Macro guru Raoul Pal says that retail investors have a chance to get ahead of venture capitalists and blue-chip investors before the crypto markets skyrocket.
In a new interview on the Overpriced JPEGs podcast, the former Goldman Sachs executive says that for the first time, retail traders are scooping up crypto assets before institutional investors place their positions.
“We’ve never been given the opportunity to own the infrastructure layer, and own it before the institutions. I always talk about this – we’re front-running the institutions, and it’s not like it’s some mass illusion or delusion, I know it because I speak to them all day, they’re all coming, all the investors are coming and we get the privilege for the first time in our lives to own this because everything else is (VC) venture capital.
Early stage is VC – to invest in VC you need to be an accredited investor, not only that, but most VC funds won’t take you unless you’ve got a certain amount of capital, so it just knocks everybody out of the actual largest part of the economic high that gets made, and then eventually something goes public and only a few of those companies make a lot of money, so we’re disadvantaged as ordinary people.”
Pal goes on to describe the risk curve associated with digital assets, saying that it’s very much like the risk curve of traditional assets during tough market times. He also likens Ethereum (ETH) to the US economy – a growing ecosystem rife with activity.
“Right now, as the economy slows down, the Fed starts cutting, people will buy treasury bills, bonds, and then they’ll buy corporate bonds, then they’ll buy junk bonds, then they’ll buy emerging market junk bonds, and then they’ll buy private credit – that’s the risk curve.
It’s exactly the same in crypto – so [the] first part of crypto spring, people buy Bitcoin and then when they get a bit of confidence and things [are] working, they go down to Ethereum, and Ethereum starts outperforming Bitcoin…
Before you know it, you start going down the risk curve – the good projects, Solana, or whatever in the middle [like] Polygon and whatever [else] starts doing well, and then you go to Cowboy Land and you go to everything, so that’s the risk curve.
What’s really interesting is once you start to understand that crypto is an economy – it’s just a digital nation state and Ethereum is actually the larger of the nation states. The Bitcoin economy has more money but actually, it’s like Switzerland right, just like old people storing their money. Well, Ethereum there’s a lot of stuff going on and so the Ethereum economy acts like the US economy.”
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