset class.
14:19Powell says that this cycle will separate itself from its predecessors,
14:22Bitcoin is one that is headed for an unprecedented price milestone and Raoul foresees a financial tidal wave that will catapult cryptocurrency to new highs.
14:38Raoul Powell says the crypto world is on the brink of something massive, a seismic shift for Bitcoin and crypto in what he calls the banana zone.
14:46As the momentum is building and the institutions are quietly positioning themselves, Raoul says everything is about to change.
14:54He recently shared his take on the current economic uncertainty with tariffs and recession fears creating market volatility that a major market rally is on the horizon.
15:03And that's where Bitcoin comes in.
15:05Bitcoin has been trading more like a risk asset lately, meaning if the market recovers, Bitcoin is expected to surge alongside it.
15:11But the uncertainty is key here.
15:14If the market remains stuck in limbo, Bitcoin could face short-term pressure.
15:19So we could see a sharp recovery in the next week.
15:22The bottom line, Bitcoin's next big move depends on how this plays out.
Recommended
0:52
|
Up next
0:28
0:55
3:24
5:34
1:10
12:11
1:59:04
1:57:34
Be the first to comment