Macro guru Raoul Pal says retail investors have a chance to get ahead of venture capitalists and blue chip investors before 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 were never given the opportunity to own the infrastructure layer before the institutions. I always talk about this: we’re at the forefront of the institutions, and it’s not like it’s some mass illusion or delusion. I know because I talk to them all day, they all come, all the investors come and we get the privilege of owning this for the first time in our lives because everything else (VC) is venture capital.
The early stage is VC – to invest in VC you have to be an accredited investor, not only that but most VC funds won’t take you on until you have a certain amount of capital so it just pushes everyone out of the actual bulk of the economic high is made, and eventually something goes public and only a few of those companies make a lot of money, so we are disadvantaged as regular people.”
Pal then describes the risk curve associated with digital assets, saying that it is very similar to the risk curve of traditional assets in difficult market times. He also compares Ethereum (ETH) to the US economy – a growing ecosystem full of activity.
“Right now, as the economy slows down, the Fed starts to cut back, people will buy Treasuries and 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 they private credit – that is the risk curve.
It’s exactly the same in crypto – so [the] first part of the crypto spring people buy Bitcoin and then they get a little bit of confidence and all that [are] If they work, they move to Ethereum, and Ethereum starts to outperform Bitcoin…
Before you know it, you start moving down the risk curve – the good projects, Solana, or anything in between [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 largest of all the nation-states. The Bitcoin economy has more money, but basically it’s like Switzerland, just like old people store their money. Well, Ethereum, there’s a lot going on and so the Ethereum economy is behaving like the US economy.”
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